Today’s Trading Is All About Blinking First
By Tyler Durden
By Richard Brewslow, fmr FX trader and fund manager who writes for Bloomberg
Today’s Trading Is All About Blinking First
The voting has begun to decide Britain’s EU referendum. It’s raining hard and it’s hot, which makes it fortunate that the British are a hardy lot. They’ve had to be to endure a campaign where the hyperbole has been worthy of a U.S. election.
Banks left and right are warning their clients in advance that they may not have the liquidity or risk appetite to execute trades on their behalf tomorrow. I’m not sure why they’re also advising what trades to do on the outcome.
The only financial institutions who have declared themselves poised to get involved with both hands are central banks. They have their puts ready to go and are revving their transmission mechanisms. Once you get the trading bug, it’s hard to shake.
Yet for all the ambiguity, assets are going into today flying. Nothing can go wrong.
The U.K. hanging by a thread? Versus the dollar, the pound is above all its moving averages, making a new year-to-date high today. Looks awfully good against the euro, too. FTSE 100 has flown back above its moving averages and threatens a technical break-out less than one percent away.
Germany’s DAX index, for which so many obituaries were written, looks like its upward momentum is now solid and has strong technical support to lean on. I’m not sure why it wants to, but the euro is trying to ram its head once again against 1.1450 resistance to the dollar.
Not wanting to be left out, S&P 500 futures have been trading with a strong bid all day.
Price action today means nothing for where it will all be tomorrow, but it does show which side fears it holds the weaker hand. And the trades required to get square. Poker is a fascinating game.
Source: Today’s Trading Is All About Blinking First
