EUR/USD, Copper and CAC 40 Face Key Tests Ahead of CPI

2 Year Yield Technical Analysis

The first chart is the 2-year yield. This has been screaming higher over the last week or so, and that is starting to make headlines around the world, with it being basically out of control.

The 10-year is at 4.95, essentially, and right now we have the question of whether or not the Federal Reserve will have to hike rates next week. We have the CPI numbers coming out in a little over an hour, and that could be highly influential as well. Higher rates could mean a higher dollar or could mean chaos in the stock market.

EUR/USD Technical Analysis

I’m watching this 200-day EMA. Do we get a bounce from there, or do we break down below it? It is currently at 1.1570. Below there, I’m short the euro. If we bounce from there, I might take a quick bounce trade, but that would be about it.

I’m not overly convinced on the euro. I think longer term, we’re going to see some problems in the European Union, mostly around energy.

Copper Technical Analysis

Copper is what I’m very interested in. $6.50 has been very important. We’re right there, so I would love to buy some type of bounce here and go long yet again right at this very familiar area. It was a pretty big volume spike yesterday, so we’ll see.

But if we can get a little bit of upward momentum, what I like about this is that there’s an obvious level to play the copper market off of.

CAC 40 Technical Analysis

And finally, in Paris, the CAC 40: if we can break yesterday’s high, I probably will be long at that point. This is a market that I think is due for a bounce. I don’t know that it’s a trend change, but we would need some type of relief in rates.

This is very luxury-sensitive, with things like LVMH and Hermès. There are some other ones obviously out there that move this index as well that are luxury-related, but luxury is a huge part of the CAC 40.

With this, I like the idea of buying a breakout of yesterday’s candlestick. It gives us a nice setup.