NY- Neutral- Following yesterdays market holiday, NY finds itself firmly in the middle of what looks to be sideways consolidation. For now, the upper boundary appears at 135, while the support lies at 128.50. With the market almost completely driven by the USD at present, we choose to remain neutral pending tomorrow evenings FOMC meeting minutes. This should provide us with some sort of dollar direction as market participants get to grips with the future Fed rate outlook. Were the consolidation zone to be breached to the upside, 137 is your next supply point. To the downside, below 128.5, 123 is the next important support level.
Liffe- Sell (2)- LDN suffered a further slide yesterday on light volume amid the US holiday. The switch provided the main turnover as players continue rolling into May as first notice day in March approaches. Tet in Vietnam is now in full swing, and despite the US back to business, volumes should remain light. Although it is unwise to draw conclusions on days such as yesterday, the downside pace is certainly accelerating, and a close in March below 1280 should increase the pace as such; 1250 then becomes the next target. To the upside, March would need a clear break of 1350 to turn the current direction on its head, but in the current climate, this looks unlikely.
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