Online Forex Trading|Currency Trading

EUR/CHF comment

admin — Mon, 23 Jun 2008 10:22:52 +0000

The unit did a very good job in holding the bullish MA’s cross overnight (it looked like a new false cross would take place after Friday’s sell-off), and this might push the unit towards its extreme OB level 1.6220 and close to key dynamic resistance level 1.6230-40.

Retailers mixed, paring GBP and EUR shorts

admin — Mon, 23 Jun 2008 10:22:35 +0000

Retailers are still inclined for more USD gains as ratios show more USD longs than shorts. However, those ratios have changed quite considerably over the last 24hrs after the intense USD rally of this morning. I believe we’ll see another flip in market sentiment if USD progresses further, with some serious stops being targeted afterwards.

No rate hikes in prospect for the UK - Sunday Times

admin — Mon, 23 Jun 2008 10:22:19 +0000

According to the Sunday Times article: “The BoE’s message on interest rates in recent days was intended to be neutral, sources say, and not a signal that the MPC is contemplating early rate rises”. Sentance says: “Businesses and consumers are feeling the squeeze from higher fuel and food prices, while the difficulties in the banking system and a weakening housing market are adding to economic uncertainties. These factors should lead to much slower economic growth and a weaker labor market over the next year or so–helping to offset the upward pressure we are seeing on inflation from rising energy and food prices”.

Sentance and Tim Besley are viewed as the most hawkish members of the MPC, having voted against April’s 25bp base rate cut to 5.0%.

Backfiring continues

admin — Mon, 23 Jun 2008 10:22:02 +0000

EUR/USD is testing 200SMA 30m chart @ 1.5535, and a break should see a test of the broken trendline @ 1.5560-65. USD/CHF so far is holding above the broken downtrend line @ 1.0420, a break lower should see 1.0370-75 coming into play. GBP/USD is the lagger of this move, as the unit is STILL trading in/around extreme OS condition, thus not being the best vehicle to think of long USD positions; on the contrary, the unit has more room for backfiring than the other 2 Europeans if it is to do so in the end.

The IFO ‘think tank’ does not support an ECB rate hike - Bloomberg

admin — Mon, 23 Jun 2008 10:21:47 +0000

A possible interest rate hike by the European Central Bank “doesn’t make much sense,” as high energy and food prices are unlikely to trigger broad-based inflation amid a cooling economy, Ifo think-tank economist Gernot Nerb told Bloomberg TV Monday.
Nerb said the ECB isn’t capable of controlling the volatile pricing of food and energy products and shouldn’t increase its interest rate, because an already cooling economy will also ease price pressures.
ECB President Jean-Claude Trichet recently signaled that the rate-setting governing council could raise interest rates to 4.25% from 4% at its July 3 meeting, to combat high inflation.
German business confidence sharply deteriorated in June in the wake of record-high oil prices and a weaker export outlook, a survey from the German Ifo Institute showed earlier Monday.
The Ifo business climate index fell to 101.3 from 103.5 in May, well below economists’ forecasts of 102.3.
Nerb said high energy prices are responsible for weakening business expectations, while the strong euro isn’t as much of a problem.

Final tech comments

admin — Fri, 20 Jun 2008 22:29:55 +0000

Technically speaking, USD/CHF is looking good for a recovery (good pattern), and Cable is definitely paying off the bearish MACD divergence in the 30m chart from 1.9755. Again, these 2 pairs, despite the overall craziness, are responding pretty well to techs.

* There are some indicators that I look at (not for direct trading, but that I always keep in watch) that are telling me that something is wrong in EUR/USD from 1.5480 and in Cable from 1.9580. If we see these levels printing (and lower) next week, you got the call here first, keep those levels in mind, I do also feel a turnaround is coming soon.

At the Close. Traders challenging CBs… really?

admin — Fri, 20 Jun 2008 22:29:29 +0000

The week comes to an end with a serious liquidation of USD positions, who has seen big losses vs EUR, CHF and somewhat important vs GBP as well, while it has remained less heavily sold vs JPY.

If you would’ve asked me what I thought the closing price for the EUR/USD would be on Sunday, I would’ve definitely told you ’somewhere near the uptrend line @ 1.5275 or even below it”. The G8 meeting, claiming for a higher USD, and the ‘no’ vote of Ireland to the Lisbon treaty were two big weights that the EUR looked not able to deal with. However, to lots of us surprise (and stops, too), big specs once more challenged the CBs in their usual way, ie, doing exactly the opposite as the G8 would like, asking them to show their money o0r shut up.

But perhaps not everyone in that G8 meeting is upset with this week’s price action. The fact that both US and Japan Treasury Secretaries ‘exchanged’ some words on the Forex separately from the rest, starts to look like a new ‘conspiracy theory’, where the two countries will probably push the EUR higher, adding a bit more pressure to an economy already in struggle. If the paranoiacs @ the ECB don’t want to see this, it’s their problem. Blame on them. But we should not rule out further spikes and a new wave of market disorder that will lead to frenzy activity in both sides. June, perhaps one of the worst months to trade, is indeed being a very tricky and volatile month. And it’s not over yet…

Calling it a week here, I hope you enjoyed this week’s shows. Look forward to meeting you all again on Monday. Have a nice weekend.

And here goes the backfiring…

admin — Fri, 20 Jun 2008 22:28:49 +0000

USD/CHF is up nicely from 1.0310, and both Cable and Euro are easing off the price liquidation seen earlier on. Best performer, and the one I’d choose to go for contras now is the Swissy, but take a look at Cable’s 30m confirmed MACD divergence, that may give some extra pips as well. 1.9730 break leads the way for 1.9700 again.

USD liquidated vs old Europeans

admin — Fri, 20 Jun 2008 22:28:25 +0000

What a rush in EUR/USD and USD/CHF… the 2 units are trading way out of bounds with the USD way oversold at the moment against the 2, and with Cable so far not following the move (bearish divergence still possible there…). Very much the opposite as seen yesterday, and certainly too much too fast for today. We should definitely see some correction here, although today being Friday, this could be delayed until Monday.

However, technically speaking this has put EUR/CHF back to where it belongs, ie, back to normal from extremely aberration yesterday.

Markets at this hour

admin — Fri, 20 Jun 2008 12:46:23 +0000

The USD continues under severe pressure vs the Europeans, in a rather one-sided, sometimes very liquidative market. The USD should correct its extreme OS condition vs the CHF, but again, today is Friday and nothing is guaranteed, but definitely going short the USD is rather risky at current levels.

The Euro is easing a bit at the moment after having spent the last 5 candles OUT OF BOUNDS. Current extreme Ob level is 1.5610, and so prices are back inside the range, and I definitely expect a better correction from here.

Trade Idea: USD/JPY

admin — Fri, 20 Jun 2008 12:46:06 +0000

As it seems the market still holds up above 107.40, am trying half long @ 107.44, stop 106.94, target 108.04.

USD/CHF comment

admin — Fri, 20 Jun 2008 12:45:50 +0000

The unit is triggering a bearish MA’s cross in the 30m chart, but again, same as I said yesterday with the bullish cross (i.e., that I did not like it due to the extreme liquidation seen earlier on), I don’t trust it much, although the unit might have some room to the downside. Shorts shouldn’t be lower than 1.0380, allowing the market to correct the current aberration. At the moment, shorts are definitely not suggested for being very risky.

GBP/USD comment

admin — Fri, 20 Jun 2008 12:45:35 +0000

The unit is testing (4th time) the projected line of the current intraday uptrend channel @ 1.9770, just above the uptrend line off 1.9490 (steep), that was broken yesterday and so far had been acting as dynamic resistance. Further, there is an important m/t line coming in @ 1.9785, with stops reported above, so a bit of extra of stop-hunting could be seen there. However, the extreme OB level 1.9800 should cap any upside test for now.

CHF gains back

admin — Fri, 20 Jun 2008 12:45:08 +0000

The Europeans (EUR, CHF) are the clear winners this morning and they are putting some real pressure on to the USD. USD/CHF is now trading @ extreme OS level 1.0365, having corrected (by far) the price aberration of yesterday. Cable remains the ‘lagger’ on this move, but it is doing well as well. However, the unit is now facing dynamic resistance @ 1.9765 and could fall from there.

Posted by Tony Juste on Friday, June 20, 2008 at 12:06 in Market | Permalink | Comments (0) | TrackBack (0)

Trade Idea: EUR/USD (close-stop)

admin — Fri, 20 Jun 2008 12:44:52 +0000

This new wave of stop-hunting and fast rally in EUR/USD has triggered the stop-loss for our open trade, resulting in net -30 pips for a full position.

EUR/JPY comment

admin — Fri, 20 Jun 2008 12:44:36 +0000

The unit is spiking up fast at the moment, with both the extreme OB level and a dynamic resistance line coming in @ 168.20 are eyed. Selling in front of that level should be a reasonable strategy for today.

BNP Paribas on USD Index

admin — Fri, 20 Jun 2008 12:44:20 +0000

“The USD index retains a sideways bias, says BNP Paribas, although whilst holding above its 50% retracement target of 73.20, it has upside potential, says BNPP. Now at 73.30, the bank expects to see a rebound toward 73.70 ahead of 74.30.” - Dow Jones

Reversing roles

admin — Fri, 20 Jun 2008 12:43:45 +0000

Today it is time for the EUR to gain (and somewhat liquidate) across the board (the unit is now @ extreme OB levels 1.5570), particularly vs GBP and USD. Technically speaking, the dynamic resistance line around 1.5555-60 is still holding, but we need to see a break below 1.5550 to have the confirmation of a new failed test.

The CHF aberration eases off

admin — Fri, 20 Jun 2008 12:43:25 +0000

It is nice to see the CHF coming back after yesterday’s extreme liquidation with some real gains in the crosses. As said, EUR/CHF longs on a bullish MA’s cross looked risky (and so did USD/CHF’s) as the unit still needed correction. Now we have it, but technically it is difficult to see it the unit giving away today’s gains at the moment.

Citi’s CFO: More ’substantial’ write-downs in 2Q - CNN Money

admin — Thu, 19 Jun 2008 21:59:39 +0000

Citigroup Inc.’s chief financial officer on Thursday warned that the nation’s largest bank by assets would suffer more “substantial” write-downs on debt investments in the second quarter.

CFO Gary Crittenden also said that there will likely be more write-downs related to leveraged loans and bond insurers.

Citigroup shares fell 77 cents, or 3.8 percent, to $19.64 by early afternoon trading.

Link to news

Mizuho Corporate Bank (London) techs

admin — Thu, 19 Jun 2008 08:12:19 +0000

EUR/USD
Comment: Pushing cautiously higher through a thin Ichimoku ‘cloud’. This should continue today and tomorrow, the short term target 1.5650, maybe 1.5800.
Strategy: Attempt longs at 1.5575/1.5550; stop below 1.5440. Short term target 1.5650, maybe 1.5785.

USD/JPY
Comment: Sort of keeling over but ranges are so tiny that it may be better not to make too much of it all. We continue to watch for topping activity.
Strategy: Sell at 107.60, adding to 108.05 ; stop above 108.70. Short term target 107.00, then 106.50.

EUR/JPY
Comment: Same as yesterday: tiny ranges at this year’s highest price do not inspire confidence. The Euro is extremely overbought and bullish momentum is really not nearly as strong as one might think. We continue to watch and wait for signs of topping.
Strategy: Attempt small shorts at 167.55; stop above 168.05. Short term target 167.10, then 165.65

EUR/CHF comment

admin — Wed, 18 Jun 2008 08:18:23 +0000

The unit tried to break the second intraday support line @ 1.6150 (now 1.6160), but failed and rallied towards 1.6185 static resistance. I still feel we’ll see this cross breaking this support line and moving lower, only above 1.6230 this view is negated. Extreme OB level is 1.62 now.

Today’s Economic Events

admin — Wed, 18 Jun 2008 08:18:04 +0000

Time (GMT) Country Event Importance-Volatility
08:30 GBP MPC Meeting minutes 3-4
09:00 CHF ZEW Sentiment 3
10:00 GBP CBI Industrial Trends 3
12:30 CAD Leading Indicators 2
14:30 USD Crude Oil Inventories 2
18:30 GBP BoE Governor speaks 3-4

Note: Volatility is measured from 1-5 (low-to-high) importance, depending on the volatility it can generate.

At the Open. Pressure is on the USD.

admin — Wed, 18 Jun 2008 08:17:40 +0000

Good morning everyone, hope you are fine. The day starts with the USD being pressured by the Europeans, as technical indications (trendline breaks etc…) have taken their toll on the Dollar in the end.

USD/CHF is trading below the second broken uptrend line @ 1.0440 after having completed a 30m bearish MA’s cross. I feel we may see the extreme OS level 1.0370 level coming into play throughout the day. EUR/USD has broken the important static 1.5510-20 area and is now eyeing the next tough area 1.5560-75. GBP/USD has found a good double base around 1.95 and is looking at the immediate resistance 1.9580 at the moment. Where the USD is still making some progress (due to the fact that it broke a downtrend line yesterday) is vs the JPY, but it definitely is not out of the woods yet, as there is a fair probability a bearish MA’s cross will be confirmed there soon, and hopefully that will also help the JPY in the crosses, as it finds itself again pressured by both GBP and EUR, with EUR/JPY very close to 30m extreme OB level. The EUR is the strongest currency in the market so far.

Welcome to my real-time Forex Market show, hope you’ll enjoy it.

USD/CHF back above broken trendline

admin — Tue, 17 Jun 2008 11:55:59 +0000

Although I don’t like the upside in this pair as it has been breaking all the support lines in the last couple of days, if (and only if) 1.0405-10 holds this time it might see a spike towards the high 1.04’s again, but am very doubtful we’ll see any real progress in the pair, especially as it might trigger a 30m bearish MA’s cross anytime soon. Selling around 1.0450-80 still looks good as I feel some extra downside is to be seen here, even if USD is to make a good rally vs the Europeans afterwards.

EUR/USD gets hammered by ZEW

admin — Tue, 17 Jun 2008 09:10:34 +0000

As technically expected, the unit is collapsing to the mid 1.54’s after failing to clear 1.5510-20 area. Thankfully, the funnymentals once again agreed with this view as the ZEW posted a very low reading, way below expectations, which acted as the catalyst to pay off techs.

However, I am not that bearish in Euro as in Cable, so shorts can grab pips here as I feel we might see a comeback or a re-test of the highs later on.

The USD tries to comeback

admin — Tue, 17 Jun 2008 09:10:12 +0000

With the excuse of the latest Cable decline, the USD is launching (or trying to) a counterattack, aiming at regaining some of the lost ground, particularly vs EUR, JPY and CHF (vs GBP it already did recover it).

Once more, the 1.5510-20 area proved a gift for selling EUR/USD, and no doubt the unit will be under very much pressure if that is not regained. Shorts in Euro from current 1.5495-5500 area look safe ahead of ZEW data, for a trip back to 1.5450-40.

Pictet Private Bankers (Geneva) on CHF crosses

admin — Tue, 17 Jun 2008 09:09:32 +0000

USD/CHF
“…Net foreign capital inflows reached USD 60.6 bn in April compared with an outflow of USD 48.7 bn in March, indicating that there is a certain trend reversal as far as the USD is concerned, while also explaining the greenback’s uptick at the end of April. We are once again in the middle of our tried and tested trading range for the pair of 1.0250-1.0550, and we are awaiting publication of this afternoon’s housing starts data in the US, which should give us a clearer indication of the current situation of the US housing market.”

EUR/CHF
“…Opinion is divided on what decision the Swiss National Bank will take on interest rates on Thursday, with some analysts predicting that it will raise interest rates by 0.25% while others expect it to maintain the status quo. We are staying with our trading range of 1.6050-1.6250.”

Link to report

The European energy politic is full with mistakes.

admin — Thu, 22 May 2008 22:39:10 +0000

When the oil prices set new records day after day the energy politic is very important moment to stop the panic in the population by high inflation and raising prices. The one of the main energy source the oil is in low resources and is restricted. When the alternative fuels are the most important to stop the panic by absent of enough oil Europe develop project to stop the alternative fuels like methane, natural gas and others using in the transport vehicles. Few years ago Germany started with the plan to stop all nuclear reactors. If this bad plan happens the economy will stop. Finally Germany decides to back to the nuclear industry. After the idea for nuclear industry stop, Europe started plan to develop bio fuels as use agricultural production. The effect was high price jump of all foods. Europe is on the way to stop this plan. After serial of mistakes Europe make the new biggest mistake. The natural gas, methane, the cheapest gas in enormous resources will be not using. All these mistakes lead the world economy to super fuel crisis with everyday prices up of restricted resources.
The energy expert Scott Brown of World-Signals.com shows three key fuel alternatives that Europe does not use. The industry, transport vehicles and motors to use alternative fuels like methane, hydrogen and electricity. The first two are in almost unlimited resources while
are necessary improving of the technology. The electricity is possible to produce by cheaper nuclear industry and the free water, wind and solar station. The starting energy crisis will be the ever-biggest crisis in the world. Scott Brown provides the forecast that the oil prices will jump to $250 till the end of 2008. In some of the possible scenarios Scott Brown see chances the oil prices to jump to $300 till the end of 2008.

No key fundamental events on the market.

admin — Mon, 19 May 2008 16:25:54 +0000

The markets remain mix in an absent of key economic events today. The trading in Euro-Dollar is flat. The trading is based over technical analyses. The pressure over the dollar remains as overall due too the raising speculations for continue of U.S. housing slumps.
We can see new attacks on the forex market against the dollar said George Marshal forex analyzer in World-Signals.com. These attacks will test the levels of 1.60 again. The continue raise of Oil prices will continue to hurt the U.S. economy.
There is not important event to move the market, as we will continue to see trading at the levels of 1.53/57 said Peter Mill forex expert in World-Signals.com.
The Euro-Dollar today was trading at 1.5632 and recovery to 1.5573 in the time when U.S. market open today.

Euro Outlook

admin — Thu, 27 Mar 2008 08:28:41 +0000

The euro rose yesterday after the german and france business confidence data showed a surprise improvement.. also mr.trichet stated that e.u. interest rates are at the right level, dismissing doubts about an ecb rate cut soon.. the euro climbed to a high of 1.5855, before retreating on profit-taking to 1.5775 this morning.. we believe that the euro has begun a new wave of uptrend from its last week’s low of 1.5340.. if this new rally extends directly to at least 1.5905, or a bit higher to 1.5950 / 95, then we may witness an exhaustion at a certain level, followed by a broad correction that may drive the euro down to the 1.5000 level and lower.. however, if a major retracement occurs prematurely before the 1.5905 top, to approximately 1.5550 area, then we will expect a new buying-interest to emerge increasingly bullish and implying a very wide extension to the upside, calling for levels of 1.7000 / 1.8000 in the following months.. this is the technical verdict for the time-being; so, wait and see.. today, we expect the correction to extend to 1.5660 / 40 and possibly a revival of an upside momentum there; but the short-term picture is not very clear, as we can begin an important correction here to 1.5550 / 40, which will call for the above very euro-bullish scenario afterwards, only if the central banks allow it..

Morning forex report

admin — Thu, 27 Mar 2008 07:37:14 +0000

The USD tumbled sharply on Wed. as the ECB’s Trichet basically said ‘Non’ to the idea of rate cuts, stressing that growth was holding up in the Eurozone (German IFO ticked higher on the day, just to underscore this point…) and that inflation risk was still too high. Given that the ECB is expecting inflation to remain above their target rate all year long, it does seem that something extraordinary will be needed to turn their heads on this. The US durable goods data, by contrast, fell sharply again, not the best of backdrops for USD recovery plays. This leaves the USD looking beaten up again with the downtrend still holding a tight grip on the reins. The risk has to be on $1.59 giving way in the EUR/USD for $1.60, then $1.70 here we go as the EUR staircase is now 10 cents at a time. The best thing going for the USD is that it is already trading at bargain basement levels - and while bad news should be able to knock it through key levels, and many pundits are writing about the USD as if it is in free fall, this seems more like a USD buyers ’strike’ than a free fall. What would make the USD find friends? Thoughts of a base in rates, better than expected data on any front, and maybe some wobbles in the Eurozone data. On the charts, the EUR/USD upside risk is well known, use a push below 1.5730/1.5660 as reason to aim for 1.5450/1.5340 again. The latter is now key potential double top midpoint support, relevant only if 1.59 holds off upticks! Cable above 2.00 could see 2.04 again, chances are that 2.0160/2.0220 fends off upticks, EUR/GBP risk is for 0.79 to give way for 0.80 after all, still not favored but the risk is there once again so… In the yen, risk aversion waxes and wanes, trend wise losing 99 would be negative for the USD for 98.60/97.50, not favored but.

Evening forex report

admin — Wed, 26 Mar 2008 11:28:03 +0000

The German IFO surprised on the upside (again) with the 104.8 reading surpassing the 103.5 expected figure. Trichet was on the wires, pretty much saying that rates are ok where they are, rate cuts are not on the agenda, the EUR surged by a big figure+. This leaves 1.56 as support now, 1.59 back in play for 1.60 and then to 1.70/1.80. True, Trichet did say that he didn’t want excess FX volatility, hmmm… The Yen firmed as well which is leaving 99 in the sights, down to 97 for 95.70 again? Hmmm… EUR/GBP surged which left Cable backing away from the 2.00 break, the cross back to 0.7880 pressure for 0.79, then to 0.80 if the market takes the ‘everything is ok in the Eurozone’ mantra to heart. Again, this seems a bit of a stretch, but so far, the data is holding up. If the US durable goods figure disappoints later today, watch for the USD to really get taken to the cleaners.

Euro Outlook

admin — Wed, 26 Mar 2008 09:08:57 +0000

The dollar dropped yesterday after a fall in the u.s. consumer confidence revived the toughness of the housing and credit crisis.. investors remain nervous about the u.s. economy which is probably in a recession.. consequently, the euro climbed and retested a high of 1.5655, before retreating on profit-taking.. technically, the euro’s decline from its all-time high of 1.5905 to 1.5340 last week is considered as enough correction (for us); and we think that the rally seen since then is the resumption of the upmove that should drive the euro to at least a revisit of 1.5905 top, most probably higher, approaching the 1.6000 level.. however, some analysts still expect the euro’s correction from 1.5905 to extend lower to 1.5255, or even lower to 1.5170, before a new rally unfolds.. we believe that we are right and the first signal that would confirm our view in the next hours is the euro surmounting the 1.5690 fibonacci retracement level (61.9% of the last fall) on an hourly closing basis.. otherwise, a distinct fall below 1.5450 will signal a new decline and announce 1.5170, possibly lower 1.5145/1.5100.. for today, we expect the euro’s fall from yesterday’s top to exhaust around 1.5560/25 and a new buying-interest to emerge towards 1.5730 then 1.5770, on its way to 1.5905 in the coming sessions..

Morning forex report

admin — Wed, 26 Mar 2008 07:29:22 +0000

The USD marked time in o/n trading, with the EUR/USD retreating from the $1.5650 area, yen remaining relatively soft though. GBP remains bubbly, not a huge vote of confidence in UK banks or the BoE etc., but this looks like EUR/GBP traders are balking at pushing to 0.80 just yet, hedgers and range trading fans will be looking for 0.7750 pressure for 0.7700 in the near term, potential back to 0.74 seen after this - if the trend breakout is actually reversing. In the EUR/USD the pressure on $1.56+ opens up $1.59 and higher risk, but still leaning to limited upticks, then down to tackle $1.53 for $1.5140/1.4950 and lower. The CHF is still looking as if it can back up, with the EURX building above 1.57, see if 1.58 can start to be eroded for 1.59 and higher. True, this depends on risk aversion continuing to abate, tough to see when money market rates continue to edge higher despite CB’s pumping money into the system. Again, this is not a money issue, banks don’t want to lend money as they are trying to build up their balance sheets and don’t know who has a black hole in their books (fair enough really…). Back to the UK, and news that the FSA will be beefing up their scrutiny of banks etc. is a classic barn doors and horses exercise, the main problem with NRK was that their business model (borrow expensive, lend even higher) worked until it didn’t, at which stage does a regulator tell a private company ‘hey, your business model has risks….’ and what can they do about it? Hmm… Plenty of data on offer today, see if the IFO surprises on the upside again while the US durable goods figure will be interesting to watch for growth clues. New home sales? Stability would be good, if seen…

Morning forex report

admin — Thu, 20 Mar 2008 07:42:20 +0000

The USD is trading on a mixed note just now, with holiday trading looking to loom as many in Europe will be taking Monday/Friday off, and next week may see many out as well. For the FX market? Money being taken off the table seems likely, which should see the EUR/USD put $1.5550 through the grinder, a break below this leaving 1.55 for 1.5330 and lower. In the yen the inability to turn above Y100 on a sustained basis is worrying and this leaves Y95.70 exposed for Y90 and lower. While the risk is there, leaning to the USD finding buyers on dips for a push back to Y100 near term, then to 100.70+ for 101.40 and higher. The ‘blink’ at Y95.70 could have been the USD low being set, confirmation is needed though and breaking 100.70/101.40 would help. GBP is the current ‘fall guy’ in the FX market (well, commodity currencies too…) and Cable is expected to push towards 1.9340 and lower. The fact that 2.04 held after all was very interesting, and should have set the top. EUR/GBP risk remains on a break higher to 0.80, still not favored but… Finally, the CAD breakdown continues, the long MXN play on the exotics report hit the first target at 10.60, 10.20/00 and lower should be seen next. NZD/CAD holding flat, but still favoring 0.84 in time here, and the USD should see 1.04 give way for 1.08 over the coming weeks.

Euro Outlook

admin — Wed, 19 Mar 2008 09:48:46 +0000

The fed cut u.s. interest rates by 75 basis points taking the fed funds rate to 2.25% in a move to help financial markets and to avert a deep recession… the markets reacted positively and the stock-market registered a sharp rally amid good earning reports from two top investment banks… the euro initially fell to 1.5620 before reversing and reaching a high of 1.5715 this morning… we believe that the fed’s action was limited as the market expected a slash of at least one percentage point in interest rates… so, the euphoria seen yesterday may not last and investors may turn to the reality of a big crisis and the u.s. recession… technically, a correction was due and the revisit of 1.5620/12 seen on the euro yesterday can be considered as enough… in that case, the euro may resume its rally (1st signal being a rise above 1.5765) for a retest of 1.5905, and then for a rise in uncharted area to 1.5945/75 and 1.6030 then to 1.6140 and 1.6220/50. otherwise if below 1.5620, next major supports will be 1.5595 then 1.5535/20… the medium-term trend will turn to euro-bearish on an hourly close below 1.5500 targetting initially 1.5425/15, possibly 1.5345

Morning forex report

admin — Wed, 19 Mar 2008 07:45:18 +0000

The Fed cut rates by 75bp on Tuesday, leaving the door open for more if needed, while throwing a bone to inflation worriers and trying to ’sort of’ suggest that they are hoping that the rate cuts will make things better. The US stock market bounced sharply, bonds consolidated while the USD posted a big comeback. O/N activity has seen Asian bourses push higher but the USD is giving back some ground again. The USD trend is soft and chances are that many will have been looking for levels to put more shorts on /cut longs, with the EUR/USD risk being that a bull flag is forming. Sustained pressure through 1.58/1.5830 would increase the odds of this so… On the data front today is a lightish day, the BoE minutes may offer some insight into their thinking but the mkt is pretty much convinced that they will be cutting rates at some stage so… With tomorrow’s data also lightish, chances are many traders will start to wrap up positions for a long w/end, with some risk that CB’s do something over the holidays probably serving as a reason to be nervous. Use the 1.5550 level in the EUR/USD as the ‘turn point’ just now, while in the Yen regaining 101.40 is still the key for a turn higher. Cable does look to have peaked here, see if 1.99 can give way for lower levels, while the EUR/GBP turn lower on Tues. was interesting but unless 0.77 gives way here, 0.80 and higher risk will remain intact. Favored? USD and GBP soft trends are tough to fight, but the last few days have been interesting. If the mkt takes the view that the Fed action will avert a deep recession and the ‘V’ shaped recovery is back in play, the USD should rally big. If the mkt continues to take the view that US economy will remain soft, the USD could continue to be the fall guy. No confirmation of a turn in the greenback yet, but the yen stopped at a key point and $1.60 looms in the EUR/USD, if the USD is to get a breather, this may be a good place for it.

Euro Outlook

admin — Tue, 18 Mar 2008 09:16:53 +0000

The fed is expected to slash u.s. interest rates by at least one percentage point today to help financial markets and boost the ailing economy… some investors are also awaiting for extra steps from the fed in addition to lowering rates… the markets are in a wait-and-see mood but remain very worried… participants tend to see more dollar declines, given the severity of the crisis and its accompanying uncertainty… technically, the euro’s upmove seems to have reached an intermediate top and yesterday’s moves were corrective. this translates the wait-and-see market sentiment… however, although all indicators are in overbought conditions for the euro, there remains a big chance that the rally may continue, once the consolidation ends… next resistances to be tested, in uncharted area, are at 1.5945/75 and 1.6035, ahead of major 1.6130 and 1.6240… we must repeat that indicators are all overbought, and that any signal / rumour of coordinated central bank’s action may trigger a panic sell-off… we remain euro-bullish and expect 1.5945/75 possibly 1.6000/30 soon… we suggest to place a tight stop-loss on all euro-longs below 1.5240, if this is affordable to you

Morning forex report

admin — Tue, 18 Mar 2008 08:24:16 +0000

It’s all about the Fed today, with a 50bp cut looking a bit paltry now, bets placed on 100bp or more as Fed Chairman Bernanke continues to be seen as being willing to cut rates hard and fast in order to avert a deep pullback in the economy. Economists are focused on the Wall St. woes and the housing slump, with the softer payrolls causing many to shout ‘aha, there is the recession we have been looking for!’ although technically, two quarters of negative GDP are what a recession makes, nothing there yet. Still - Bernanke is fixated with trying to get the banks to lend money, with time probably the great healer but he can’t control that so… For choice, the Fed will be eyeing a 50bp cut, inflation is muted but not dead and buried, see if they keep some ammo back. For the USD? Still down, EUR risk is to 1.60 and higher with pullbacks through 1.5680 needed to take some sting out of the trend. USD/YEN is interesting at the 95.70 retrace level held, early days but if 99 starts to give way things get interesting for reversals here, 90 to be avoided after all? Hmm…. Watch Cable, bouncing now but upticks may struggle to regain 2.01, could be a sell for 1.9340/lower with 2.04+ risk but this would be betting on the EUR/USD upticks probably not seeing 1.59 again in the near term, a bit early! AUD and NZD are bouncing back this morning, watch out for ‘dead cat’ upticks here, pressure lower looks to resume later on…

Evening forex report

admin — Mon, 17 Mar 2008 13:28:51 +0000

The tumbling stock markets continue to dominate events, with the USD in a decent free fall. The EUR/uSD backed away from the $1.59 zone, but risk to $1.60 continues to be seen with some fears of a push towards $1.70 building. The CHF through 1.00 is interesting and leaves 0.95 open for 0.90, not really favored but with the EUR/CHF breaking below 1.56 the flight to safety play continues to roll along. GBP and CAD are the laggards with the USD actually firming against both - like being knocked out by the 90lb weakling! Cable does look like $2.04 was ‘it’ which leaves $1.99 exposed for 1.95 and a lot lower. EUR/GBP remains bid, 0.79 at risk of giving way for 0.80, then higher so… The yen break of Y100 is key, and chances are that the stock market is just starting to price in the very bad exporter news. The BoJ will be wary of stepping in given that the USD negatives are well flagged, but if the Fed does cut rates again today (trimmed discount rate to 3.25% on Sunday and allowed primary dealers to borrow at the window, and extended the borrowing period to 90 days from 30 days) or aggressively on Tuesday and seems to be trying to look for the light at the end of the tunnel etc., and the USD remains soft then the BoJ may roll up their sleeves and intervene - chances are they will be in way before the ECB steps up…..

Exotic currencies report

admin — Mon, 17 Mar 2008 09:31:08 +0000

The TRY is falling sharply this morning, with one eye on global stock markets turmoil which is never helpful, but another eye on a domestic issue which foreign investors have been happy to ignore for some time. The news that a prosecutor is applying to ban the ruling political party is a surprise, and while the ‘headscarves’ issue has been roiling around for a while, it does seem that investors have been caught on the hop by this move. Will it actually work? Who knows! Markets don’t like uncertainty and have been pricing in privatization sales and EU entry bids for Turkey, both part of the ruling party’s platform. The tumbling global stock markets don’t help the TRY at all, and the risk here is that risk aversion turns into ‘rush out of the exit door’. On the charts the test of 2.00 in the EUR/TRY is worrying and could set up 2.08 (76.4% retrace) and even 2.2070 (100% retrace), back to the summer spike highs of 2006. While not favored, the turn from 1.70 has been sharp and pretty much one way, so unless 1.95/1.93 is regained soon, watch for TRY losses to mount. Against the USD the pressure on 1.25/1.26 is building, 1.40 looks to be at risk here - buy at the latter if reached?

Euro Outlook

admin — Mon, 17 Mar 2008 09:12:56 +0000

The dollar fell to a record low against the euro and the swissie due to the extension of the u.s. credit crisis, and fears of more failures of financial institutions after stearns… the fed took new emergency measures on sunday (highlighting the emergency of the situation) by cutting its discount rate; but central banks’ intervention looks to be the last solution to calm down the market for the moment… very negative sentiment on the u.s. dollar prevails and the euro’s rally reached a high of 1.5904 this morning… technically, the upmove can extend more and more for the above reasons, and the dollar may continue to plunge… next resistance levels for the euro, in uncharted area, are 1.5940/75 and 1.6035… participants will be awaiting to detect the slightest signal/rumour of coordinated central banks intervention to get rid of their excessive euros for profit-taking.. for the short-term, an intraday fall below 1.5705 will imply a revisit of 1.5670/50, maybe lower… our long-term objective was raised to 1.6000/1.6130 for the coming weeks/months; but we suggest to place a tight stop-loss on all euro-longs below 1.5240 if this is affordable to you.. take care… beware central banks verbal interventions that may trigger a very quick /deep consolidation.

Morning forex report

admin — Mon, 17 Mar 2008 07:49:01 +0000

A wild and wooly session in Asian trading so far, with the USD under the cosh and stocks tumbling as the Fed lowered the discount rate to 3.25% from 3.50% while allowing prime dealers to access this lending facility. The Fed also increased the duration of the loans from 30 days to up to 90 days, and will allow banks to use ‘investment grade’ paper as collateral, more recycling help? The bailout of Bear Stearns (Friday) turned into a fire sale, with JP Morgan snapping the big bond broker up for a song. The FX market is taking the view that Bernanke will cut faster and deeper to try and help the economy out, but again, this is not a ‘cut rates and hope’ crisis, but rather bank officials are trying to bolster their balance sheets, so lending will take a turn in sentiment, not lower rates, in order to pick up (and time will help…). Still, the EUR/USD hit $1.59+ and the USD/YEN pushed to the Y95.70 area, key 76.4% retrace that will be interesting to see if this holds. The CHF is well and truly through 1.00, which will make skiing hols in the Rockies quite cheap for ‘gnomes’. The trend is your friend, $1.60 for $1.70 and then 1.80 is the risk in the EUR, Y90 for Y80 is the risk in the yen, but watch out as the AUD and the NZD are not firming, true, carry trades being whacked, but early warners of USD bottom fishing ahead? Hmm.. Use the $1.5680 area as supp. in the EUR/USD for 1.55 on a break, Yen is tempting sell on the ‘blink’ at 95.70, upticks through 101.40 will confirm a turn, miles away but… EUR/GBP through 0.78 leaves 0.80 and higher open, use 0.77 as the turn point here. Cable? Flat, blink at 2.04 was key…

Evening forex report

admin — Fri, 14 Mar 2008 12:21:02 +0000

The USD staged a modest pullback vs.the European and commodity currencies in London morning trading, with European bourses ticking a touch higher which seems to be driving a bit of profit notching in the USD. Reversal of trend? Well… The AUD ‘blinked’ at an interesting level, the NZD pullback is worth watchin as well, while the yen is balking at the 100 zone (sort of…). EUR/CHF as the ‘poor mans’ USD ? Big bear trend and the USD/CHF risk is clearly on 1.00 giving way for 0.95 and lower, but if (big IF) the EUR/CHF chart is actually forming an inverse head and shoulders on the daily plot, then new cycle lows below 1.5620 should be avoided, and a push above the 1.5880 zone (neckline) will leave 1.6140 to play for. Early days and a potential inverse head and shoulders is more likely to be a bear flag, given the trend, but the USD is really cheap across the board – true, it could get cheaper but… Cable blinked at $2.04 after all, see if $2.01 gives way for $1.99 and lower. The AUD could be forming a potential double top, while the NZD backed away from the highs as well. The SGD pushed back through the 1995 lows near 1.3830 after breaking down, all suggesting that some investors are taking USD’s back on board. Again, the trend is soft and next week should see the Fed cut rates by 50bp to 75bp and probably leave the door open for more cuts ahead – even if the CPI data comes out on the high side today. But, this should be well and truly priced in by now, see if USD bottom fishers start to step up on a ‘buy the fact’ play. If USD res. levels (yesterday’s USD highs?) hold just now then the trend risk will be on the USD continuing to fall away, one way trading to resume. In the yen watch the Y101.40 area on top for 103.70 and higher, support at Y99.80 seems to be building, 95.70 is at risk on a 76.4% retrace of the rally from Y79.80 to Y147.60+ . In the cross trades, the turn in the AUD/USD is worrying and downside risk for 0.9130/00 is actually high. In this, taking AUD/CAD longs off the table on the view that a push back to 0.91 is a high risk event. CPI later today should be interesting, see if the Fed can duck a bullet and get a neutral number, avoiding the ‘what about inflation risk?’ questions for a few more weeks…

Intervention fears stop the fast Euro gains.

admin — Fri, 14 Mar 2008 11:56:21 +0000

The fears that ECB and Fed will intervention on the market stop the traders by risky new bought of euro against the dollar. At the same time some of traders take profit by the last movements up. Still is early to talk for full profit taken process we believe in World-Signals.com. If follow profit taken process the EURUSD trading will turn down to levels of 1.5250. Most of the traders wait for levels of 1.5500 where the forecast is to open new long with target of new record level. The dollar was supported after the release of European consumer prices and wages rose more than economists forecast, as leave room to ECB to lower the interest rates in the second half of the year. The EURUSD was trading today just before the start of European session at new record of 1.5650. Some traders already speculate when are possible interventions as the forecasts show levels of 1.60 for such intervention.

Euro Outlook

admin — Fri, 14 Mar 2008 08:41:18 +0000

The dollar resumed its slide yesterday on growing concerns about the u.s. Credit markets, amid rumours of failures of more hedge-funds, and also a surprise fall in retail sales data that seemed to confirm recession fears… The euro rose to a new peak of 1.5650 this morning, and there are no clear signals showing a loss of upside momentum yet… The bearish sentiment on the u.s. Dollar prevails, but the sharp slide of the last days needs a consolidation… technically, the euro’s rally can still extend more & more for the above reasons, and the dollar may continue to fall as long as no special measures are taken by authorities to help reducing market concerns on the u.s. Housing problems and ailing credit markets… The single currency is navigating in uncharted area, and participants are awaiting to detect a major resistance that would cap the euro’s rally in the coming hours/days… Above 1.5650, resistance levels of 1.5735/90 then 1.5810/65 can be tested; but watch a break of 1.5430 for a prior correction, that may extend downwards… Our long-term objective was raised to 1.5965/1.6130 for the coming weeks/months, but we will place the new long-term stop-reverse level at 1.4940… beware central banks verbal interventions that may trigger a deep consolidation…

Morning forex report

admin — Fri, 14 Mar 2008 07:56:03 +0000

The USD sank like a stone on Thursday and remained relatively soft o/n, with talk of a USD crisis continuing the make the rounds. While retail sales were weaker than expected at -0.6% (0.2% expected), ex-autos fcoming in at -0.2% (0.2% expected) the softer economy story has been running for some time and the market should have priced in 50bp to 75bp rate cut risk for next week already. This looks more like the uncertainty over the CDO mess continues drive a ‘USD buyers strike’ which is leaving the EUR and the rest to push a lot higher in spikey one way trading. The trend is your friend and the break of $1.56 leaves $1.60 open, with big swings to 1.70 and 1.80 still at risk after this. Favored? The EUR looked lofty above $1.30!!! Trichet and co. are probably wondering what to do as they can’t really lower rates given the amount of hawkish commentary coming from them over the last few weeks, and they probably see intervention as the last resort of a desparate central bank. They will have seized on the comments from S&P yesterday that suggested that the worst of the subprime writedowns was probably over, but then again, they thought that a ‘pig with lipstick’ was AAA so… For today the focus is on the CPI data, if this pushes higher then the Fed will really have a tough time of squaring the circle as they have ‘primed the pump’ in a big way, and if inflation starts to take off then… For the USD the EUR/USD would need to push below 1.5550 today to get USD bottom fishers thinking of 1.5330/00 pullbacks, while the Yen is still flirting with 100 for 97.50 and 95.70 on a retrace move. Keep 101.40 as the turn point on top just now for 103/103.70, the latter key for 105/107. Bottom fishing right now is well and truly tempting, and the BoJ must be thinking about this as the Nikkei continues to tumble, and to be honest, would the Fed and the ECB really give a hoot? Cable looks bid but 2.04 should be a sticky point, while EUR/GBP remains favored to top out ahead of 0.77, trend is up but GBP really should be finding frds up here. Still like picking on the CAD with AUD and NZD longs, while the CHF above 1.00 vs. the USD is very tempting on a bottom fishing play as well but unless 1.03 is regained, the trend risk has to be on a push towards 0.97 and even 0.95…

Crude Oil forecast is to reach $125 in April 2008.

admin — Thu, 13 Mar 2008 11:21:23 +0000

The Crude Oil breaks above $110 for first time. The Crude Oil set new record at $110.15 during the end of U.S. session. The Crude Oil breaks above $100 for first time on February 22nd 2008. Just 22 days after this psychological break above $100 the crude oil break $110. The raising of the oil would not stop. In World-Signals.com we predict trading levels in April 2008 of $120-$125. At the end of 2008 the Crude Oil will be trading at the levels of $180-$200. Many traders turn their investments in commodity sector. The oil is on the way to set new records every day while OPEC continue to hold the production at the same volumes and the dollar continue to suffer by U.S. recession. The traders use any turning down with $1-2 to buy again expecting new records. It is necessary strong support by OPEC and the central banks to stop the market panic.

Focus on Yen

admin — Thu, 13 Mar 2008 10:56:57 +0000

Background and outlook: The Yen has surged across the board o/n as the news of a big mortgage-bond fund nearing collapse seemed to drive flight to quality trades, with the other side of the coin being the lifting of the carry trade funding. While this sort of flow could continue, chances are that the BoJ will not be as relaxed about the surging yen and the tumbling stock markets as strategists seem to think. The move over the last two days from Y103+ to testing Y100 is opening up the door to Y80, and the BoJ will know this. While bottom fishing strategies are favored, there is little on the charts to back this up, waiting until Y103.70/105 is regained to call for a base would be the ‘prudent’ USD bullish approach, while yen bulls need to see Y100 give up the ghost, and Y101.40/103.70 fend off upticks in the near term…

Fundamentals: No point in looking at the Japanese fundamentals as they are mixed to soft, with the best part of the upcycle in the past. The BoJ would like to raise rates at some stage but knows that market events are not giving them room, and rate cut talk is making the rounds. The US side of the coin is soft, but probably not as soft as the market thinks. While trade with China will reduce the direct exposure to the US economy, the trade flows probably end up in the US at some stage so…

Technical: The trend remains USD bearish as the turn lower from the Y124 probes last summer have persisted. The Y112/108 break left Y105 exposed, and the turn below this level has made Y101/100 quite vulnerable. The chart risk is for Y80/78 to be hit in order to test the 1995 USD lows, with Y50 swing objectives technically valid below this. While this is possible, watch out for ‘bottom fishing’ risk, which makes Y103.70 to Y105 a very important area for Yen bulls to hold. A drive above this area would leave Y107 exposed, with Y112 and higher then in play. Momentum indicators are very oversold, but this can persist for some time, which makes the price action at critical levels (now) very important

Euro Outlook

admin — Thu, 13 Mar 2008 09:08:23 +0000

The dollar tumbled, and the euro rose to new all-time highs at 1.5585 this morning as the reaction to the fed’s liquidity measures (taken in the previous day) lost its positive effect on the dollar; thus reviving the big worries about the state of the u.s. economy… in the morning, positive data of eurozone industrial production had already boosted the euro; and the u.s. markets continued the trend on doubts about the fed’s action and recession fears… technically, the euro’s rally can still extend more and more for the same reasons, and the dollar should continue to fall as long as no special measures are taken by authorities to help reducing market concerns on the u.s. housing problems and ailing credit markets… the single currency is navigating in uncharted area, and participants are awaiting to detect a major resistance that would cap the euro’s rally in the coming hours/days… a tentative preliminary calculation announces levels of 1.5600/25/85, then 1.5735/90 and possibly higher to 1.5810… we raised our long-term objective on the euro to 1.5965/1.6130 for the coming weeks/months, and our automatic systems place the new long-term stop-reverse level at 1.4900.. beware central banks verbal interventions that may trigger a deep consolidation

Exotic markets report

admin — Thu, 13 Mar 2008 08:09:41 +0000

EUR/SKK remained in a very tight range on Wednesday ahead of today’s CPI release. Inflation data should provide further indication of how committed the authorities are likely to a revaluation in the SKK’s central parity within ERM2. Slovak interest rates at 4.25% are largely in line with those of the ECB. However, economic activity remains strong suggesting the potential for higher inflation. Q4 GDP registered growth of 14.3% on an annual basis. Industrial wages this week registered a rise of 8.1% y/y in January while retail sales in the same month surged to 15.6% y/y. Ahead of comments from various officials at the end of last month which supported the case for a revaluation of the SKK, opinion polls were suggesting that EUR/SKK would be fixed at a rate of around 32.75 when Slovakia adopts the euro which is planned for 2009. Despite efforts by the CB to play down these comments, revaluation based on the economic fundamentals remains likely suggesting SKK is a buy on dips.

Morning forex report

admin — Thu, 13 Mar 2008 07:14:03 +0000

The yen surged o/n with the Y100 zone approached as hedge funds seem to be hitting the all in NY. Why buy the Yen on a hedgie failure ? Why indeed. This looks like a USD, EUR, GBP etc. buyers strike, and while the Yen could firm further as the chart risk is clearly on the yen surging across the board (very trendy currency), for choice these are bottom fishing levels at hand. True, if 100 gives way and the yen surges to 98+ and then comes back and fails to recover 101.40/103.70 etc, then the big trend bias will be to go for Y80 and lower. But for now, the USD story seems a touch over cooked - the data is soft, but not disastrous. The ‘decoupling’ story is still not proven, and the tumble in Asian bourses seems to suggest that it is a myth and that the slowdown in the US will hit across the board. For the yen? Gov’t officials are starting to moan, big exporters are hitting the wires suggesting that they are not happy and are surprised, the BoJ intervention risk should start to step up. Market strategists usually harp on about intervention not working, and while they are right in that mid-range action can get swamped out, in general, creating two way risk does have an effect, especially if the fundies are not quite ‘right’. SNB meets today, should keep rates flat and moan about FX volatility. EUR/USD through 1.55 leaves 1.56 open for 1.60, USD seriously cheap here, can get cheaper, use 1.55 as nearby pivot, 1.53 needs to give way on a sustained basis to get excited about 1.5140/1.4950. Cable up, 2.04 risk, favoring leaning into this for 1.9760 and lower later on but

Euro Outlook

admin — Wed, 12 Mar 2008 08:29:22 +0000

The FED took a major action yesterday: it lifted short-term funding to primary banks to usd 200 billion, accepting a wider array of mortgage debt as collateral; thus boosting the banking liquidity… previously, the euro rose to a new all-time high of 1.5490 in the morning, after positive data of german zew economic sentiment survey… the dollar rallied after the fed’s strong liquidity measures and the euro fell to as low as 1.5285… technically, as we explained in our last reports, the euro was clearly overbought on almost all technical indicators, and the sharp decline after the fed’s action is a result of this overbought situation… now, we believe that the euro has entered a period of a major consolidation, that should normally imply a revisit of at least 1.5200/1.5190, but most probably a deeper correction should unfold and drive the euro ideally to 1.5090/1.5065 in the next sessions, within 1-2 weeks… only a new (unexpected) rally above 1.5445 today may announce a new upmove to 1.5490, possibly a bit higher to 1.5510/25; but there, we would expect a new consolidation to occur… our long-term objective at 1.5490/1.5500 was finally hit; but we will raise our further euro-appreciation target to 1.6000 only after a daily close above 1.5525 is registered…

Exotic currencies report

admin — Wed, 12 Mar 2008 07:22:07 +0000

The TRY rallied on Tuesday as the US equity market surged, risk aversion taking a back seat again (greed trumping fear?). The push below 1.90 in the EUR/TRY looks to leave $1.83 open on a pullback, then to 1.80/1.78 congestive support. The CB is expected to keep rates unchanged here for a while as they walk the line between inflation fighting (too high) and trying to lower rates to help out a stalled economy. The TRY’s recent wobbles will not have gone unnoticed by the CB, and they will be taking the view that its a two sided coin = softer TRY will help exporters, but inflation risk will have edged up a touch too. For traders, the push towards 1.95 could have set a near term top, but a drop below 1.80/1.78 will be needed to confirm a top in the cross once again, leaving 1.70/1.60 to play for further out. The key? May not be the TRY fundamentals (flows good, c/a bad, rates appealing) but rather risk aversion, as has been the case in many markets since last fall. This would make the TRY/YEN a key trade, with the push towards 80 over the last few days seeing some buyers step up, 85 key here for a push back to 90, then up to the top of the range closer to 99… Risk is at 80/78…

Morning forex report

admin — Wed, 12 Mar 2008 07:21:33 +0000

Equity markets rallied sharply in Asia, taking the lead from the US where the Fed’s injection of $200 bn of liquidity sent stocks soaring. The USD rallied a touch on Tuesday, and while this is small beer compared to the big downtrend in place, the ‘outside day’ in the EUR/USD could be a key day reversal (higher high than the previous session, followed by a lower low, coming at new all time highs makes it important…). These are best seen in hindsight and can be tough to trade, for choice sustained pressure below $1.53 would be a good USD bullish clue, while a break of $1.5140 would leave $1.4950 to play for, trigger for a bigger EUR slide towards 1.43+. The yen and CHF are in play as well, with the USD favored to push through 103.30 for 105/107, while EUR/CHF rallied very nicely, see if 1.60 follows on. The AUD and NZD surged, and while the gains could continue for choice looking for the USD to find bottom fishing buyers, still like picking on the CAD for the short side of these trades. Cable is finding breaking above $2.02 tough, looking for pressure below $2.00 for $1.9980/1.99, then lower. Early days for USD bulls though, but things are getting interesting. On a trend basis, the USD is still soggy as you like but if yesterday’s USD lows across the board hold, then USD bottom fishing will step up. For today, light data, focus on the UK’s Chllr budget, see if the City finds a bunch of non-doms calling their accountants (and booking the movers…) after he is done…

The first Fed supports for the dollar come today.

admin — Wed, 12 Mar 2008 03:09:16 +0000

Today the Fed makes the first support for the dollar by many times. For first time the dollar gain so much against the euro after the very disappointed reports for the U.S. growth forecast and the better than expected Euro Zone and especially Germany Sentiment Index. The dollar was trading at 1.5493 against the euro during the noon in Europe. The Fed finally takes action as announced plan for support of the credit market crisis with fresh $200B available through weekly auctions. Just for 3-hours after the news the dollar gain over 200 pips against the euro. If the Fed measures are adequate and continue to support the dollar in near-term the trade should back at the levels below 1.50. The Fed statement today is signal that finally the Fed is care about the crisis in U.S. mortgage sector. But it is necessary more steps to stop the falling dollar.

Evening forex report

admin — Tue, 11 Mar 2008 11:44:59 +0000

The USD fell out of bed in London morning trading as the German ZEW figure came out better than expected at -32. With ECB officials on the wires suggesting that price pressures will remain high and pretty much taking rate cuts off the agenda in the near term, the USD’s tumble seems pretty understandable. However, the USD may not fall as much as the technical targets suggest, given that the dips do seem to find buyers. The focus for the rest of the session will be on the US trade deficit, which may be a damp squib if the market takes the view that the oil effect is swamping out the rest. Still - on the view that the petrodollars are being recycled (for the most part) then the focus should be on the export side of the picture. The healthy surge here has seen new records posted, which are pluses on the GDP scorecard and should help the US economy weather the slowdown. True, it is unlikely that the US can export its way to prosperity, but the super soft USD does have some benefits. On the data side, the next big thing will be retail sales on Thursday, with an ex-autos number of 0.2% widely expected. If this holds up, the USD may find some buyers, but the risk has to be that the number disappoints. For today, see if the trade figure doesn’t deteriorate as much as feared, tough to get a sustained USD rally off this, but it may help. The trend risk in the currencies remains on the USD downside until the Yen can clear 103 for 105/107, with the EUR/USD really needed to punch below $1.53 for $1.5140/1.4950 to turn aside 1.60 risk. Difficult just now but… Taking profits in the long Cable idea just now, while $2.04 ’should be’ reached, the price action is a bit whippy, $2.02 may be tougher to break than thought. Poor mans USD upside trade? EUR/CHF is turning on a dime just now, big downtrend to reverse but see if 1.5765 can be regained for 1.60…