Monday, December 28, 2009

EUR/USD Day Chart

Euro/USD chart added in charts section (see above).

(daily)Pivot = 1.4858, R1= 1.4499, S1= 1.4273

Primary Trend = down (below pivot and trend-line)

Short Trend = up (30 min higher lows)

tip.. watch resistance level 1.4499 in daily-timeframe and any attempts to get above it and watch the peak and troughs in the 30m time-frame. This will give you the approximate current strength of the USD because 57% of the dollar index is vs the Euro (known as the anti-dollar). This pretty much wraps up the trading year. Good luck forex traders!

Japan, Asian Markets, Euro

Nikkei rises to 4month highs on factory output data. Chinese Premier's made positive sentiment comments about the Chinese economy and probability of a recovery. Chinese Central Bank Adviser Fan Gang said there's no need for the Yuan to fall. "Even in a long-term view, the yuan has no reason to fall against the U.S. dollar, euro, yen or any other currency", Fan Gang said. Fan stated China's low inflation, low government debt level and rising productivity as reasons for yuan strength. The Euro extended gains against the dollar in choppy trading. Economics and Business Research (CEBR)has warned the Pound could soon be worth less than euro. This weeks economic data is very light but jobless claims on Thursday for USD will be of major focus.

Saturday, December 26, 2009

Wednesday, December 23, 2009

aud/usd, gbp/chf, gold - looking back at yesterdays action

aud/usd still in long-term down trend below pivot .9136 and in between resistance of .8903 and support of .8689 on daily time-frame. The hourly has been showing a good degree of buying and making ground on .8903 resistance.

gbp/chf the pound took considerable heat as it weakened against the Swissy, even with chatter that the Swiss National Bank is conducting franc-selling intervention and comments by the SNB that it would be premature to raise borrowing cost due to down-side pressures to inflation. Still well below major resistance of 1.6890 and above pivot of 1.6296. In the shorter-term there is resistance at 1.6632 and support at 1.6593.

gold traded in a volatile range and recently breaking out from 1087.14 and bouncing again at 1087.14. key pivot area is 1070.53 and below this mark will make it a new downtrend if 30m lower lows confirm it. currently 30m lows are higher with the last through at ruffly 1087.14 which is also a key area of price action.

Tuesday, December 22, 2009

gold, dow, eurozone financial stability questions...

gold still making lower lows and holding to the daily down-trend theme.. no surprise there. Dow slowly crawling higher.. again no surprise. In the Eurozone more attention is being given to Greek financial stability while demand for safe-haven dollars / higher bond yields increase / steeper curve bond yield is both good for US dollar and US stock market. U.S. yields at four-month highs and the steepest yield curve on record signaling investors believe recovery is underway. On a separate note Fitch Ratings warns British and French they are at risk of losing their AAA status unless they map out a clear path to budget discipline over the next year. Bank of Japan stated yesterday their intention to fight deflation. All of which are US dollar supportive.


good link on the Greek financial mess / recommended reading:
Greece hit by strike after downgrade
"Greece's public deficit is set to rise to 12.7 percent of output this year, far above the eurozone limit of 3.0 percent. Debt, now at 300 billion euros (442 billion dollars) is also expected to come to 113 percent of gross domestic product in 2009 against an EU target of 60 percent. "

Monday, December 21, 2009

aud/usd speaking of longer time-frames long term trend

stepping back and looking at a daily chart aud/usd has clearly went from a stage of setting higher lows to recently lower lows. I have a pivot of .9136 which has to be exceeded for long term bull trend to continue. as it stands I consider this to be a aud/usd bear trend in daily time-frame with next support at .8689 and resistance at .8903 should there be a bounce but looking at the daily it looks like a boulder pushed to the top of a hill and waiting to fall. There will have to be some buying soon to support that uptrend and the chance of there being parity (ie 1.0000 level).

Gold sell-off in US session

Gold finally broke through support I defined earlier 1110.30 and failed to convincingly break through resistance and hold above it. This makes sense since gold is in a long term down-trend according to my daily charts. A slight bounce occurred at 1089.95 which gives new resistance of 1101.14 and 1104.60 - the later is new major resistance point (1104.60) where alot of price action occurred and a 30m Fibonacci level. A strong sell-off occurred during US session pushing bellow 1110.30 former support and establishing new short term low. Buying interest from the bounce so far is weak and has to pick up momentum of buying to make a meaningful rally. Another key price point I have defined is 1098.47. Above 1098.47 could establish a uptrend but a look at the daily is very bearish after the long slide below 1200 and if 1098.47 holds it should see lower levels soon and possible take out 1089.95 the recent low. When gold made all-time highs the dollar wasn't making all-time lows which is a positive divergence for the dollar. All in all I see alot of resistance and not much support. The path of least resistance is lower if oversold conditions don't provide a bounce of some sort. If 1089.95 is taken out it should be important resistance.

good quote by Kathy Lien of GFT in Marketwatch article:

"The dollar is now expected to continue reacting to fundamental factors, such as rising on upbeat economic news that would make it more likely that the Fed will eventually hike rates, Lien said.

That trend, she said, should continue at least until early January when the government releases the next key U.S. jobs report for December." link to full article:
Dollar rises vs. rivals on economic hopes

with stronger jobs numbers / stronger US data the shift of concern will ultimately be inflation. Of note retail data has been stronger along with jobs which could indicate the consumer is more willing to spend into the economy relieving some of the recessionary fears.

US equities

dow futures gaining and european / uk stocks gained. DJ30 climbing steadily in short-time frame testing 10309.52 resistance weaking the usd modestly.. However gold has failed to give much response to equities strength (ie usd carry correlation with equities not working). aud/usd has just briefly touched .8863 resistance I spoke of in previous post slowly climbing through resistance zone I defined but not above. should it go higher .8863 will be important support that has built up but failure to hold above 88.50 will keep the climb in check. The key question now is how strong will the equities rally be and how long will it last.

aud/usd & gold

little bit of a pop with resistance at .8850-.8863 (strong resistance zone) while gold is unable to break above 1116.78 and showing a lack of direction at this point and looking illiquid at this point. If aussie trades above .88.63 I expect gold to trade above 1116.78 but I'm not jumping at anything without some confirmations. note that gold is just above 1100.30. below 1110.30 and I have to think bearish but without liquidity these moves are just market chop.


From my news feeds listed to the right side of this page:

Good article on Telegraph.co.uk news:
Recession over by end of year, CBI says
Stating that recession could be over.


Another good article, this one on Seeking alpha:
Long USD Trends, Neutral on Momentum
article supports strong dollar weak equities.

gold

gold again failing to get over short-term resistance 1116.78 leaving the question of the validity of this counter-trend bounce. gold is just a hair away from tuning near-term bearish if it goes under 1110.30.

Sunday, December 20, 2009

gold

gold not giving up on 1116.78 resistance in thin trading.

aud/usd & gold

.8850 area was tested and breached (see previous time-stamped post). I have to wonder now if .8811 will also be tested. Gold has aslo failed to clear 1116.78 resistance although selling is still light at this point no that it can't pick up it very well could. This is why i'm out longs for aud/usd ie the lack of follow-though in the market at present.

aud/usd

has been unable to establishing any footing. I'm guessing it will test .8850 support. resistance rejected last upmove at .8891 now important resistance area.

DJ30 after hours dow

Dj30 firming up in short term hourly time-frame but running into resistance. key resistance at 10309.32, well above key support at 10233.48. the daily time-frame has yet to firm up looking more bearish than bullish.

aud/usd gold

choppy trade.. .8915 resistance holding so far. .8811 support. lack of follow through to go higher so far.gold making a charge higher. support 1112. resistance 1121.57. buying interest so far are descent with no major sell-offs yet. looking at the daily and 4hr gold chart I have to be skeptical of the slight up-move at this point and believe to still be in a downtrend but he hourly appears strong.

Thursday, December 17, 2009

Update - Where will gold go?

Gold has been in a steady counter trend down. I say counter trend because it's above my daily pivot of 1054 but since peaking at 1225 it has been in steady decline without making many challenges to resistance. That can be the great thing about gold - at times it will seem to stay in a nice long trend. I currently see it as over-sold but if the US dollar continues to strengthen it could stay that way. Sometimes indicators can embed themselves at extreme ranges and stay that way for a prolong time and with gold it's no exception. Think of a pilot losing control of a plane, it sometimes takes awhile for them to get the instruments under control and level the plane out. The rate of fall with gold looks pretty substantial so there's a little fear in the market and investors are unsure about the market and are afraid to step in to challenge the higher levels. But there could be a pop at anytime in oversold conditions. In the 30m time-frame gold has had some light buying but on the most part there are lower lows and alot of resistance above thanks to that gradual and steady fall. I'll keep you posted on further developments. Important short-term resistance is 1112.60 and 1118.16 with support at 1094.63. It will take a pick up of buying to get through these resistances and right now buyers seem to be fading out.. time will tell.

Update - eur/usd, Asian markets down

eur/usd double bottom right near support at 1.4303. key resistance at 1.4415. Asian stock markets being dragged down by the pessimism in the US markets.

Update - aud/usd

aud/usd well under my daily pivot 0.9172 and in bear territory. the 89.00 level has also broken down. 30m time-frame lower lows confirm daily bear trend. selling has slowed in the past few hrs and nearest short-term support level is .8841.

Update - Dow Jones (dj30), banking gloom hits equities

The dow retreats on expectations that the fed will raise rates earlier in 2010 than was previous expected driving investors away from the carry trade / taking on more risk which strengthened the dollar. Suffering from the equities sell off were financials and basic-materials corporations. DJ30 still trades above my long term pivot on daily chart of 10,073 so is still technically in bull territory. This recent retreat puts dow at the bottom of a sideways channel. Should this channel break I expect to see lower levels and a test of the pivot. This is quite possible right now with increased pressure to get out of equities and into the dollar. On a 30m time-frame DJI30 is clearly oversold but there's a lack of buyers. 30m lower lows contradict the daily uptrend. Short-term resistance is at 10,294.

Wednesday, December 16, 2009

Update - gap down dow jones (dji30) oil holding gains.

While I was away I noticed a gapdown in 30m timeframe from 10438 to test short-term support at 103868. Dow looks oversold in 30m time-frame but daily has room to drop should a bear course take hold. Meanwhile oil (wti) is holding onto gains with room to climb in daily time frame. By just looking at the moving averages however I think it's possible oil could retrace a bit but I wouldn't jump in on any shorts just yet as it's above pivot and in bull trend so all dips should be considered counter rallies above 71.89.

test post

testing rss feed.

Update dj30 post fed meeting

dj30 flirted with the 15000 level but was halted at 15011 resistance and unable to get past Monday's high. US federal reserve pointed to the reluctance of businesses to hire workers as a main reason to continue to hold rates at historical lows. Economic conditions "are likely to warrant exceptionally low levels of the federal funds rate for an extended period,".. The word is that the fed will not hike the rates until at least summer of 2010. The fed failed to define an exit strategy in the meeting underscoring uncertainty in the economy.

Update crude oil trade symbol wti

Yesterdays crude call worked out (t1 73.97, t2 75.24) with target 1 being exceeded. can move sl up and target next targets or look for a pull back (if there's one) but crude is now in bull territory above my daily long term pivot of 71.89. long range bull targets are t3 76.21, t4 78.97. no strategy yet on the playing the longer term targets. have changed bull targets 3 and 4 after move. these are not just my bull targets but what i fell to be important levels. if price goes below my pivot (71.89) this will all change at least temporarily until a trend has been established. at the moment 30m timeframe supports long time-frame (daily) with higher short term lows although 30m is overbaught at the moment but on the daily there is still room to run. t2 and t3 are definitely possible at this point and t4 would put crude at new 2009 highs. well have to wait and see if the oil market is as bullish as it looks. fundamental drivers were words from opec and inventory declines.

Tuesday, December 15, 2009

Update aussie data comes in soft

softer than expected Australia Q3 GDP combined with lower rate expectations temporarily sends aud/usd below 90.00 handle. dj30 has refused to go lower and currently there is moderate bid tone. The question is will the dow be able to make new highs and exceed the 10500 level.

Update aud/usd and dow (dj30)

aud/usd - getting hammered in Asian open. Now well under my daily pivot 0.9172 possible stronger bear trend is taking hold. next major daily support level is at .8905. 30m chart confirms downtrend with lower lows and coming off lightly overbaught levels. short-term support is at "roundlevel" .9000 handle. .9088 is strong resistance area should there be a bounce. Dow futures having a bit of trouble gaining any optimism. key short term resistance at 10467.

Update eur/usd still in long term bear

eur/usd below my pivot area of 1.4846. daily charts reaching oversold conditions. 30m trading near s3 support 1.4535. I'm guessing next session might be a reversal session or after the US fed meeting. long range support area is 1.4481 and below that in case of bearish continuation is 1.4216. as long it's below my pivot point 1.4846 i believe this still to be a bear trend confirmed with lower lows in 30m timeframe. As I post this there is light buying from oversold conditions with key short-term resistance at 1.4567 and "roundnumber" support at 1.4500 handle. if trades above 1.4567 there will be a bullish case in the short-term however will be considered a counter rally below 1.4846 major bear trend with a long ways to go down if dollar bull strengthens. This would possible be amplified if the dow slides unless correlation breaks. dow in long term uptrend above 9917 with major resistance at 10574. currently lower lows in 30m timeframe short term resistance at 10481. And oil trying to jump back into bull territory above 71.89 confirmed with higher highs in 30m timeframe. a steady stream of euro and US data have yet to be released this week.

Update

dow jones (dj30) bounces at support level (s1 10438) in what appears to be thin trading. no follow though yet with strong resistance at the 10511. oil still holding onto gains after a rapid move higher. Move lower in dow seems to be being blamed on inflation statistics. Higher oil is the result with opec making a strategic move to manipulate oil higher. The key concern now is US fed reserve expectations to raise rates in the future ie the exit plan. Still much data yet to be released this week of the currencies I follow (usd, eur, aud, cad, gbp). Of major concern is US federal reserve stance and the fate of the US dollar in 2010 and the concern of near zero interest rates.

Update

crude oil (wti) blast higher though 71.89 pivot. holding above this will put crude in bull mode with next short range bull targets at t1 73.97, t2 75.24, and long range bull targets at t3 77.25, t4 80.52.. sl at 71.60. may be overbaught in 30m time-frame but has room to climb in the daily.

dow jones pressing lower testing support 10438.

update

dow jones (dj30) still failing to find buyers to get over the 10511 resistance level. hong kong gets hammered in the asian session and tokyo slides lower -.22%. european equities slightly firmer but london slides lower -.56%. the dj30 looks to be picking up steam lower in the 30 minute timeframe and yesterdays daily candlestick for the dow (dji) appears to be a bearish configuration. although buyers stepping in at the 10455 support as I write this. again the lower end of this channel is 10300.

crude oil advances above 70 but below 71.89 pivot - opec cartel forcast a demand rebound. still in bearish configuration but oversold day chart with room to bounce. will be interesting what happens at the pivot. resistance is at 71.12 in the 30m timeframe.

aud/usd firmed up just below support 90.49 but looks to be having trouble trading above it. looking for lower levels here.

usd/cad retreating but has yet to reach oversold conditions in 30m timeframe. day chart is still in a volatile range.

update

dow jones futures (dj30) sliding in European session. It appears that 10511 is proven to be the price of resistance to watch. support is at 10455 and by the looks of it will head there. this is not a market for the weak stomach. it will be a struggle from here to regain bullish momentum i think. crude is also sliding with strong resistance at 69.84 and looking to possible test the 69.00 round level below. the 70's look like a long ways away from here but still not out of the picture just yet. if 69 break down that will be a different story. as this is happening the dollar is strengthening across the board.

Monday, December 14, 2009

weekly kickoff: forex views technical trade signals

usd/cad(neutral) - appears to be very flat / rangebound in daily timeframe. I'm watching the 1.0614 0 1.0491 area to give a better idea on the longer trend.

aud/usd (neutral) - has been trying to go up but not showing any follow through at the 93.00 handle.

gold - (neutral) - but expect the longer term uptrend to test higher highs after pull back. This view may change as there is great uncertainty of the US dollar. Would expect the USD to rally if equities retreat. I think longer term gold will go to 1300 area but would not jump in at this point.


gbp/usd (neutral) - i hate to say neutral so many times but this is what the market is giving. This is clearly above my pivot of 1.6048 so I have to still say it's in an uptrend but it is not making higher highs on daily timeframe. I'm looking for more information on this one. Short term has looked on the weak side so I would not be surprised a move lower to fibo level 1.6257 area but i'm not taking position in any of these hence the current view of neutral. Stay tuned for updates

dow (mildly bullish) - dow trades at the top of a multi-week channel testing key resistance at 10500. Bearish side of the channel is 10300 and below that i have major support at 10037 where there is a confluence of indicators I follow. There seems to be weak interest at this point or lack of follow through so I'm mildly bullish and expect that a pullback could occur if buying doesn't pick up soon.

crude oil WTI (neutral) - Yep neutral again. I'll explain... I have my pivot at 71.89 so I have to think this is a downtrend. But it's very oversold and could bounce to test that pivot. If not I see a possible test of 65.20. I have not kept up with the fundamentals in crude but I have to guess that there's more supply than demand at this point. If there's a bounce and it's strong it would be able to get over 71.89 in that case that would but the bulls back in control.

notes/news/perspective- heavy economic data week. fundamentals could sway the technicals. more of a reason for me to be neutral and trade short term ranges. The Dubai crisis is temporarily sealed, but not over as oil-rich Abu Dhabi bails out neighbor Dubai with $10 billion easing some concerns of the estimated $80 billion in debts. Very mild gains occurred in US equities and gold as tentative investors gauged the strength of the run up in US equities and dow jones trades near resistance with chance of going higher. Support is a long way away if the daily channel in the Dow turns south and breaks lower. However if new highs continue to occur it will bring more confidence to a sustained rally. All eyes will be on the US for additional confirmations in economic data to the recent string of positive data out of the US. Should the channel break higher it could provide later support at this 10500 handle that seems to be a key area of resistance. There is a mixture of sentiment on the street. Some believe the US economy is rebounding while others don't believe it will happen without more solid fundamentals. Meanwhile global uncertainties still rein from the surprise Dubai debts and banks of Europe and UK that were heavily exposed to Dubai which add to the loss of faith in the financial markets abroad and further burdens on the respected economies involved. Even Japanese contractors were exposed to the Dubai market shock. the Reserve Bank of Australia's December minutes concluded that the current 3.75% benchmark rate is "finely balanced" hinting that the RBA might hold rates steady in February. And finally a stream of back to back EUR and USD data should provide some market action throughout to week. My guess is that nervousness in the markets could last for a long time to come even all the way through Q1 of next year and maybe longer as corporations weigh the damage done on the economy and retrench for the road ahead. Unless stability is restored investors and corporations will likely error on the side of caution and play it safe.