Week-end update Forex

The Ozzie is poised to head north. Action above 1.0350 is buying time.

The €, on the other hand, is stuck in heavy traffic. My gizmos show it as being both neutral and as wanting to quit being neutral. But with France's woes added to PIIGS, ???

The £ is also neutral, although it does a dance that is separate from the €.

The Loonie is bearish against $US, but...

The $US seems to be trying to get turned around against ChF and ¥.

3 yr auction at 10

This doesn't usually generate waves, but in the current fearful environment, you never know. If you're short USD/ChF or BP/USD, consider protecting your position.

BP trade

BP mildly overbought. Cash them in or hope they don't go back to entry point.

GBP trade

Trying to switch back to bullish are GBP. Buy 6442 stop.6476,89 &7500 are upside targets of the break out.

cable trade

An hourly close below 16400 triggers a short. Early targets are 6356, 6343 with main target at 6328

Euro & Ozzie trades

An hourly Ozzie close below 370 should set up a move down. Primary target is 10222 with lesser targets of 10253 & 10284

An hourly Euro close below 4318 should trigger more selling. Primary target is 4215; lesser targets are 4236 & 4257

Ozzie

Next Ozzie target is 10620 but I'll be surprised if we see that today.

Update

$A are trying for 10527

€ next target is 14330

Forex for Aug 3, pre session

Ozzies are not so bullish now. I'd make the odds about 3:2 for strengthening of the USD Wednesday. Probably better odds will show up late in the week. The Euro continues to slide against the USD. The miracle is that it hasn't been hit hard. BP...??? and the $C is likely to continue to fall against the USD. On the USD/$C chart, look for a run to 9780 or higher.

1022 EDT update

Expect relaxation in bonds soon. It is happening now in $A and ­€. £ may have reached its peak, and $C its low.

Looks like politicians are being donkeys. If that continues through Monday Midnight, expect the unexpected. Midnight in DC is 8AM in London, just in time for the traders to really get ready, though who knows what reality will be.

One might expect gold up, everything else that is denominated in USD down, but I will wait until the smoke clears before getting in the middle of that possible chaos.

Forex update 945 EDT

£ powered through its goal of 6382, now wants to try for 6441.

€ managed to get to 4363 and will now try for 4402

Euro short term

4363 will be the first spot aimed at by the bulls, then 4402.

BUT Why € and not $A? With so many breaths being held, caution

End of Week Currency

$A remains bullish; an attack on 1.09 is likely in the offing (attack does not guarantee success).

Euros look bullish, but... There is stacked resistance, the first at 4465.

Pounds Sterling have converted a bear channel into a bullish condition. Expect an attack on 6550

$C saw the USD attack the trend today, but fail to turn things around. Stay bullish on $C

The Kiwi and the Yen are both bullish but --- but they are over-bought. Being overbought doesn't mean they won't go up Monday, and it certainly doesn't mean they won't go up next week. Most likely, both will.

Lazy Summer Day

At least the markets behaved as if it were a lazy summer day. Corn was down sharply but corn was pretty much the only major item that moved much. Wheat, beans, crude, stocks and bonds all spent the day trying to wake up. Forex response to everything was nothing if not muted. Or maybe it was nothing AND muted.

The elephants in the room that the markets chose not to deal with today were the impending US debt limit expansion or technical default on one hand and the wide-spread European debt crisis on the other. What the worlds stock markets need is an invasion from Mars, one that we know we can defeat. All the countries will find a way to get paid as a result of a global war against a common enemy, the world's bourses will rally happily, OPEC will decide it is time to control the price of crude, which they will do by selling short one billion barrels which will break the backs of all the hedge funds. They in turn will have to put to work all their now-unemployed bright boys inventing ways to defeat Mars -- even if it is a hostile take-over of the Martian Stock Market(s). And everybody will live happily ever after. Don't they always?

Forex Position Trade June 20 2011

USD/ChF: Swissies still in an uptrend/USD in a downtrend.

USD/$C:  Neutral with a tendency towards USD headed up.

USD/$A USD still bearish but looks like the USD is trying to at least go sideways

Euro/USD: Euro has formed a top, should be headed down or maybe sideways, though rallying this second

GBP/USD Sterling looks for all the world like it wants to go down, though hasn't started yet

Crude: further to go on the downside

Forex update June 11

The Euro & the Ozzie showed surprising weakness against the USD. The Euro got almost to 1.47 but now seems headed back to 1.40. The Ozzie bulls have made two efforts in two weeks, both unsuccessful. Hard to say whether the bears are in control, but for the moment it looks like 1.0360 will be the next buying zone.

The USD rallied weakly against ChF, went sideways against the $C and against the Yen. The BoJ will be happy if the dollar rallies magnificently, but it is far from obvious that such will be the case. The $C often wanders like a blind mouse against the USD, as it seems to be doing now. The ChF, on the other hand, is very high and looking like it will go higher.

Finally, the Cable or GBP had a small rally, but now looks like it wants to go down to 1.60. A decisive break there could open the door for a move to 1.54

USD, SF, EC, JY

The dollar certainly appears to have reversed, at least for the next few days, against the Euro. The Yen and SF are still in bull markets against the dollar, but that may change soon.

Today's 30yr bond auction and PPI are suggestive of rising interest rates. Yesterday's 10yr bond was not. Tomorrow is the CPI. If the intermediate term future replays the intermediate term past, rising interest rates, if they appear, will push the stock market down and the dollar up. In the short run, the Fed will not act. That may lead to speculative moves in currency that resemble the course of a kite in brisk winds: zoom up, dive quickly, bat sideways, then repeat in whatever order happens.

The Australian & Canadian dollar, the GBP traded against the USD

No, this is not an economics piece on the Star Wars Empire; I have in mind former British Empire currencies. Those are the Ozzie, the Loonie and the Pound Sterling, aka Australian Dollar, Canadian Dollar and British Pound, all as the traded against the USD.

$Aus/$US

First, the Ozzie which has been in rather a straight line rise since mid-March. Thursday and Friday saw sharp selling of the Ozzie, which has been rather over-bought. If you are a position trader and are still long the Ozzie, I trust you have exit orders in place; if not, I suggest you put some in.

The upcoming week should tell us a lot about where the Ozzie is headed. $1.10 is a very high price. It does not, to me, make economic sense. But we are not here to trade economics, but to trade currencies. The choices the market can make are, in descending order of probability: down for days, weeks or months; sideways for weeks; return to rising. I will return to this chart next weekend by which time one might hope for some clarity.

USD/CAD

The Loonie chart needs to be inverted to be like the Ozzie. By that I mean that the Ozzie is the price of one $A in $US while the Loonie is the price of one $US in $C. The net effect has been the same: the dollar has been getting creamed.

This chart looks to me like the USD is more nearly ready for an upward move than is the case for the Ozzie. Again, we should know more this time next week.

Finally, that preserve of the Old Lady of Threadneedle Street, the British Pound. The Pound has been beset by its own problems, including a change of governments in England, bringing a sea-change in fiscal policy. While the Pound has gained 10% or so against the $US, it has not been nearly so pretty nor so quick as the Ozzie has managed. FWIW, the Ozzie picked up about 12% or so over the time the Pound picked up 10%.

GBP/$US

I don't have any trading thoughts about the Pound. Just now, I'm not interested in trading it. In the near past, it hasn't been creating situations that I feel I know how to trade. That brings me to my favorite piece of good advice: When In Doubt, Stay Out!

Day trading the Forex GBP-USD Pair May 2-3

GBP May2 -3

This is my day-trading chart for the Forex pair British Pounds/ USD. Today, there were two opportunities. The large swing came in the Asian - European sessions around 600 GMT.

The important items to notice are (1) prices moved below the prior daily low, the brown line at the top, rallied back to that area and started down. The ovals at this point depict the rally high along with the bull-power line, the green line in the first inset below the chart, falling into the middle of the inset, while bear-power has risen to similar levels. That is bearish. The adjacent rectangle shows prices rallying back to the moving linear regression line while %b, the lower inset, falls. That is also bearish. Sell on a lower low and hold on. There is no reason to hold beyond 1030 GMT: prices have gone above and stayed above the LR line, and they are going firmly sideways.

The next opportunity for profit comes in the US trading session at about 1800 GMT. Prices have moved back under the LR line, bull-power has receded while bear-power has risen, and the %b has drizzled down to mid-chart. Selling the new low works well, though not nearly so well as the first trade.