Forex Trading Strategies

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Quiet in Europe but US the US stock opening could change things
Fri, Aug 10 2007, 10:52 GMT
by Johan Ditz Lemche
Saxo Bank
Not much action in Europe after the big moves seen yesterday and with lack of data and no news from Banks or ECB officials it is likely to continue with US stocks being the joker for a spark in vols
MAJOR HEADLINES – PREVIOUS SESSION
Data Bullets
- SW AMU Unemployment Rate July, out at 3.7% in line with exp.
- NO Retail Sales June, out at 4.7% vs 0.5% exp. YoY out at 11.9% vs 6.7% exp.
- UK Visible Trade Balance June, out at -£6266 vs -£6500 exp.
- CA Housing Starts July, out at 215.6K vs 223.5K exp.
- CA New Housing Price Index June, out at 0.7% vs 0.8% exp.
- US EIA Natural Gas Storage Change Aug 3, out at 42 vs 49 exp.
- JN Domestic CGPI July, out at 0.6% in line with exp. YoY out at 2.1% in line with exp.
- JN Industrial Production June, out at 1.3% vs 1.2% exp. YoY out at 1.1% vs 1.0% exp.
- JN Capacity Utilization June, out at 105.8 vs a prior reading of 105.0.
- JN Bankruptcies (YoY) July, out at 15.6% vs 6.7% exp.
- JN Consumer Confidence July, out at 44.6 vs 46.0 exp.
- JN Consumer Confidence July, out at 44.4 vs 46.0 exp.

THEMES TO WATCH – UPCOMING SESSION
The sub-prime story escalates!!!
Carry trades took another big hit Thursday as risk aversion came back with BNP Paribas announcing that three funds were temporarily suspending and payouts. Also ECB conducted an operation to supply liquidity to the money market. This is the first time it was announced in advance that it intended to allot 100% of the bids that it received for on day funding. The result was an injection of 94.84B with bids from 49 banks. Adding pressure to this fact was Countrywide Financial in the US down 12% in after hours after what it stated to be "unprecedented disruptions". This put more pressure on risky assets and if this is to continue we would expect further unwinding next week which includes commodities as well. But it is a big data week from both the UK and US, so things may change as we get into next week, but more surprise from major banks would certainty take the significance out of any data coming out next week.
From the Technical side
From a technical perspective EURUSD and GBPUSD is close to having the technical picture changed from bullish to bearish. A daily close below 1.3595 in EURUSD would give scope for further downside acceleration and a test of 1.3450-13500 area. Same goes for Cable a daily close below 2.0160 would target the 2.0010-20 area. For carry trades we look for daily close below 118.00 in USDJPY and 159.30 (200 day MA) in EURJPY would technically give scope for a more steep downside correction.
FX Orderbook

Note: the support/resistance levels used in the matrix’s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.

Published on
Fri, Aug 10 2007, 10:52 GMT
Archive
- Gold leads a renewed charge against the dollar in thin Asian markets
Published On Mon, Nov 23 2009, 07:09 GMT
- EURUSD hanging on to support by a thread so far
Published On Fri, Nov 20 2009, 13:53 GMT
- Another session spent in ranges; still awaiting the catalyst to break out
Published On Fri, Nov 20 2009, 07:24 GMT
- USD and JPY having another try at a rally. AUD and NZD lead the charge to the downside vs. the low-yielders
Published On Thu, Nov 19 2009, 15:48 GMT
- The dollar stuck in limbo yesterday
Published On Thu, Nov 19 2009, 07:24 GMT
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Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.