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Latest Calls

Wed, Sep 12 2007, 21:19 GMT
by Mihai Nichisoiu

Mihai Nichisoiu

In my letter to clients of August 1st - as the USD/CAD was spiking up to 1.0700 (the pair would later surge to nearby 1.0900) - I was writing:

'I'll stick to my idea, graphical representation of the last few days via a USD/CAD daily chart does not look to me as a notable turnaround.

I know the following makes room for a certain bias - still, I wonder whether the USD/CAD is going to experience a '2B bottom' appearance in form of a far more complex inflection stage.'

I have eversince repeatedly highlighted the above, including in my FXstreet.com notes  - like for example on August 21st:

'What happened in the USD/CAD over the last few days partially confirm both my doubts toward considering late July as a remarkable, swiftly-shaped bottom, and my earlier thinking that a '2B bottom' might be developing in the pair.'

The USD/CAD yesterday finally was sold down under the 1.0500 level. It has dropped right under 1.0400 today. As for the '2B bottom' scenario, that remains a possibility - although my attention at all times remains focused on recognizing early signs of already happened change of sentiment, rather than anticipating the technical signals themselves.

On Monday, August 20th - with the GBP/USD ranging for the day between mid 1.98 and 1.99 - I was noting the following in precisely the same letter in which I estimated that a global positive correction would ensue after the August 16th - 17th turmoil:

'I see the GBP/USD having room nowadays to advance to 2.01 - 2.03.'

I reconfirmed that kind of expectation on FXstreet.com only one day later, on August 21st, while reinforcing the anticipation of a relief rally in the global stock markets, the Japanese Yen cross pairs, and the European currencies against the US Dollar.

Yesterday and today, the GBP/USD displayed levels even above 2.03.

The USD/CHF moving nowadays back under the 1.20 - 1.19 'line in the sand' also confirms another personal, few week old guess.

Nevertheless, other recent forecasts have failed.

For example, on July 8th I was perceiving underlying strength in a myriad of American and European stock markets. And although that 'underlying strength' did push the global stock markets higher almost instantly (on July 12th, the Dow Jones Industrial Average noted a 283.86-point gain - the most important in absolute terms since October 2002, and in percentage terms since October 2003), the tops found by the US stock markets almost just as quickly, on July 19th, eventually drove a large number of international stock markets close to a collapse. Surprisingly or not maybe, the single notable exception happened to be the Chinese stock market, on which I have remained bullish for a considerable period of time (the Shanghai Composite Index surged about 20% during the recent global panic, while other Asian stock indices actually lost the same percentage).

My expectations that the price of oil turned downward just after revisiting its last year's highs, as well as that the gold market would commence a negative movement upon a test of $680 - $700, weren't confirmed by recent market action.

Published on  Wed, Sep 12 2007, 21:46 GMT