• Home ::
• Technical ::
• Market View

• Send
• Print
• Add To

Daily Analysis Article

This report has been deactivated

Has the pound gotten overextended on this run?

Tue, Aug 4 2009, 18:53 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

After yesterday's bull run to new highs for the year, the pair has taken a well deserved breather in the 1.44 vicinity. The pause in the global equities rally is cited as a reason for the EURO's consolidation, however the market acts like there may be some entity offering ample currency for sale above 1.44. This is not to say the seller(s) will change their mind and their orders but that is how the market acts. Economic reports on both sides of the Atlantic were greeted with yawns. Debate continues on the impact of oil prices and the recovery. Oil prices below $50/ barrel were probably as big a stimulant to economic recovery as the Washington activity, and each day prices are above $70 will prove very harmful. The world had better look for a country other than the US, for the economic recovery leader. It is difficult to calculate how this impacts current markets but the trend is obviously up, so look for a retracement to scalp this market from the long side.

Bias: Higher Bias Term: Medium Support: 1.4320 1.4270 1.41.50 Resistance: 1.4420 1.4500 1.4590

 GBP/USD Commentary and Trade Ideas 

After achieving the 1.70045 level early today, the pound has since retreated to the 1.69 level. UK home prices and sales had in the past several months been cited as a reason for the pound's strength, but this mornings positive US housing sales report has seemingly little impact on the dollar. Has the pound gotten overextended on this run? If so a retreat back to the 1.6750 level might be a place to try the long side. There seems to be war going on between the fundamentalist and the technicians regarding the pound. The IMF and others steeped in fundamentals question the pounds ability to maintain the current level. When donning my technician's hat however, there appears to be some counts that would carry the pound well up into the mid 1.70's. The equity run is the final judge, and for the time being the trend is up.

Bias: Higher Bias Term: Long Support: 1.6830 1.6750 1.6590 Resistance: 1.7000 1.7120 1.7250

USD/JPY Commentary and Trade Ideas 

Today's spurt in global equities has relegated the yen to the bottom of the pill, and even the maligned dollar can gain by comparison. We are currently trading at 95.15 bouncing up from a 94.60 low. Inclined to scalp the long side if the market relaxes a bit, with a target back in the 96 area.

Bias: Higher Bias Term: Medium Support: 95.00 94.40 93.20 Resistance: 95.60 96.20 96.90

 USD/CHF Commentary and Trade Ideas

This pair seems to have found some support under the 1.06 handle and is currently trading a few pips above 1.06. Switzerland's biggest bank, UBS, reported losses for the third quarter in a row. So far there is no sign of SNB intervention, but traders seem cautious selling the dollar much below 1.06, perhaps fear intervention. Prefer the long side on weakness in through here.

Bias: Higher Bias Term: Medium Support: 1.0570 1.0500 1.0420 Resistance: 1.0650 1.0700 1.0850

USD/CAD Commentary and Trade Ideas

Back from the Canadian Bank holiday, we once again have crude oil and equities strength helping the CAD. The relative strength is under 30, a warning sign that this pair will need more good news to fuel the CAD rally versus the USD. Canada is an aggressive developer of oil and natural gas, and as the US's largest energy supplier and benefits immensely from higher energy prices. Though the obvious trend is further USD weakness, the bulk of the move may be behind us. No trading suggestions today.

Bias: Neutral Bias Term: Medium Support: 1.0620 1.0550 1.0450 Resistance: 1.0690 1.0740 1.0850

AUD/USD Commentary and Trade Ideas 

Lower equities gave us a minor pullback in the AUD from yesterday's high or 84.69 to around .8425. It was reported that the index of Australian commodity prices was down from the previous period by 3.5%, indicative of soft export demand. The central bank maintained the bank rate at 3%, but acknowledged the economy is sluggish, and further reduction in the central rate is not precluded. No trading suggestions, but the pair is looking a little pricey.

Bias: Higher Bias Term: Medium Support: .8390 .8330 .8200 Resistance: .8450 .8500 .8590

0

 NZD/USD Commentary and Trade Ideas 

The Kiwi continues to meander sideways, not far beneath the yearly high of .6711. The market is loaded up long the Kiwi and the AUD on the theory that the Chinese economy and it's appetite for commodities will prop up the Australian and New Zealand economies. No current trading suggestions.

Bias: Higher Bias Term: Medium Support: .6625 .6510 .6420 Resistance: .6690 .6750 .6840

Published on  Tue, Aug 4 2009, 18:53 GMT

Eventually the strong stock market and the weak dollar should decouple, but when?

Mon, Aug 3 2009, 18:13 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The absence of any decisively bad economic news, a few positive comments from global pundits and the dollar wilts. Even Alan Greenspan, not content with his semi-retired status and perhaps nostalgic for yesterday's limelight, chirped in that economic growth in the second half of the year would exceed current expectations. After some indecisiveness in the European session the Euro has now made a new yearly high, trading at 1.4331. So far the trade in new high ground seems to have elicited only a few stops. Equities are forecast to be higher today. Eventually the strong stock market and the weak dollar should decouple but when? The ability of this market to remain above the 1.43 level is critical. Failure to do so today, might mean a sell off down to again challenge the 1.40 handle.

Bias: neutral Bias Term: Short Support: 1.4270 1/4220 1.4170 Resistance: 1.4340 1.4400 1.4490

 GBP/USD Commentary and Trade Ideas 

There is no doubt about the strength of the pound as it races into high ground eclipsing the 1.69 handle. A recent Newsweek article which trashed the UK economy and that country's future world status is being dismissed by today's market action. The UK was branded as "Iceland on the Thames," in reference to Iceland's recent bankruptcy, and implied that the UK would soon join them. Reports of a stabilizing British economy, and perhaps some short covering has carried this pair quite a ways in the past few sessions. While the longer charts suggest a trip into the 1.70's is possible, perhaps current levels may be vulnerable to a little sell off.

Bias: Higher Bias Term: Medium Support: 1.6700 1.6590 1.6540 Resistance: 1.6900 1.6990 1.7090

USD/JPY Commentary and Trade Ideas 

Today's spurt in global equities has relegated the yen to the bottom of the pill, and even the maligned dollar can gain by comparison. We are currently trading at 95.15 bouncing up from a 94.60 low. Inclined to scalp the long side if the market relaxes a bit, with a target back in the 96 area.

Bias: Higher Bias Term: Medium Support: 95.00 94.40 93.20 Resistance: 95.60 96.20 96.90

 USD/CHF Commentary and Trade Ideas

  This mornings dollar weakness showed the way for a new yearly low at 1.05628. This is a level where thr SNB has shown some interest in intervention but the franc might be more related to the euro, and that relations is not as strong as with the dollar. Never the less, under 1.06, I prefer to be a buyer of the USD versus the SF.

Bias: Higher Bias Term: Long Support: 1.0570 1.0500 1.0420 Resistance: 1.0650 1.0700 1.0850

USD/CAD Commentary and Trade Ideas

 Despite a Canadian Bank Holiday the CAD continues to make headway against the US dollar. Strong equities and $70+ crude prices are propping up the CAD. Some late morning positive US economic numbers imply the US economic recovery has commenced, so ownership of energies and the CAD makes sense. Higher oil prices, however, will eventually act as a drain on the forthcoming recovery. Try to sell a pull back in the even we climb back to 1.07 and change.

Bias: Lower Bias Term: Medium Support: 1.0620 1.0550 1.0450 Resistance: 1.0690 1.0740 1.0850

AUD/USD Commentary and Trade Ideas 

The orderly climb of the AUD versus the dollar and other currencies continues as the commodity bulls rule. The New York University's Dr Nouriel Roubini, frequently called Dr.Doom was a big hit at a Digger and Dealers Conference in Western Australia as he casts his vote for an economic revival by year end. He did caution that higher oil prices will hurt the global economies later in 2010. No trading suggestions.

Bias: Higher Bias Term: Medium Support: .8390 .8330 .8200 Resistance: .8450 .8500 .8590

NZD/USD Commentary and Trade Ideas 

With the commodity bulls in command, the Kiwi is gradually climbing today. We are trading at .6675 and quietly climbing higher. No trading suggestions.

Bias: Higher Bias Term: Medium Support: .6600 .6510 .6420 Resistance: .6690 .6750 .6950

Published on  Mon, Aug 3 2009, 18:13 GMT

Trade on Monday should prove to be interesting

Fri, Jul 31 2009, 17:03 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The release of the preliminary US GDP estimate proved to be a yawner. The second quarter decline of 1% bettered the guesstimates of -1.4%, but this is like your team losing by only a little. The euro continued the rally during the Asian session, briefly above the resistance at 1.4150, and is currently about 1.4140. My inclination is to look for a place to short this pair between 1.4150 and 1.4200, but I contain myself after looking at the calendar. The number crunchers sometimes takes over the head traders seat on end of the month Fridays, moving out of the markets in an abrupt and graceless fashion. Not always, mind you, but unpleasant memories make me cautious.

It looks like the government's popular (up tp $4500 back) cash for clunkers program, it about to be junked. Coming from this group of Washington spendthrifts, excessive cost to the government is cited as the unlikely reason. More likely President Obama, and his keepers of the Chicago Way, are searching for a way receive, in return, a portion of this government largess. Reinstatement of the program will likely occur if some of these details are remedied. The trade Monday should prove to be interesting. Are we getting ready for an assault on the 1.4300 resistance or the 1.4000 support?

Bias: Lower Bias Term: Medium Support: 1.4080 1.4000 1.3940 Resistance: 1.4170 14220 1.4300

 GBP/USD Commentary and Trade Ideas 

This pair has rallied into the 1.6540 to 1.6570, clearing out stops prior to a 100 point sell off down to 1.6475. Now we are back at the 1.6550 level, and it feels like there is room for further upside. Favorable UK economic numbers and strong equities are keeping the pound firm versus the dollar and the euro. We are perhaps seeing some end of the month book keeping that is elevating volatility today, but the market acts like it wants to break away to the medium price of 1.6450. Stand aside until Monday when perhaps we will have some new inputs.

Bias: Higher Bias Term: Medium Support: 1.6470 1.6390 1.6300 Resistance: 1.6540 1.6590 1.6700

USD/JPY Commentary and Trade Ideas 

Recent stock market strength continues to hurt the yen, as the Japanese desert the safe yen investments for higher yielders elsewhere. In this vein Goldman, this morning, is touting the USD to gain on the yen to perhaps 1.05 by year end. Currently we are trading at 95.25 and though I would prefer to be long, it is probably best to wait until Monday to initiate new trades. The Japanese unemployment at 5.4% is a decade high, and made bode ill fortune in the Aug. 30 election for the party incumbants.

Bias: Higher Bias Term: Medium Support: 95.00 94.40 93.20 Resistance: 95.60 96.20 96.90

 USD/CHF Commentary and Trade Ideas

Currently the CHF has firmed on the USD, falling from an early morning high of 1.0890 to the present trade level of about 1.07. There has been similar strength in the swissie versus the euro. It looks like we have had some end of the month position cleansing. The most recent COT futures report had the specs a massive long and the commercials the offsetting short. Early week strength was probably short covering while today's sell off is likely commercial long liquidation prompted by month end book keeping. Prefer the long side if they take thins back down to the 1.0650 level.

Bias: Higher Bias Term: Medium Support: 1.0740 1.0650 1.0600 Resistance: 1.0850 1.0900 1.1030

USD/CAD Commentary and Trade Ideas

It looks like the slightly worse than expected Canadian GDP at -0.5% gave us some morning weakness in the CAD. After a low of 1.0855 the CAD has since rallied to 1.0778. Modestly higher stocks and crude have given the CAD a boost this morning, and month end position adjustments may have added to the volatility. Still prefer selling the USD versus the CAD.

Bias: Lower Bias Term: Medium Support: 1.0760 1.0700 1.0620 Resistance: 1.0850 1.0900 1.1000

AUD/USD Commentary and Trade Ideas 

The AUD has firmed this morning perhaps in response to higher stocks and commodities. Considering the massive spec long in the AUD a high close will be welcomed in speculators month end statements. No trading suggestions.

Bias: Higher Bias Term: Medium Support: .8210 .8120 .8030 Resistance: .8330 .8390 .8500

NZD/USD Commentary and Trade Ideas 

Strong equities and commodities has helped propel the Kiwi back above .66 today, the final day of July. This commodity currency is well owned by the big specs so they will welcome this month end close. No new trading suggestions..

Bias: Higher Bias Term: Medium Support: .6510 .6420 .6300 Resistance: .6600 .6650 .6700

Published on  Fri, Jul 31 2009, 17:03 GMT

Meaningful crossover in the EUR/USD

Thu, Jul 30 2009, 17:24 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

After toying with the 1.40 level in the Asian and Euro sessions the pair has since recovered and is currently trading a little above 1.4060. There is a mixed variety of economic news this morning which has failed to satisfy either the bull or the bear. In retrospect yesterdays US stock market action was a lot better than expected and opening calls this morning are for better numbers. Current equity strength creates a longer term risk, taking money away from notes and bonds where the US Treasury is having some difficulty peddling record amounts this week. If today's sale of 28B 7 year notes goes poorly, the threat of higher interest may deflate expectations of a quick vigorous economic recovery. Today should be a day when the Euro has a relief rally, after the near 300 pip decent from the high, but the rally so far is feeble. This market probed the 1.43 level several times before turning down so you would think it will try the 1.40 level more than once. Yesterday, on the H4 chart there was a decisive downside cross over of the 40 period SMA by the 18 period SMA. This crossover, not an everyday occurrence, is often meaningful.

Bias: Lower Bias Term: Medium Support: 1.4000 1.3940 1.3870 Resistance: 1.4090 1.4150 1.4220

 GBP/USD Commentary and Trade Ideas 

Traders of the GBP will probably be better off if they do not have anything but a short term conviction. The pair looks real bad on an early morning sell off to 1.6340, but then a report of a 1.3% increase in the selling price of British home turns the market around. We are now a little above 1.65, after printing a high of 1.6526. Fading the extremes when the pair wonders 60 to 90 points either side of the 1.6450 is still working. Today I'm inclined to give the market more room because of better than forecasted strength of US equities, and the possibility of buy stops in the 1.6540 to 70 area.

Bias: Neutral Bias Term: Medium Support: 1.6390 1.6300 1.6240 Resistance: 1.6490 1.6540 1.6590

USD/JPY Commentary and Trade Ideas 

 Once again yesterday's ideal buy spot of 94.50/75 was just wishful thinking and the market took off to the upside without our participation. Currently we are trading at 95.55 and clinging close to the high. Late yesterday it was reported that Japanese retail sales went down for the 10th month in a row 3% under year ago levels, but not sure this should be a big bear input to the yen. Perhaps the record US Treasury auction is part of the dollar strength as the Japanese investors sell yen and buy dollars to participate. We can only speculate but there may be another reason. Remember, the early July sell off of the USD to the yen was partially the result of massive speculative buying of the yen in the futures markets. These trades are now mostly losers, and as month end approaches there is probably some selling of the long yen. Prefer to scalp the long side from the 95.25 level and will see if there is more month end selling of the yen.

Bias: Higher Bias Term: Medium Support: 95.00 94.40 93.20 Resistance: 95.60 96.20 96.90

 USD/CHF Commentary and Trade Ideas

Early week analysis of this pair was a lot easier than now. Then we trading at 1.07, close to where the SNB had threatened intervention. Commercials in the futures market were massive longs and they have been excellent front runners of the SNB, while the specs were loaded up long the franc and short the USD. The subsequent rally above 1.09, has probably corrected some of this imbalance, but is there more to come? It looks like the 1.09 level may provide some resistance, but a retreat down to 1.08 would make reentry on the long side tempting.

Bias: Neutral Bias Term: Medium Support: 1.0800 1.0740 1.0650 Resistance: 1.0900 1.0940 1.1030

USD/CAD Commentary and Trade Ideas

With the Dow up well over 100 points and crude recovering a couple bucks a barrel, it is no surprise the CAD is coming back versus the dollar. Currently we are trading at 1.0825 after briefly trading on the high side of 1.09. It now looks like the recent sell off in the CAD was merely a correction and not a trend reversal. Records are made to be broken, so maybe we are headed for the 1.05 level. Eventually poor demand for the refined oil products such as those used in commercial transportation, will take their toll on crude, possibly to the $50/ barrel level. For the moment, however, the commodity spec appears to still be getting in. When new buyers fail to show or the existing longs get tired, there will be a different story and likely a different CAD. For the moment it is best to go with the flow.

Bias: Lower Bias Term: Medium Support: 1.0800 1.0700 1.0620 Resistance: 1.0850 1.0900 1.1050

AUD/USD Commentary and Trade Ideas 

The commodity and equity turn around today has helped the turn around in the AUD. After the high of 83.37, and the sell off to .8125 we have returned to 82.26. The longer trend is still to the upside but the bull story is old and the market is loaded with longs. No trading suggestions.

Bias: Higher Bias Term: Medium Support: .8210 .8120 .8030 Resistance: .8260 .8390 .8500

NZD/USD Commentary and Trade Ideas 

The Kiwi has bounced off the bottom, but compared to the AUD, the recovery is flat. Perhaps the central banks comments that they may reduce the current interest rate from 2.5% if economic conditions do not improve. No trading suggestions.

Bias: Neutral Bias Term: Medium Support: .6510 .6420 .6300 Resistance: .6600 .6650 .6700

Published on  Thu, Jul 30 2009, 17:24 GMT

It seems to be human nature to do the wrong thing with money when we have too much of it

Wed, Jul 29 2009, 18:17 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

This mornings dollar strength, partially attributed to weakness in Chinese stocks, comes at an awkward time for speculators recently engorged with long Euro positions. Yesterday's failure to spend any time above the 1.43 level was a warning. Currently we are trading in the 1.41 area where there is some support. Excess Chinese liquidity causing a speculative bubble, is given as the reason for the curtailment of lending by Chinese banks. It seems to be human nature to do the wrong thing with money when we have too much of it. While the US also has loosened the money supply, we have a Treasury note auctions to sop up the idle dollars. Yesterday they sold a record 42B 2 year notes, today 39B 5 year notes to be followed by 28B 7 year notes tomorrow.

This morning's US estimate of durable goods orders came in worse than the estimate at a negative 2.5%, and may tilt US equities to the downside. If the red numbers for the US equities get too big today and the Dow shows signs of staying under 9000, where will that take the Euro? It looks like too many people are betting on the immediate demise of the dollar. Try scalping the short side. A return to the 1.4150/1.4200 area would seem like an ideal spot, but that may not happen.

Bias: Lower Bias Term: Medium Support: 1.4060 1.3980 1.3900 Resistance: 1.4150 1.4220 1.4280

 GBP/USD Commentary and Trade Ideas 

An overnight sale in the pound took us down to the 1.6350, but we have since rallied back to the 1.6450 level. A UK report of net lending to individuals was a record low. Does this mean that banks are unwilling lenders, or are individuals fearful of their economic future, unwilling to borrow? In the Euro session the FTSE ignored the Asian weakness and stayed firm. With US equities only modestly lower in the early go, we are again lacking direction. It looks like the market remains a fade when it strays 75 or so points either side of 1.6450.

Bias: Neutral Bias Term: Medium Support: 1.6390 1.6300 1.6240 Resistance: 1.6470 1.6540 1.6590

USD/JPY Commentary and Trade Ideas 

Our buy ideas yesterday at 93.90 were too conservative as the low was just a little above 94 prior to the rally back to 95. There is no doubt that the performance of Chinese stocks, perhaps deflating some of the commodity currencies, has been helpful to the yen, but why is the yen losing to the USD. Japanese Euro bonds which mature tomorrow, are also given as a reason for yen strength, so again why is the dollar gaining on the yen. Perhaps the US Treasury auction is part of the mix, but we are approaching month end and the speculators now have a massive long yen position. In the event they blow some of these positions the dollar could rally up to the 97 handle prior to month end. Try to scalp the long side with a 94.50/.75 entry level but watch closely. There are some big players in this market and their entry and exit might not be very graceful.

Bias: Higher Bias Term: Medium Support: 94.40 93.20 92.50 Resistance: 94.90 95.30 95.70

 USD/CHF Commentary and Trade Ideas

It looks like some of the speculators who were long the franc and short the dollar are getting run in prior to month end. Currently we are trading at 1.0890, 200 points higher than the beginning of the week. Last week's COT report exposed the massive spec short futures position and I would guess that some have been buying their way out of the market. If the market retraces to about 1.0840, try the long side and see if the rally can continue to 1.10.

Bias: Higher Bias Term: Medium Support: 1.0800 1.0740 1.0650 Resistance: 1.0890 1.0940 1.1030

USD/CAD Commentary and Trade Ideas

The sharp 5% sell off in the Chinese equities markets and caution that the Chinese banks are going to stop stimulating, has taken a toll on commodities this morning. Crude is down over 3.50/barrel and all commodity numbers are currently red. Another story is that speculators, who played a big role in last year's run to $147 a barrel, may be headed to some position limits imposed by either the CFTC or the appropriate exchanges. The CAD is currently trading at 1.09 down from this morning's high of 1.0933. If the party is over for the CAD bulls then you can try to buy the dollar versus the CAD at 1.0850 area. Keep the stop fairly tight because the jury is still out trying to determine if this trend has changed.

Bias: Higher Bias Term: Medium Support: 1.0850 1.0800 1.0700 Resistance: 1.0900 1.0950 1.1050

AUD/USD Commentary and Trade Ideas 

Perhaps the .8337 high earlier in the week will be in place for a while as the pair has sold off into the support of .8150. The cheer leading by Australian Bank Governor Stevens has been negated by the Chinese bankers who are going to stop making loans. As we have pointed out for quite a while, a command economy can order immediate production increases, but finding of buyers for the products is a lot more difficult. Not sure how to approach this market. The spec is a big long and the commercial a big short. Who will the first to exit?

Bias: Neutral Bias Term: Medium Support: .8170 .8120 .8020 Resistance: .8260 .8390 .8500

NZD/USD Commentary and Trade Ideas 

 This week's high of .6633 has given way to a retracement to the current level of .6658. It remains to be seen if some of the commodity currency bulls will head to the exits. No trading suggestions.

Bias: Neutral Bias Term: Medium Support: .6550 .6510 .6420 Resistance: .6600 .6650 .6700

Published on  Wed, Jul 29 2009, 18:17 GMT

Is the market trend less?

Tue, Jul 28 2009, 17:10 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Once again the Euro checks out the 1.43 level and is unable able to hold. We have since backed off and are currently trading at 1.4210. Maybe the absence of buy stops above 1.43 is because the speculator is already a massive long. Certainly last week's COT confirmed the spec is long, and in the last period bought 24,817 contracts. If we take out some sacred support levels on the way downside volatility will confirm the abundance of spec longs. The US/Chinese meetings continue, as the Chinese, mindful of their 801.5B US Treasury investments, continue to express their "concerns" about US economic policies. In the short term, the Chinese have few options. A weaker dollar would strengthen the yuan from the current 6.83 rate and impair the Chinese efforts to expand exports. Sec. Geithner has glibly assured the Chinese bankers that the US deficit, currently at about 12% of the GDP, will be reduced in the future. Geithner failed to disclose the measures that would reduce the deficit, but since the current Washington crowd only knows tax and spend, we can assume more of the former. Meanwhile the market did hit a hole and sold off under 1.42. Nimble traders can try scalping the short side on a modest rally with appropriate stops. A popular run spot for the spec longs is 1.4150 so the big commercials and banks, who are short may gun for this area.

Bias: Lower Bias Term: Medium Support: 1.4150 1.4060 1.3980 Resistance: 1.4220 1.4280 1.4350

 GBP/USD Commentary and Trade Ideas 

Last nights euphoria for the pound taking it to a lofty 1.6556 faded in the gray light of the US east coast dawn, and we have faded to 1.6450. The UK CBI sales report was mildly disappointing at -15 compared to an estimated -12. The US consumer confidence comes in a little worse than expected. At the moment this pair does not stray too far from the 1.6450 level. They say the "trend is your friend", but what do you do when the market is trend less? Maybe just fade the pair when it gets to far from the right price...1.6450.

Bias: Neutral Bias Term: Medium Support: 1.6390 1.6300 1. 6240 Resistance: 1.6540 1.6590 1.6700

USD/JPY Commentary and Trade Ideas 

The 95.30 level contained the dollar's advance on the yen and the market has since retreated to 94.55. At 93.90 we wish to try the buy side of this pair. The US Treasury auction this week will include 39B 5 year and 28B 7 year notes, maturities that may be of interest to the Japanese. Some experts claim the pause in the equities rally has helped the yen this week. The big build up in yen futures earlier this money was caused by spec buying and commercial selling/ Will either group want to exit the market prior to month end? Traders must remain alert, because month end volatility may increase.

Bias: Higher Bias Term: Medium Support: 94.40 93.20 92.50 Resistance: 94.90 95.30 95.70

 USD/CHF Commentary and Trade Ideas

 Once the SF gets under 1.07, it looks like the pair finds some friends. In the futures market it looks like the friend is the commercial. As of the last report commercials were short 26,617 contracts and long only 3.438 contracts. Commercials have had a good track record of front running intervention by the SNB. The pair has advanced this am to over 1.07, but in the event the market settles back, try to buy the dollar versus the franc at 1.0670, and risk 100 points. Perhaps the pair is due for a rally back to the 1.09 area.

Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0740 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

Lower crude and equities has resulted in a lower CAD this morning. Currently we are trading at 1.0896, and getting close to the 1.09/1.0950 where we might consider buying the pair. The new low this morning, a fraction under 1.0750, with the subsequent rally to the current area hints that this may be a key reversal kinda day. Inclined to back off and watch for a while, but may buy strength if the pair shows signs it is not a reversal day.

Bias: Lower Bias Term: Medium Support: 1.0800 1.0700 1.0610 Resistance: 1.0900 1.0950 1.1050

AUD/USD Commentary and Trade Ideas 

Royal Bank of Australia Govenor Stevens' positive comments about the Aussie economy boosted the AUD into a new high for the year versus the USD. The market's tepid behavior once the new high was achieved is probably attributable to the absence of spec shorts in the AUD. Selling new highs is generally unprofitable, so I guess it is best to take a pass in this pair.

Bias: Neutral Bias Term: Medium Support: .8190 .8140 8020 Resistance: .8290 8390 .8500

NZD/USD Commentary and Trade Ideas 

Bolstered by the optimistic economic comments from the Royal Australian Bank, the Kiwi again rallied to as new high only to fail again. After printing a new high of .6633, we are now trading at .6577. It was announced that the the NZ trade balance went negative to -417M million in the latest period, down from a positive 214M in the previous period. It looks like selling new highs in this currency makes money, but this is not in my style. No trades for now.

Bias: Higher Bias Term: Medium Support: .6550 .6510 .6420 Resistance: .6600 .6650 .6700

Published on  Tue, Jul 28 2009, 17:10 GMT

EUR/USD going to 1.4500?

Mon, Jul 27 2009, 16:50 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The Chinese commence two days of meetings with young Tim Geithner, where he will smooze with and try to convince the Chinese that the US dollar remains as, well, as good as the dollar. In London, however, one banker suggests that the USD will not recover until the US economy does, and Goldman says the Greenback is headed to 1.45. I'm not aware either of these parties disclosed their positions, but it sure sound like they are short the dollar. In the latest COT futures report the total open interest was up a huge 18% as speculators bought 24817 contracts from the commercials. Commercials are now 2.8 to one long. This morning, once again, the 1.4300 was assaulted without success, and the pair has since pulled back to 1.4258. It looks like the whole speculative world knows and is prepared for the pending move above 1.43 to 1.45. Rarely is it that easy.


Bias: Higher Bias Term: Long Support: 1.4239 1.4160 1.4060 Resistance: 1.4280 1.4350 1.4490

 GBP/USD Commentary and Trade Ideas 

This pair continues the sideways meandering apparently lacking the reasons to break out of this pattern. A report this morning said that home values in the UK had stabilized while in the US home sales increased somewhat. Perhaps there is a trade in this pair but at the moment, I could only guess what it is, so it is beast to stand aside.

Bias: Neutral Bias Term: Medium Support: 1.6390 1.6300 1.6240 Resistance: 1.6540 1.6590 1.6700

USD/JPY Commentary and Trade Ideas 

This morning we are again chewing into the resistance at around 95.30. Equities continue to be more appealing to the investors than the low risk and yield assets in Japan. This week there is a big 115B dollar US auction of notes, which normally appeals to the Japanese. Will they be selling yen to buy dollars this week? The early week auction of TIPS and 2 year notes may bore the investors, and if equities falter we may have a chance the dollar versus the yen cheaper. Try to buy this pair on a sell off to 93.90, risking 110 points. We will see if better things are in store for this pair later this week.

Bias: Higher Bias Term: Medium Support: 94.40 93.20 92.50 Resistance: 95.30 95.70 96.40

 USD/CHF Commentary and Trade Ideas

 Once the SF gets under 1.07, it looks like the pair finds some friends. In the futures market it looks like the friend is the commercial. As of the last report commercials were short 26,617 contracts and long only 3.438 contracts. Commercials have had a good track record of front running intervention by the SNB. The pair has advanced this am to over 1.07, but in the event the market settles back, try to buy the dollar versus the franc at 1.0670, and risk 100 points. Perhaps the pair is due for a rally back to the 1.09 area.

Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0740 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

Even without the help of higher equities or crude this morning the CAD remains firm versus the USD, and is currently trading at 1.0822. This move has been very orderly, but some of the oscillators suggest the market may be over bought and should settle back. Without a break in crude, it is hard to see much retreat within the current bull run. Try to buy a little sell off into the 1.09/10950 level with at stop at 1.1075. Perhaps a new high in the Canadian dollar can take us down to the 1.06 area.

Bias: Lower Bias Term: Medium Support: 1.0800 1.0700 1.0610 Resistance: 1.0860 1.0950 1.1050

AUD/USD Commentary and Trade Ideas 

General all purpose optimism has enabled the AUD to surge a little above the two previous highs back in early June. Years ago an old technician told me double tops often hold, but not a triple top, so that implies more upside. So far the currency has performed well anticipating the recession's end, but when will the be the day we see some results of the recession ending theory? Could the new home sales later in the day be enough to move us higher? Stand aside until we see how the news breaks and the market reacts.

Bias: Higher Bias Term: Long Support: .8190 .8140 .8020 Resistance: .8230 .8300 .8390

NZD/USD Commentary and Trade Ideas 

Despite printing a new Friday high and positive comments about economic recovery, the Kiwi trade lacks enthusiasm and has currently backed off to .6560. No trading suggestions at this time.

Bias: Neutral Bias Term: Medium Support: .6550 .6510 .6420 Resistance: .6600 .6650 .6700

Published on  Mon, Jul 27 2009, 16:50 GMT

What is next?

Fri, Jul 24 2009, 18:27 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Yesterday's inability of the EURO to forge ahead, boosted by the tail wind of sharply higher equities is concern for the bulls. In the US session the pair did punch through for a new high for the move, and elicited stops. After the new swing high of 1.4290, some one must have played that old Peggy Lee song "Is That All There Is?" With the assistance of a couple bad US earnings numbers, the pair then ran down to 1.4119. In the European session, some better than expected numbers economic numbers were announced setting the stage for today's 125 point rally. Currently trading at 1.4237 what is next? Significant US economic news is sparse but there was a report that total US fuel demand was down 4.8% from a year ago when prices were at record highs. The continuing discount of heating oil to unleaded gas at a time of the year when demand for the latter should be expanding, suggests a muted US economic recovery. Weak demand for the heating and diesel oil implies reduced commercial activity by ground and air transportation. My preference is to be a buyer of the euro in the 1.4170/1.4200 area but I am puzzled about the impact of a lethargic US economy.

Bias: Neutral Bias Term: Medium Support: 1.4160 1.4060 1.3980 Resistance: 1.4240 1.4350 1.4490

 GBP/USD Commentary and Trade Ideas 

 

The preliminary GDP for the UK came in much worse than expected at - 0.8, and down 5.6% from year ago numbers and negates some of the B of E's optimism.. Yesterday's high of 1.6586 was just shy of our 1.6590 sell order. We are currently trading at 1.6439. US equities are mixed to easier this morning, and probably a drag on the pound. The univ. of Michigan Consumer Sentiment released this morning was 66.0 down for the first time in 5 months. Prefer to wait until Monday to initiate a new trade but would be tempted to sell this pair if given the opportunity around 1.6525.

Bias: Lower Bias Term: Medium Support: 1.6390 1.6300 1.6240 Resistance: 1.6540 1.6590 1.6700

USD/JPY Commentary and Trade Ideas 

Yesterday's rally of the USD versus the yen encountered resistance in the 95.30 area and has since sold off to 94.71. We still favor the long side and for those of you who pealed out of longs yesterday above 95, we suggest reinstatement of longs in the area of 94.20/30. To help pay for their record deficit, the US Gov will have a record one week auction of 115B dollars of various issues. Japan has the second largest inventory of US Treasuries and will likely participate as a buyer in this auction.

Bias: Higher Bias Term: Medium Support: 94.40 93.20 92.50 Resistance: 95.10 95.70 96.40

 USD/CHF Commentary and Trade Ideas

 The Swiss franc lost ground to both the Euro and the USD during the past day. Rumors of bad loans buy the Swiss banks may have been responsible for some of the franc weakness. It has been our preference to own the pair in the 1.06/1.0650 level but we are trading at 1.0715 Conservative traders should take the week end off and see what the week end brings.

Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0740 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

Equities are pausing today and the CAD, which has been on a terror versus the USD, is doing the same. The pair made a low today at 1.07936 about the same as the previous low in late May. The current 14 day RSI is under 30, a level that generally shows the move has gone too far. Crude oil remains at 67 but US fuel consumption in the latest 4 week period was down 4.6% compared to year ago numbers. The Canadian economy benefits from something the US lacks, an energy policy that increases the supply and generates foreign exchange. At the moment, however, the Loonie looks a little pricey and we prefer to wait for a sell off to buy.

Bias: Higher Bias Term: MediumX Support: 1.0820 1.0700 1.0610 Resistance: 1.0860 1.0950 1.1050

AUD/USD Commentary and Trade Ideas 

Despite some lower equities, the AUD is hanging in there at .8167. The longs feel this currency is going to benefit from the imminent revival of the Chinese economy, and because of their amply natural resources, the AUD will stay strong. It is reported the Chinese government is divesting themselves of their ample dollar reserves by buying natural resources. The trend remains higher but this is an old story.

Bias: Higher Bias Term: Long Support: .8140 .8090 .8010 Resistance: .8220 .8300 .8390

NZD/USD Commentary and Trade Ideas 

After printing a new high by a point or two the Kiwi backed off down to .6515, but has since recovered to .6570. Longer term charts show the uptrend to be intact, but we wonder how much of the pending economic recovery is already priced in the market.

Bias: Neutral Bias Term: Medium Support: .6550 .6510 .6420 Resistance: >.6600 .6650 .6700

Published on  Fri, Jul 24 2009, 18:27 GMT

Looks like some inflacion is feared in the UK

Thu, Jul 23 2009, 17:01 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The EUR spent most of the European session trading above the 1.42 handle but unable to mount much of an assault to the higher levels. Global equities were a little higher, and US equities are trying to digest this mornings unemployment claims report. New applications for unemployment benefits jumped by 30,000 to 554,000 with indications last week's lower number was a fluke. The Labor Dept numbers indicate that 6.5 million jobs have been lost since the recession began in 2007. It remains to be seen if the markets will shrug this report off as old news and continue to assume better economic news and profits lie ahead. Certainly there is some investment cash, idled by fear, but recent market strength makes some of these managers now fearful they will be left behind, and will end up as equitiy buyers. Currently we are trading a little above 1.42. Scalp from the long side on weakness under 1.42 but be prepare to hit the exit door on an hourly close below 1.4150.

Bias: Higher Bias Term: Medium Support: 1.4160 1.4060 1.3980 Resistance: 1.4240 1.4350 1.4490

 GBP/USD Commentary and Trade Ideas 

This mornings retail sales report of a 1.2% improvement, better than the expected 0.4%, and the highest number of mortgage approvals in 15 months, caused the pound to rally up into the 1.6540 resistance level. Our preference has been to sell the pound on a rally which we now have. The news today is constructive and the market acts like it may be able to search for stops above 1.6550. Try to sell a swing up to 1.6590 with a 100 point risk. UK banks are offering, as agents of the government, 33 year inflation protected bonds. Reception has been strong as buyers acquired 5B pounds, far more than the anticipated sales of 2B pound. It looks like some inflation is feared on the other side of the Atlantic too.

Bias: Higher Bias Term: Short Support: 1.6460 1.6390 1.6300 Resistance: 1.6540 1.6590 1.6700

USD/JPY Commentary and Trade Ideas 

The US equities sizzle, taking the USD higher versus the yen. We are long from 93.30 and approaching our target of 95. Either liquidate at that price of move stop up to 94.40, and see if the USD can rally some more. Remember there are massive spec shorts in the yen so if they choose to exit on strength there can be some more in this move. It was announced yesterday that Japanese financial companies were offering 7.42 billion dollars of trusts to be invested in international assets which results in selling the yen. Goldman also had a trade recommendation to do a yen/rupiah carry trade that would produce a 7% yearly yield. Those reports helped move the usd higher on the yen in the Asian session.

Bias: Higher Bias Term: Medium Support: 94.40 93.20 92.50 Resistance: 95.10 95.70 96.40

 USD/CHF Commentary and Trade Ideas

Once again the low 1.06 area proved to be support, and the market did spike up to a brief visit to 1.0742. The EURCHF also had a 100 pip rally/ This pair has now sold off to the 1.0660 area. The Swiss franc acts like the rally may have been caused by the threat of intervention by the SNB Still favor trying to buy the SF in the 1.06 area.

Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0730 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

 

With equities sharply higher and the crude oil market firm the CAD is quite firm this morning. We are currently trading at 1.0870 about 30 higher than this morning's low. The daily RSI has dipped under 30, indicating the extreme momentum of the break in the USD versus the Canadian. While the trend is obviously down, we may be over extended and it is probably best to watch this pair for a future opportunity.


Bias: Lower Bias Term: Medium Support: 1.0860 1.0820 1.0700 Resistance: 1.0950 1.1050 1.1150

AUD/USD Commentary and Trade Ideas 

As the global equities rally this morning continues this morning, the AUD is firm currently trading at .8197. It is rumored some of the Japanese carry money is being directed to Australia. We have been at the price before, and the market has stalled. It remains to be see if there will be follow through this time. Stand aside and see what happens.

Bias: Higher Bias Term: Medium Support: .8140 .8220 .8300 Resistance: .8220 .8300 .8390

NZD/USD Commentary and Trade Ideas 

The equities rally is again aiding the Kiwi this morning. Currently we are trading at .6614, a level we have visited several times. There does not seem to be a lot of excitement despite the new highs. Stand aside.

Bias: Higher Bias Term: Medium Support: .6580 .6510 .6420 Resistance: .6650 .6700 .6770

Published on  Thu, Jul 23 2009, 17:01 GMT

Would a rally on the DOW to 9000 take the Euro above 1.4338?

Wed, Jul 22 2009, 17:35 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

 
As global equities have a modest set back, so does the Euro. Currently we are trading at 1.4180, near the bottom of this week's trade. The Bernanke testimony continues today, probably with fewer listeners, as he continues to assure things are under control, and the economic contraction has stabilized. With billions of stimulus funds, and a very large, but unknown, amount of TARP money showering to this administration's most favorite, you would expect there has been a little extra money to stir up some economic activity. Looking forward though, the view is a little opaque, as Bernanke acknowledges that collapsing real estate values and high unemployment are big obstacles to a quick recovery.

From the quarterly earnings statement, it looks like all banks did not recovery equally, as Morgan Stanley and Well Fargo results were short of expectations. The logic that stagnet US economic growth will cause equities to relax, thereby strengthening the dollar eludes me. Never the less that is the music the market is dancing to, so it is best to try to stay in step. Currently US stocks are lower, but would a rally on the DOW to 9000 take the Euro above the recent high of 1.4338? My inclination is to use short term weakness to buy the Euro, and see if one more wave of bullish equities can take us to higher ground.

Bias: Lower Bias Term: Short Support: 1.4160 1.4060 1.3980 Resistance: 1.4240 1.4350 1.4490

 GBP/USD Commentary and Trade Ideas 

 

The UK Telegraph reported that Barclay's and the RBS will need to secure an additional 20B pounds to be in compliance with new regulations. That prompted a sell off down to almost 1.63 when B of E meeting notes revealed a unanimous decision to oppose any additional quantitative easing. The subsequent rally to 1.6450 added a little excitement. The bulls are putting up a good fight but yesterday's report that the UK debt of 799B pounds is 56.6% of the GDP and the biggest, is a heavy load. Favor scalping from the short side on rallies, but the bulls seccessful defense of the 1.63 barrier may take the market back up a little more, so it is best to give the market some room.

Bias: Lower Bias Term: Medium Support: 1.6300 1.6190 1.6100 Resistance: 1.6460 1.6520 1.6590

USD/JPY Commentary and Trade Ideas 

Our buy at 93.30 was filled and we remain long after taking a little heat when the pair sold off down to 93.10. There was a mild sell off equities over night, but to far the US stock market is trend less. Very heavy speculative yen buying of the futures market during the past two weeks has weaken the dollar versus the yen, however the commercials faded the spec buying. We continue to wonder if some of the big spec buying of the yen is a hedge against a stock market long, but it is hard to keep track of others positions. Currently we are trading at 93.70 and a rally back to 95 seems possible unless the market encounters another wave of yen buying.

Bias: Higher Bias Term: Medium Support: 93.20 92.50 91.70 Resistance: 94.40 95.70 96.40

 USD/CHF Commentary and Trade Ideas

This pair continues to meander sideways in a featureless trade. The long side is preferred in the low 1.06 area which might be low enough to entice the SNB to intervene again.

Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0730 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

 

The Loonie was given a morning boost by a retail sales report that showed a better than expected 0.7% monthly increase. Currently we are trading at 1.0990, and are approaching the yearly high of 1.0784. Though equities have stalled, crude remains in the mid 60's. Prefer to be short the USD versus the CAD, but not sure the risk/reward is appropriate at current levels.

Bias: Lower Bias Term: Long Support: 1.0940 1.0820 1.0700 Resistance: 1.1050 1.1150 1.1220

AUD/USD Commentary and Trade Ideas 

The Asian session equity weakness gave the AUD a minor sell off down a touch under .81 prior to a rally back to .8160. The recession will quickly disappear crowd is firmly entrenched on the long side of this pair. Once again we are flirting with yearly high, but this is an old story. Prefer to stand aside and see how market behaves.

Bias: Neutral Bias Term: Medium Support: .8140 8220 .8300 Resistance: .8220 .8300 .8390

NZD/USD Commentary and Trade Ideas 

This pair is again easing into to new high ground, as the world assumes that the recessions is about to end and we are the cusp of recovery. No trading suggestions

Bias: Higher Bias Term: Medium Support: .6570 .6510 .6420 Resistance: 6650 .6700 .6770

Published on  Wed, Jul 22 2009, 17:35 GMT

The original problem continues

Tue, Jul 21 2009, 17:24 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

 
The European market teased the bears with a modest sell off under 1.42, prior to reversing and running stops to move up a little above 1.4270. US stocks are again higher with mostly better earnings cited as the reason. The trade anxiously awaits the Fed. Chairman's pontification about the current and anticipated economic situation, including projections of how and when the excess liquidity will be drained from the banking system. Regarding the monetary expansion, how much of these funds went to pay for losses from the speculative real estate bubble that recently burst? How much of the liquidity bought treasury bills, notes and bonds to finance the current deficit, and finally how much is currently being redirected into equities? No doubt some of the beneficiaries and recipients of this liquidity are giddy, but the original problem, the collapse of real estate values continues. Home foreclosures are expanding, dragging down values, and even putting conventional mortgage holders at risk. Government plans to assist have not succeeded. Last week's increase in new home construction was in large part a response to a new government program that gives up to a $8000 tax credit for first time buyers of new construction homes. This misguided program will only lead to additional inventory that competes with the glut of resales.

With this pair so close to the 1.4300 swing high printed in late May, it seems the bulls should be able to muster enough energy to run the stops and see what is there. This may be a day for the quick and nimble.

Bias: Higher Bias Term: Medium Support: 1.4160 1.4060 1.3980 Resistance: 1.4280 1.4350 1.4490

 GBP/USD Commentary and Trade Ideas 

 

Comments by Bernanke in a WSJ op-ed article were cited as a reason for the pound's sell off in the European session. After retreating to 1.6384, it has since recovered to 1.6455. This morning the UK public deficit was announced at 13B for the latest month. Though not as bad as the forecast level of 15.7 billion pounds, it is still the worst for this month on record. Comments by Bernanke's today will keep traders attention, and perhaps give us a few more 100 pip moves. My preference remains the short side on rallies back above 1.65

Bias: Lower Bias Term: Medium Support: 1.6410 1.6280 1.6190 Resistance: 1.6520 1.6590 1.6640

USD/JPY Commentary and Trade Ideas 

Our sell ideas yesterday were too conservative so regretfully the market went down without us. Currently we are trading at 93.64 after yesterdays high of 94.78. The open interest in the futures market alerts us that there is a massive speculative long interest in the yen. The large quick loses of the dollar to the yen may be indicative
of speculative posturing, trying to assist the position. There should be a little support around 93.30 where traders can probable nibble at the long side of the USDJPY if there are signs the big money sellers are resting.

Bias: Neutral Bias Term: Medium Support: 93.20 92.50 91.70 Resistance: 94.40 95.70 96.40

 USD/CHF Commentary and Trade Ideas

The Swissy has sold off into the level that we are trying the long side of the dollar versus the franc. A positive trade balance of 1.56 was reported in the last period, down from the previous surplus of 1.87B. We are hoping the modest strength of the SF may taunt the SNB in some intervention. The EURCHF, currently trading at 1.5160, may be of more importance to the central bankers.

Bias: Higher Bias Term: MediumX Support: 1.0650 1.0600 1.0500 Resistance: 1.0730 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

The Bank of Canada decision to keep the overnight rate unchanged was expected, but did propel the CAD to a new high at 1.09639. Despite higher crude oil prices and stocks today the CAD is now selling off and trading at 1.10475. The appreciation of the CAD during the past 10 days has been impressive and a retrace at any time should be expected. A sell off to the 1.1250 area would seem like an ideal buy spot, but this pair rarely lets you aboard at the right price. Look to buy a good dip as there may be more to this move than meets the eye.

Bias: Higher Bias Term: Short Support: 1.1020 1.0940 1.0820 Resistance: 1.1090 1.1220 1.1300

AUD/USD Commentary and Trade Ideas 

 

This pair again traded in the elevated area close to .82 but has since sold off modestly to .8120. Reassurance from Ben Bernanke that he has things under control, combined with the failure of stocks to hold the early morning gains may have caused the AUD to retreat from the highs. With the Australian central bank a likely seller on rallies, I am inclined to fade the crowd and sell this pair above .81

Bias: Lower Bias Term: Medium Support: .7970 .7850 .7670 Resistance: .8160 .8220 .8300

NZD/USD Commentary and Trade Ideas 

 

After a trip into new high ground at 66.06, this pair has sold off modestly to .6537. Failure to carry through on the upside means we are probably due for a sell off. Markets that cannot go up....go down. I am not real interested in trading this small market, but I would rather sell than buy the Kiwi.

Bias: Lower Bias Term: Medium Support: .6510 .6420 .6300 Resistance: .6560 .6700 .6770

Published on  Tue, Jul 21 2009, 17:24 GMT

Timid start of the week

Mon, Jul 20 2009, 19:42 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Friday's worries receded as the CITI Group found a bridge load to avoid bankruptcy, sending timid investors back to the buy side of equities. The MCI World Index was up a respectable 0.9% overnight. The EUR took out last week's high, triggering stops, and is currently trading at 1.4232. The June 3rd high of 1.4338 is the next challenge for the bulls. The German PPI was anounced this morning and came in at -0.1 percent versus a forecast of +0.5%. and down 4.6% on the year. This shows a lack of pricing power by German products. The strengthened Euro will make the resumption of German exports more difficult, but for the moment this is of no concern for the Euro buyers. Since the trend is obviously higher, scalpers can try the long side of dips, however a trade under 1.4150 might change the trend.

Bias: Higher Bias Term: Medium Support: 1.4150 1.4060 1.3980 Resistance: 1.4260 1.4350 1.4490

 GBP/USD Commentary and Trade Ideas 

 

After a modest retreat from the high last week, the pound started higher today trading up to 1.6550, but has since sold off to 1.6490. There is not a lot of news to propel the pound higher. It was reported the asking price of UK homes increased by 0.6% last month. Another report said the UK money supply contracted 0.2% last month, but neither are market movers. Perhaps a clue to the strength of the pound can be found in a line from and old Roger Miller song, "England swings like a pendulum do." Living conditions and opportunities in London are much more appealing than most Mid East cities, so the money flows into the UK. So far the pound has shrugged off last week's IMF report that expressed concern about the UK's debt burden. Maybe VP Joe Biden's advise, who says we have to keep spending to avoid bankruptcy, has crossed the Atlantic. The market acts like the Monday morning strength should be sold with a tight stop but I am not quite sure where to get involved.

Bias: Lower Bias Term: Medium Support: 1.6410 1.6280 1.6190 Resistance: 1.6520 1.6590 1.6640

USD/JPY Commentary and Trade Ideas 

The futures COT report from the latest period reveals speculators continued to be massive buyers of the yen again last week. The recent run up in the dollar versus the yen during the past 7 days has hurt the spec positions. Could the long yen position be a hedge against a long equity position. Any sharp contraction in equity valuations would sent the yen higher as traders would move away from risk. The pair has moved back up after trading briefly under the 92 handle. There will come a point where this rally stalls, so let's try to sell this pair if it trades at 95.30 with a 100 point stop. The target for the trade would be a sell off down into the 93 area.

Bias: Higher Bias Term: Medium Support: 94.20 93.20 92.50 Resistance: 94.80 95.70 96.40

 USD/CHF Commentary and Trade Ideas

This pair took out the old resistance at 1.07 and after trading as low as 1.0650 is nor at 1.0690. It is always questionable where strength in the franc will attract the attention of the SNB. The low on June 24, the day the SNB aggressively sold the franc and bought EUROS and Dollars was 1.0647. Will history repeat? Try the long side of the USD franc in the 1,0650 area with appropriate money management stop and see if we get a bounce.

Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0730 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

A report this morning shwed that 18.89 Billion CAD's was invest in Canadian Equities in the latest reporting month.  This oil and mineral rich country continues to receive global funds which certainly helps the CAD.  Higher oil, gold and equities also helped the CAD this morning.  After trading at 1.1019 bounced to a high of 1.1094 and is now trading at 1.1053.  The CAD was the quite firm this past week, but the rate of appreciation has slowed, making us think that a retrace back to the vicinity of 1.13 might happen.  This is a counter trend trade so keep stops close.

Bias:  Higher  Bias Term:  Medium  Support: 1.1020  1.0940  1.0820 Resistance: 1.1120  1.1220  1.13

AUD/USD Commentary and Trade Ideas 

Better attitude toward equities this morning carried the AUD higher this morning higher and we are currently trading at .8140. This pair has traded here numerous previous times and generally stalls above .81. Last month the Central banker was also a seller of AUD's on a rally, so we really question this market's ability to move substantially higher from here. We will watch developments for a trading opportunity.

Bias: Neutral Bias Term: Medium Support: .7969 .7850 .7670 Resistance: .8140 .8220 .8300

NZD/USD Commentary and Trade Ideas 

Global equity strength has assisted the value of the Kiwi this morning and we are currently trading at .6540. We are back in an area where the market has stalled before, and are not inclined to be buyers at this level.

Bias: Higher Bias Term: Medium Support: .6510 .6420 .6300 Resistance: .6560 .6700 .6770

Published on  Mon, Jul 20 2009, 19:42 GMT

Bombs and bankruptcies are not helpful stimulants for risk appetite

Fri, Jul 17 2009, 17:39 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

 The dollar bears have had their fun this week but in the context of the weekly range, they have been unable to forge any new ground. Currently we are trading at 1.4110, waiting around for some quarterly earnings estimates. Will there not be some week end profit taking? We still have the possibility that bankruptcy of the CIT Group will send reverberations through the retail trade they service. And the bombs in Jakarta serve as a reminder that ill mannered malcontents are still with us. Bombs and bankruptcies are not helpful stimulants for risk appetite. As we have observed, the US economy and the dollar have problems, but when 65% of the global currency reserves are in dollars, there is a mighty vested interest that does not want to see the dollar tank. A retreat from current levels would not be a surprise. Events and the flow of funds will determine if we hold the 1.40's or sell off further.

Bias: Lower Bias Term: Medium Support: 1.4060 1.3980 1.3770 Resistance: 1.4170 1.4270 1.4350

 GBP/USD Commentary and Trade Ideas 

A critical report by the IMF this morning prompted a pound sell off down under 1.63. They warned that the spend now and pay later scheme has pushed debt to 13% of the current GNP. Total debt could grow to 100% of GNP unless the current government mends their ways. Unfortunately for the Brits, Gordon Brown's myopic goal is the retention of power Painful policy changes which threaten the future of the incumbent politicians, regardless that longer term harm to the economy, are unlikely. Despite some evidence that the economic recovery is faltering, the pound so far is not. London is a global financial center, and capital inflow from the Middle East may be covering up the current problems and issues. Spending time and money in the UK is pleasant and offers more opportunity and diversions than the hot sandy cities back home in the Middle East. Despite bearish news and IMF warnings, the pound stubbornly refuses to falter. Is market action trumping the perception of market fundamentals?

Bias: Neutral Bias Term: Medium Support: 1.6280 1.6240 1.6190 Resistance: 1.6370 1.6460 1.6560

USD/JPY Commentary and Trade Ideas 

It will be interesting to see in this afternoons COT report if any of the specs who aggressively sold the dollar down into a hole versus the yen have covers their positions. The dollar has recovered nicely this week but may be approaching some resistance at about 95. Stronger equities were sited at the reason the yen weakened this past week, but today US stocks are mixed to a little lower. Though not inclined to assume a new position on a Friday, I would consider going long the pair on a sell off into the 93 area.

Bias: Higher Bias Term: Medium Support: 93.20 92.50 91.60 Resistance: 94.20 94.80 95.70

 USD/CHF Commentary and Trade Ideas

This pair is getting pretty boring. Perhaps we have to get the SNB riled so they can stir something up. It looks like the current trading range is 1.07 to 1.08, so if you have a Swiss franc trading addiction, you can try fading the market at these levels.

Bias: Neutral Bias Term: Medium Support: 1.0730 1.0690 1.0600 Resistance: 1.0820 1.0890 1.0940

USD/CAD Commentary and Trade Ideas

This week's sprint to the downside from 1.1670 to 1.11 and change has come to an abrupt halt. The market acts like there may be some large orders in the 111.70 area. Could there be some stealth intervention from those desirous of a cheap CAD for competitive reasons? It is best to stand aside until it can be determined if some one has an agenda.

Bias: Neutral Bias Term: Medium Support: 1.1160 1.1110 1.1060 Resistance: 1.1220 1.1300 1.1360

AUD/USD Commentary and Trade Ideas 

The AUD is not wondering too far from the 80 handle, as equities likewise are going sideways.  The inability of this pair to continue to move above the 80 level, was apparently contained by the Central bank which was a sizable seller of the AUD.  The Aussies like to preserve their competitive advantage and do not want a more expensive AUD.  If they sold it last month, they are probably still sellers, so it looks like the AUD should be scalped from the short side on rallies.

Bias:  Lower  Bias Term:  Medium  Support: .7960 .7850 .7670  Resistance: .8030 .8140 .8220

NZD/USD Commentary and Trade Ideas 

As this pair marches to the side, you wonder if this is an example of a market, unable to go up, ends up going down.  Should the hope and pending prosperity preachers fail to produce some results, stale longs may chose to exit this small market.

Bias:  Neutral  Bias Term:  Medium  Support: .6420 .6300 .6250  Resistance: .6500 

Published on  Fri, Jul 17 2009, 17:39 GMT

Will history repeat?

Thu, Jul 16 2009, 18:08 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

This mornings initial jobless claims report showed the smallest number of claims since a report many months ago. They then proceeded to to explain that somehow the auto manufacturing layoffs are not yet included in the numbers. The market concluded the report is a non event at worst, and certainly not a reason to tarnish the street's bullish euphoria. JP Morgan's earning this morning exceeded the street's expectations. Look for almost all the big banks to report good earnings. A positive yield curve makes time the bankers friend, and, the "mark to market" rule can be a good thing when pricing billions of illiquid loans. Currently the pair is trading at 1.41, not far from the weekly highs. In addition to the risk appetite, perhaps fueled by fund managers embarrassing supply of cash and not equities, there are longer term bearish dollar themes. Take Obama Care for example. If the current US House plan was enacted, marginal tax rates would go to 58% in New York, and 62/3% if you owned a small business. With FDR, Obama's hero, in charge, unemployment went to 18% by 1938. Finally with the help of Adolph Hitler and friends employment finally came down in the 1940's. To what extent will history repeat? It looks like this week belongs to the dollar bears, so it is best to go with them.

Bias: Higher Bias Term: Medium Support: 1.4040 1.3980 1.3770 Resistance: 1.4100 1.4170 1.4270

 GBP/USD Commentary and Trade Ideas 

The market retreated in the London session from yesterdays high of 1.6452 down to 1.6355, and then rallied back to a new high. We are now trading at 1.6433. Equities remain firm, consolidating after yesterdays run. News is sparse, but this has been a strong week. Perhaps the market will retreat but there are probably enough bulls and positionless bulls around, the market will probably very little. Scalp the long side on breaks with tight stops.

Bias: Higher Bias Term: Medium Support: 1.6390 1.6320 1.6240 Resistance: 1.6459 1.6560 1.6610

USD/JPY Commentary and Trade Ideas 

The pressure from last week's spec selling of the dollar versus the yen abated and up we went to the resistance at 94.40. Currently we are trading at about 93.50. The Chinese data citing a better than expected 7.9% increase in the 2nd quarter GNP, has the early recession recovery fans excited. Forget the zombie empty high rise condos, and the current rash of car loans on terms that would make the American 2006 no document sub prime mortgage applicant jealous, the 7.9% growth rate is right and we are on the cusp of another boom. Well in the 50's through the 70's the West was always of envious of the Soviet growth. Those growth numbers were fabricated. What do we know about the accuracy of the Chinese estimates? The Japanese yen seems to be the flip side of the equities market. If the week long bull stock market has more to go, why won't the dollar have a run up to 95 versus the yen.

Bias: Higher Bias Term: Medium Support: 93.20 92.50 91.60 Resistance: 94.20 94.80 95.70

 USD/CHF Commentary and Trade Ideas

This pair sold off close to 1.07, and then had a modest bounce to the 1.0750. Interesting to note that the flight to equities, which helped some currencies versus the dollar, did not do much to strengthen the franc. Does this mean that a stock market sell off would cause the dollar to rally versus the franc .Let's try to buy this pair at 1.0570 with a 100 stop and test the resolve of the SNB, and their desire for a cheap franc.

Bias: Neutral Bias Term: Medium Support: 1.0750 1.0690 1.0600 Resistance: 1.0820 1.0890 1.0940

USD/CAD Commentary and Trade Ideas

The strength in the CAD versus the USD had paused in concert with a mixed equities and crude market this morning. We are currently trading at 111.80 in a seemingly quiet trade. A retreat to the vicinity of 1.13 would provide an ideal buy area spot but that does not appear likely.

Bias: Lower Bias Term: Medium Support: 1.1160 1.1110 1.1060 Resistance: 1.1220 1.1399 1.1360

AUD/USD Commentary and Trade Ideas 

The AUD, moving in concert with the equities market this week, is quiet today trading at .8020. A quick recovery from the current recession is expected because Australia and China are big trading partners. This is a popular theory, but is it true? A central controlled economy can commence production by executive order, but finding consumers for the end product will be more difficult. Many US consumers, confronted with declining real estate prices, potential job losses, and fearful of foreclosure will not return to stores as aggressive buyers. Look for the market to stall in the current area.

Bias: Neutral Bias Term: Medium Support: .7959 .7850 .7670 Resistance: .8030 .8140 .8220

NZD/USD Commentary and Trade Ideas 

A rating service, Fitch, downgraded the Kiwi this morning stating the current account deficit is a cause for concern going forward. This knocked the currency down from .65 to below .64 prior to a return to .6440. The commodity story is an old one and the market is loaded with longs. No trading ideas.

Bias: Neutral Bias Term: Medium Support: .6420 .6300 .6250 Resistance: .6500 .6560 .6700

Published on  Thu, Jul 16 2009, 18:08 GMT

Yen goes from a leading contender in the world's strongest currency contest to one of the weakest

Wed, Jul 15 2009, 18:32 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The broad based demand for equities, responding to excellent earnings posted by Goldman and Intel, has revived risk appetite and sent the USD lower against most currencies. Currently the EUR is trading at 1.4090, near the high. The afterglow of yesterdays news has given stocks upside momentum, but how will the market behave with less cheery tidings? It is rumored that the Fed and FDIC are currently involved in intense negotiations with the CIT Group. No one knows how dire their plight is, but it is rumored that some businesses, financed by this bank, are drawing down their credit line. What would the failure of the City Group do to the dollar and stock prices? It is psychological bearish on stocks but to conclude that the dollar would benefit such a failure seems convoluted. The bullish response of the euro has exceeded our expectations, and we suspect there may be more to this move than just earnings. Having some doubts the rally will hold, we feel it is prudent to watch developments today.

Bias: Neutral Bias Term: Medium Support: 1.4040 1.3980 1.3770 Resistance: 1.4100 1.4170 1.4270

 GBP/USD Commentary and Trade Ideas 

Economic reports from the UK again gave mixed signals as initial unemployment claims were less than expected while UK unemployment moved up to 7.6% higher than the forecast of 7.4% Though a Bank of England official warned that quantitative easing may continue after August, this news, normally bearish, was negated by higher equities and rumors of some concentrated Middle Eastern buying. The sharp rally above 1.6400 has propelled the market into an area where there should be some resistance, but the ability of the market to easily move and stay above the 1.6380 area is impressive. There appears to be more here than meets the eye. Perhaps pound strength is less important than disdain for the dollar. The market should be due for a little rest, perhaps a sell off, but I prefer to wait until tomorrow for any recommendations.

Bias: Higher Bias Term: Medium Support: 1.6390 1.6320 1.6240 Resistance: 1.6450 1.6560 1.66.10

USD/JPY Commentary and Trade Ideas 

In just a couple days the yen goes from a leading contender in the world's strongest currency contest to one of the weakest. We are now trading in the 94 vicinity, after specs drove the market under 92 during this past week. A reawakened equity bull is given as the reason for the recent yen sell off. Should the news turn bearish and the stocks retreat, a similar yen trade would seem likely. On the theory there may be more upside in this pair, let's try to buy the USD versus the yen on a pull back to 93.50 risking 90 points, keeping the top side open.

Bias: Higher Bias Term: Medium Support: 92.50 91.60 90.80 Resistance: 94.20 94.80 95.70

 USD/CHF Commentary and Trade Ideas

After a rally up to 1.0935 the dollar tanked versus the franc. Currently we are trading at 1.0752, a level we thought would find some friends. Since the weakness is more confined to the dollar rather the the euro/franc, the SNB may not be so quick to intervene, and a further sell off seems possible. Let's try to scalp from the long side if this pair trades around 1.0690.

Bias: Higher Bias Term: Medium Support: 1.0750 1.0690 1.0600 Resistance: 1.0820 1.0890 1.0940

USD/CAD Commentary and Trade Ideas

The CAD continues to exhibit outstanding strength extending gains from earlier this week. Strong oil and equities are assisting. We should have picked up a clue the market was about to turn last week when lower oil and equities were unable to take the market lower. Often this market continues to trend further than anticipated, so it does not give you a good retrace to buy. Currently the pair is trading at 1.1190. An ideal buy spot would be in the 1.13 area.

Bias: Lower Bias Term: Medium Support: 111.90 11060 1.0920 Resistance: 1.1300 11360 1.1430

AUD/USD Commentary and Trade Ideas 

The equities market has pulled the AUD back above the .80 level and is currently trading at about .8050. The rally looks overextended but it may be best to take a break until the stocks cool off.

Bias: Higher Bias Term: Long Support: .7950 .7850 .7670 Resistance: .8030 8140 .8220

NZD/USD Commentary and Trade Ideas 

The equities rally has elevated the Kiwi back to the .65 level. This is a small market and the futures is dominated by some very large players on both sides. No trading suggestions.

Bias: Higher Bias Term: Medium Support: .6420 .6300 .6250 Resistance: .6500 .6560 .6700

Published on  Wed, Jul 15 2009, 18:32 GMT

Dollar on top of the rest

Tue, Jul 14 2009, 18:18 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

At two pm yesterday our group of happy spenders in Washington announced a new record 1.09 trillion dollar deficit for the first nine months of the fiscal year. Records are made to be broken, however, and the deficit is bound to grow. In the process of showering the country with stimulus funds, the well connected insiders at Goldman Saks found a way to pocket 2.7 billion during the quarter from trading gains. So we have the equities and the euro higher on rumors of better corporate earnings, and some minor concern about the US Treasury deficit. The US retail sales report released this morning showed that higher gasoline prices, and other concerns reduced retail consumer spending else where. The higher oil cost gave us a big increase in the PPI. Currently trading at 1.3980, it appears the market has assimilated the information. Largely ignored were a couple of EZ reports about lessened business optimism and lower industrial production in Germany. As the earnings season continues, will all the surprises be bullish for equities? Prefer to trade the short side of this pair with a target in the vicinity of 1.38.

Bias: Lower Bias Term: Medium Support: 1.3870 1.3770 1.3620 Resistance: 1.3980

 GBP/USD Commentary and Trade Ideas 

Some better economic data including higher retail sales gave the pound a boost, chasing shorts out and running the pair up to 1,6340. There appears some resistance at that level and we are now backing off, currently trading at 1.6260. The Goldman earnings did give the equities market a boost, but it was subsequently announced Goldman insiders sold 700M of stock. Do you think they know something? Today's rally carried the pound back to a high at the 18 and 40 day SMA, prior to the sell off. Though the market looks like it is rolling over after the big run up from the high 1.30's, it has been a tease for the bear. Let's rest for a day and see what tomorrows employment reports in the UK shows.

Bias: Neutral Bias Term: Medium Support: 1.6190 1.6090 1.5970 Resistance: 1.6320 1.6370 1.6450

USD/JPY Commentary and Trade Ideas 

Yesterdays abrupt turn for the better in equities started a rally in the yen that carried it back to 93.35 where there is some resistance. We wonder if the rally will foster some short covering. The sell off which pounded the dollar down under 92 yen was speculative. The Japanese vice finance minister said yesterday that Japan will continue to buy US Treasuries and support the dollar. Japanese central bankers want a lower yen to help their exports. If the spec selling is done, the dollar could be due for a rally, perhaps back to the 95 level. Try the long side of this pair should it retreat to the 92.50 area.

Bias: Higher Bias Term: Medium Support: 92.50 91.60 90.80 Resistance: 93.30 94.20 94.80

 USD/CHF Commentary and Trade Ideas

Not much new to report on the Swiss franc. We continue to recommend the buy side of the pair if given the opportunity in the 1.0750 area, but we are currently at the 1.0860 level. The treat of toxic loan defaults by East Europeans remains a threat to the franc.

Bias: Neutral Bias Term: Medium Support: 1.0820 1.0760 1.0700 Resistance: 1.0890 1.0940 1.1010

USD/CAD Commentary and Trade Ideas

 The CAD continues to gain on the USD and is currently trading at 1.1365. We have been friendly to the CAD versus the USD but our buy orders were too cautious. When the CAD was able to rally despite a lower crude market, that should have been a clue that the market was strong. This is a market that acts like there are some big players on both sides. Perhaps some are hedgers, locking in exchange rates for the vast amount of US Canadian trade. Canadian business is optimistic going forward and the Canadian energy policy is far superior to that Ken Salazar, our Sec.of windmills and solar panels. Longer term we still prefer the CAD but the pair may have gone too far to soon. Try scalping the short side if the market gets to 1.1310.

Bias: Higher Bias Term: Medium Support: 1.1360 1.1260 1.11.40 Resistance: 1.1400 1.1470 1.1540

AUD/USD Commentary and Trade Ideas 

The equities rally turned this pair around and we have rallied up to the .79 level where it has stalled. This currency has been a preferred destination for the carry trade but recently there has been some unwinding of this trade with Japan. Try the sell side in the current area, .7895, and see if there is not some more liquidation putting a lid on prices.

Bias: Lower Bias Term: Medium Support: .7850 .7750 .7670 Resistance: .7910 .8010 .8140

NZD/USD Commentary and Trade Ideas 

Stronger equities has changed the attitude about the Kiwi and rallied it back to .6360 where there is some resistance. No strong views on this slow mover.

Bias: Lower Bias Term: Medium Support: .6300 .6250 .6210 Resistance: .6360 .6400 .6500

Published on  Tue, Jul 14 2009, 18:18 GMT

UK problems could send GBP lower

Mon, Jul 13 2009, 17:44 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The early morning strength of the USD, trading briefly at the 1.39 level was reversed when the global equities market found their footing and stopped the sell off. The EUR then rallied up into the high 1.39 area and is currently trading at 1.3953. A weekend UK article, bearish on the EURO because of soaring debt, got some attention, but this problem transends borders and seems to be reaching an epidemic status. This afternoon we get the US June budget deficit estimate. The deficit forecast is estimated to be 95B during the latest month. Perhaps this report, in conjunction with many pending corporate earnings reports, will provide incite into the economies vitality. We look for some report inspired volatility, and are inclined to be a seller should the market work back up to the 1.40+ level. Risk 100 points from entry. The target price is a 1.3750.

Bias: Lower Bias Term: Medium Support: 1.3870 1.3770 1.3620 Resistance: 1.3980 1.4060 1.4110

GBP/USD Commentary and Trade Ideas 

The pound has been reeling under pressure from IMF comments, who claims that the UK budget deficit, estimated to reach 14% of GDP is quite dire. Further stimulus, bail outs, and quantitative easing is not affordable, in their opinion. With Gordon Brown's unpopular administration fumbling and bumbling along, trying to stay in power, does anyone really think they will heed the IMF warnings? The concern is that some of the UK banks will need further assistance. The UK Telegraph however, perhaps in response to the IMF, said there were a lot of bad loans in the EZ too. The lengthy bull run from the high 1.30's is showing signs of rolling over. Prefer the short side of the pound in the 1.6150 area. In a similar vein, consider owning the EUR/GBP, currently trading at .8640. This pair is showing signs of breaking out of the top side of the channel that has been in place since mid-March.

Bias: Lower Bias Term: Medium Support: 1.6090 1.5970 1.5740 Resistance: 1.6190 1,6260 1.6340

USD/JPY Commentary and Trade Ideas 

The COT futures report released on Friday showed the speculators, large and small had been massive buyers of the yen in the last reporting period. The large spec was a buyer of 13,587 contracts and reduced his short by 4643 contracts. Smaller speculators were also on the buy side of the yen. The selling to the specs was obviously done by the commercials. Most likely this intense spec activity is an offset for another trade, perhaps by hedge funds, but it hard enough keeping your own books. It appears that the selling is over, after four days of a sideways trade. The equities market has been battered ahead of the earnings season. What happens if some of the stimulus happy money provides us with some bullish surprises? Try the long side of the yen in the low 92 area with an appropriate money management risk control.

Bias: Neutral Bias Term: Medium Support: 92.20 91.60 90.80 Resistance: 92.90 93.40 94.60

 USD/CHF Commentary and Trade Ideas

This pair continues to move sideways stuck in neutral. A morning report that the Swiss PPI is down 5.6% from year ago numbers was largely ignored. In the latest COT report, commercials reduced longs and increased short to 59% of the total futures OI. Commercials have been very good front runners seemingly always ahead of SNB intervention. Try the long side of this market on a sell off under 1.0750.

Bias: Neutral Bias Term: Medium Support: 1.0820 1.0760 1.0700 Resistance: 1.0890 1.0940 1. 1010

USD/CAD Commentary and Trade Ideas

We are remaining in the 1.14/17 trading range, but the morning the CAD got a boost on a very positive Bank Of Canada survey of business optimism and a stronger equity market. Our preference has been to sell the USDCAD in the 1.17 area but this has been too cautious. Currently we are trading at 1.1535. Perhaps not all of the earnings season reports will be constructive so let's try to sell a rally back to 1.1650

Bias: Lower Bias Term: Long Support: 1.1540 1.1470 1.1400 Resistance: 1.1650 1.1740 1.1790

AUD/USD Commentary and Trade Ideas 

After selling off to .77 we have since returned to a little over .78 as the equities market has recovered this morning. The bull has been in control for quite a while and we are starting to see some liquidation. Try the short side of this pair if the current rally carried back toward the .79 level.

Bias: Lower Bias Term: Medium Support: .7750 .7670 .7510 Resistance: .7810 .7930 .8010

NZD/USD Commentary and Trade Ideas 

This pair has rallied from a sell off close to .62 and is now trading at .6290. NZ retails sales came in a little better than expected making some think the worst recession in years is abating. The COT futures report shows we have had some very modest long liquidation in a market that is very long. My preference is to sell strength, but this pair is a very slow mover.

Bias: Lower Bias Term: Long Support: .6250 .6210 .6160 Resistance: .6320 .6400 .6500

Published on  Mon, Jul 13 2009, 17:44 GMT

Wait and see

Fri, Jul 10 2009, 19:24 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Both the bulls and the bears are getting a little feisty, and the price of the pair, currently 1.3933, is down from 1.4020 early and up from a mid morning break of 1.3880. There are some mixed economic numbers from both sides of the Atlantic but these are probably not as important as projections of economic activity going forward. Lower oil prices are cited as evidence of slackened economic activity by some, while others claim economic activity has contracted because of the recent higher oil prices. We are currently trading oil and equities lower which is helping the yen and the dollar. US Treasuries are yielding a few basis points less as investors move toward perceived safety. Further weakness in equities caused by faltering recovery expectations should help the USD, but this strength can be easily dispelled if the Washington spendthrifts begin to hype a new "stimulus package." My inclination is to be short above 1.40, but the recent trade, to a lower swing low, followed by a higher swing high makes me think it is best to take a weekend trading break.

Bias: Neutral Bias Term: Medium Support: 1.3870 1.3770 1.3620 Resistance: 1.3980 1.4060 1.4110

GBP/USD Commentary and Trade Ideas 

Currently we are trading at 1.6190, about the middle of the trading range for the last two days. We did manage to sell off to 1.5980, but quickly went back up 400 points to 1.6380. Realization that economic recovery will likely be weak and probably deferred, may be hurting the pound. The daily charts have the appearance of a rounded top, but we probably need some trades under 1.5950 for confirmation the bull party is over. With the advantage of 20/20 hind sight, the 1.60 area was a buy and above 1.6350 was a sell. I prefer to be a seller on strength back in the 1.6350 area, but I am inclined to wait until Monday.

Bias: Lower Bias Term: Medium Support: 1.6170 1.6090 1.5970 Resistance: 1.6260 1.6340 1.6430

USD/JPY Commentary and Trade Ideas 

Today once again the yen is enjoying the most favored currency status. We wonder if this represents unwinding of previous carry trades, or is this move discounting future global economic weakness. The 92.30 level where we are currently trading, is the level we were trading back in early February. If you assume economic conditions were worse then than now, this break may just be liquidating trades and can probably be bought once the selling abates. The trouble is no one tells you when the selling is over. Stand aside for now.

Bias: Lower Bias Term: Medium Support: 92.20 91.60 90.80 Resistance: 93.40 94.60 95.20

 USD/CHF Commentary and Trade Ideas

To bad yesterday's buy recommendation 1.0740 was 10 pips to low to get filled. The market rallied to 1.0925, and is currently trading at 1.0860. The SNB has alerted they will interfere should the franc get too strong, and commercials in the franc futures market have a history of front running the central banks activity. Was today's run up caused by commercial buying? With the market trading in the middle of the range on a Friday, we have no trading suggestions.

Bias: Neutral Bias Term: Medium Support: 1.0840 1.0760 1.0700 Resistance: 1.0890 1.0940 1.1010

USD/CAD Commentary and Trade Ideas

This mornings economic reports suggest that economic conditions may be modestly improving, but lower equities and lio keep the CAD on the defensive. We have been trading sideways in a 1.14 to 1.17 range for the past three weeks, as the strength of the USD against the CAD seems to be waning. My preference is to be a seller of this pair on a revisit to the 1.1700 level, or consider selling the AUD/CAD in the vicinity of .91. The current trade is at .9024.

Bias: Lower Bias Term: Long Support: 1.1590 1.1470 1.1400 Resistance: 1.1675 1.1740 1.1790

AUD/USD Commentary and Trade Ideas 

The AUD is grudgingly giving up ground to the USD, and is now trading at .7775. Our preference is the short side in the .7850 to .7900 level. Part of the bull AUD story is the proximity and importance of the Chinese trade. Today it was reported that Chinese exports were down for the 8th month in a row, and are down 21% to year ago comparisons. This indicates that the Chinese, by central planning directon, can order production of items but that does not mean the demand will be there. The bulls need confirmation stories almost every day. Without these stories look for some selling from stale longs.

Bias: Lower Bias Term: Long Support: .7750 .7670 .7510 Resistance: .7810 .7930 .8010

NZD/USD Commentary and Trade Ideas 

This pair is currently trading at .6275 as it continues to meander sideways. The pair is now trading under the 40 day moving average, clearly an indication that bullish momentum has abated. The UBS Bloomberg CMCI commodity index has sold off about 8% from the high. When will some of the macro commodity currency money start to flow out of of New Zealand? My preference is this short side, but this is a slow mover.

Bias: Lower Bias Term: Long Support: .6250 .6210 .6160 Resistance: .6330 .6400 .66530

Published on  Fri, Jul 10 2009, 19:24 GMT

Pound is probably benefiting from an inflow of capital into the country

Thu, Jul 9 2009, 18:35 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Yesterdays sell off in the Euro versus the Dollar came to an abrupt halt a little under 1.3850 and then traded up to 1.40 Better than expected earnings was cited as the reason for the stock reversal. If this is the reason the Euro gained, then best be cautious because all earnings reports will not be good ones. The pattern of lower lows and highs which has been in place since early July would imply that the 1.3990 was a level that should have been sold. There were some interesting comments by Noriel Roubini in Forbes about US unemployment. He contends that the current US unemployment rate is about 16% when the partially employed and the discouraged workers that have given up seeking employment are considered. Further he estimates that almost half of the non prime mortgage holders will be under water by the end of the year, and US banking problems will again be at the forefront. Yes, he has been called Dr. Doom, but he has also been right. If he is right, bearish views of the US economy are proper, but just how long will this continue to be bullish on the dollar? There may be a trade here but I don't know what it is.

Bias: Neutral Bias Term: Medium Support: 1.3920 1.3840 1.3770 Resistance: 1.4000 1.4110 1.4180

GBP/USD Commentary and Trade Ideas 

The sell off to little under 1.60 was achieved, and surprisingly there appears to be few stops at that level. Rumors of large middle east buying in conjunction with other speculative interest in the low 1.60 area initiated the recovery. The Bank of England's confirmation that the rate will remain unchanged, and they will not increase their quantitative easing program boosted the market to the high a little above 1.6260. Economic reports continue to be tepid, but the pound is probably benefiting from an inflow of capital into the country. Inclined to scalp the short side as long as we are trading above 1.62, but a trade above today's high

Bias: Lower Bias Term: Medium Support: 1.6140 1.6090 1.5970 Resistance: 1.6260 1.6340 1.6430

Bias:  Lower  Bias Term:  Medium  Support: 1.6090  1.5970  1.5890  Resistance:  1.6140  1.7270  1.6340

USD/JPY Commentary and Trade Ideas 

Was yesterdays sell off the final capitulation of those lugging the wrong positions, or do the new lows indicate a change in the market's trend? We are currently trading at 92.80, about 100 up from yesterday's low. The Japanese Central Bank has expressed their displeasure of the current level, and for trade purposes prefers a weaker yen. So far it appears they are only trying to talk the yen lower. This sell off has been steeper and deeper that I anticipated, so I am refraining from new recommendations, choosing to observe market behavior.

Bias: Lower Bias Term: Medium Support: 92.20 91.60 90.80 Resistance: 93.50 94.60 95.20

 USD/CHF Commentary and Trade Ideas

It looks like when equities stopped their sell off, so did the franc, versus the dollar. From a high a little above 1.0930 we have sold down to 1.0810. The big issue here is when does the strength in the SF attrach intervention by the SNB. The EUR/CHF at 1.5130 is getting very close to where their was government intervention before. Try to but the USD versus the franc if able in the 1.0740 area, risking 100 points. Perhaps the SNB will pay you a dividend.

Bias: Higher Bias Term: Medium Support: 1.0840 1.0760 1.0700 Resistance: 1.0840 1.0940 1.1010

USD/CAD Commentary and Trade Ideas

Yesterday's rally carried us a little above 1.17 and subsequently failed, then falling back down to 1.1550. This volatile churning action implies that there is a real war going on in this market, and the winner has yet to be determined. Longer term my bias is bullish but lower oil, equities and commodity are the bears current talking points. Try selling a return to the 1.17 level risking 100 points.

Bias: Higher Bias Term: Short Support: 1.1590 1.1470 1.1400 Resistance: 1.1675 1.1740 1.1790

AUD/USD Commentary and Trade Ideas 

This pair has recovered from yesterday's 77.20 low and has rallied up to a little above .7850 where we suggested selling yesterday. Unemployment in Australia came in at 5.8%, about as expected. Recent trade disputes between the Australians and the Chinese have made some traders wary of their relationship. There are now some experts forecasting the current global recession may last longer than previously forecast. In stead of a sharp recovery, with a V or a U shaped chart bottom, a W bottom is now perceived as more likely. Should some of the Australian longs become tired and impatient, there may be some more selling.

Bias: Lower Bias Term: Medium Support: .7800 .7750 7670 Resistance: .7930 .8010 .8100

NZD/USD Commentary and Trade Ideas 

The Kiwi has rallied back to .6330 but has since backed off a bit. There may be some impatience from longs who feel they are positioned to take advantage of the pending economic recovery.The market looks like we a making a round inverted top, however the Kiwi is not a fast mover.

Bias: Lower Bias Term: Long Support: .6260 .6210 .6160 Resistance: .6330 .6400 .6530

Published on  Thu, Jul 9 2009, 18:35 GMT

Will the weakness in the EUR/CHF close to the 1.51 area attract the SNB attention?

Wed, Jul 8 2009, 19:10 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The euphoria following last quarters stock market performance is waning, and the reports of the anticipated economic recovery are not reassuring. Earlier this year a surplus of idle cash, remaining idle was not fashionable, so investors, fearful of being left behind, came after equities. To assign the reason for the daily dollar fluctuations to changes in risk attitude seems a little simplistic. Perhaps the ability of the US Treasury to successfully borrow the first trillion, which helps finance the current deficit and embark on new spending ventures deserves some credit. So far there are no indications the US Gov will not be able to borrow the second trillion. With credit like this, the scheduled wake for the death of the dollar had best be postponed, regardless the directions of stocks. If the G8 members can refrain from serious dollar bashing, a return close to the 1.40 level can be sold with an appropriate stop. The target price for this trade is in the 1.37 area.

Bias: Lower Bias Term: Medium Support: 1.3890 1.3830 1.3770 Resistance: 1.4050 1.4110 1.4180

GBP/USD Commentary and Trade Ideas 

Yesterday's failure to mount a rally back over the 1.63 level was significant.  When a market is unable to go up, it generally goes down.  At 1.60 we have the same principle operating, but providing market support if we are unable to spend some time under 1.60.  We have been bearish on this pair looking for a return to the low sixties.  The lack of an aggressive bear move probably indicates a bounce back to the 1.62 level is possible.  The Bank Of England has decided that a levy of bank funds for consumer money management education is appropriate. Ironic yes, but will this pay for the education of the bankers who mismanaged billions in the sub prime debacle?

Bias:  Lower  Bias Term:  Medium  Support: 1.6090  1.5970  1.5890  Resistance:  1.6140  1.7270  1.6340

USD/JPY Commentary and Trade Ideas 

So much for the yen and dollar being range bound as we cleaned out stops under previous spike bottoms in March and May.  Currently we are trading at 93.101, after a few trades under the 93 level.  It is not that the Japanese economic conditions have improved, but rather, the rest of the world has turned ugly.  The yen has gained against all currencies as risk aversion is the theme de jour.  I still think there will be some yen selling and dollar buying because of note and bond yield differentials, but this may be offset by commodity currency bulls rethinking their commitments.  At the 93 level I would rather be a buyer than a seller, but fading a trend is risky. 

Bias:  Higher  Bias Term:  Medium  Support: 93.00  91.60  90.80  Resistance: 93.90  94.60  95.20

 USD/CHF Commentary and Trade Ideas

Congratulations to the Swiss for their decision to do battle with the IRS over the responsibility of reporting about US citizens banking activity and income status. Not sure how this impacts the USDCHF relationship. The dollar has firmed because of global equity weakness. Currently we are trading at 1.0920. The market acts like it wants to trade higher possibly searching for stops above the 1.10 area. Will the weakness in the EUR/CHF close to the 1.51 area attract the SNB attention?

Bias: Higher Bias Term: Medium Support: 1.0840 1.0760 1.0700 Resistance: 1.0940 1.1010 1.1180

USD/CAD Commentary and Trade Ideas

This mornings sell off under 1.16 did not last long, nor did it get very far. We are trading at 1.1680, with the market acting like it wants to check out the 1.17 to 1.18 level. Longer term I favor a long CAD because they have and are developing their natural resources, their government is more friendly to business development than the US government, and Canadian Banks may have fewer toxic loans than those in the US. In the short term, some of the CAD bulls seem to be bailing, and may provide a better buying opportunity.

Bias: Higher Bias Term: Short Support: 1.1590 1.1470 1.1400 Resistance: 1.1740 1.1790 1.1930

AUD/USD Commentary and Trade Ideas 

After meandering sideways for over a month, this market had turned to the downside. Our initial downside target was .78 was exceeded and we are now trading at around .7750. As we have repeatedly pointed out, the futures market was overpopulated by longs, so a sell off was expected. Try selling the market on a rally back into the .78/.7850 area. It is possible that some of today's yen strength may be may be unwinding of the carry trade.

Bias: Lower Bias Term: Long Support: .7750 .7670 .7530 Resistance: .7820 .7930 .8010

NZD/USD Commentary and Trade Ideas 

This pair finally shows signs of breaking to the down side.  Reevaluation of how much money should be committed to the commodity currency may be behind some of today's break.  We are currently trading  at .6235, and would try the sell side on a rally back to the .6300 area. 

Bias:  Lower  Bias Term:  Medium  Support: .6210  .6160  .6100  Resistance: .6300  .6400  .6530

Published on  Wed, Jul 8 2009, 19:10 GMT

Yen safe haven status in troubled times

Tue, Jul 7 2009, 16:29 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

With European equities trading modestly higher and German factory orders coming in better than expected, that was enough to move the EUR up over 100 points to a high of 1.4040. Currently we have retraced back to about 1.40, a level which the bulls and the bears would probably consider a tie. The US Treasury is auctioning 35B of 3 year notes today, then 19B of 10 year notes, and finally 11B of 30 year bonds. Results of this auction may give us an indication if the USD denominated notes and bonds will continue to find continued acceptance among global investors. There are some experts who think that 30 year US bonds yielding only 4.4% are terrible investments. The COT futures reports speculators are united, bearish the dollar. Without out some dynamic input today, this pair is probably a fade if it moves 50/75 pips on either side of 1.40.

Bias: Neutral Bias Term: Short Support: 1.3890 1.3830 1.3770 Resistance: 1.4050 1.4110 1.4180

GBP/USD Commentary and Trade Ideas 

Today's rally after yesterdays bearish breakdown, failed to make it back above 1.63, and has subsequently sold off to the 1.6150 area. Both the UK manufacturing and industrial production reports came in at less than forecast, a disappointment for the quick recovery bulls. A 15% higher pound may be a hindrance to increased manufacturing. The lengthy bull move has stalled and some moving average are showing crossovers. Try to scalp the short side today, preferably in the 1.62 area. If we slide under yesterday's low, a return to the 1.60 handle looks possible.

Bias: Lower Bias Term: Medium Support: 1.6150 1.6090 1.5970 Resistance: 1.6270 1.6340 1.6450

USD/JPY Commentary and Trade Ideas 

Yesterday's equities sell off again demonstrated the yen safe haven status in troubled times. The USD sell off to the yen carried the pair to under 94.80 prior to a rally back to 95.40. We are again under 95, a level at which we prefer to be long going into the US Treasury auction. It is possible the Japanese investors will sell the stronger yen to buy higher yielding investments overseas. The risk is continued equity price erosion.

Bias: Higher Bias Term: Medium Support: 94.60 93.90 93.00 Resistance: 95.20 95.80 96.90

 USD/CHF Commentary and Trade Ideas

Equity weakness gave us dollar strength which took us back up to about 1.0950 for a few minutes and then retreated back to the 1.0850 area. Perhaps there is trading opportunity in this pair but the trade eludes me. Last week's COT report strongly suggests the commercials have been alerted prior to SNB intervention It may be best to find their coattails.

Bias: Neutral Bias Term: Medium Support: 1.0840 1.0760 1.0700 Resistance: 1.0940 1.1010 1.1180

USD/CAD Commentary and Trade Ideas

This morning it was reported that new building construction surged in May. Some experts offered this as prove the Canadian economy is quickly recovering, while a few others merely credited this to a late arriving spring. Oil is weaker again today, and commodities and stocks are also lower, so it is not surprising that we are trading back at the 1.16 level. My preference is to use strength above 1.16 to scalp the market from the short side.

Bias: Lower Bias Term: Medium Support: 1.1560 1. 1470 1.1400 Resistance: 1.1650 1.1740 1.1790

AUD/USD Commentary and Trade Ideas 

The main Australian banker kept the bank rate at 3% but hinted that a further reduction prior to the end of the year might happen unless conditions improve. This enabled the pair to rally back above the .80 level prior to a retreat back down into the med .79's. The COT futures report again confirms this market is loaded with large and small spec longs. Bull markets need near daily rations of bull news, and without that news there may some defections from tired longs. Prefer scalping from the short side on modest rallies and hope to catch a sell off to the .78 level.

Bias: Lower Bias Term: Medium Support: .7930 .7820 .7700 Resistance: .8010 .8100 .8200

NZD/USD Commentary and Trade Ideas 

As we meander sideways, after the three month rally, we wonder what is next. There are some very big bets placed in this market both on the long and the short side. At the moment we have no trading suggestions, though we are considering the short side of this pair.

Bias: Neutral Bias Term: Medium Support: .6300 .6240 .6170 Resistance: .6400 .6530 .6600

Published on  Tue, Jul 7 2009, 16:29 GMT

Global equity weakness helped the USD

Mon, Jul 6 2009, 18:01 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Currency fund managers reported that first half trading results were mixed as the trend followers failed, while the hit and run swing traders enjoyed some success. The last EURO trend was a good example, ending after about 15 days. After the NFP report. the enthusiasm for equities has abated taking the market south. The dollar bashing at the G8 meeting, has been minimal, so a combination of these two factors has caused the dollar bears to retreat. The pair is currently trading at 1.3910, having failed to hold support in the 1.3950 area. Even if equities stabilize later today, the EURO may have lost some friends and the thrill, for the moment may be gone. Traders can try to sell the 1.3950/1.40 area with a target in the 1.3700 range.

Bias: Lower Bias Term: Medium Support: 1.3890 1.3830 1.3770 Resistance: 1.3970 1.4050 1.4110

GBP/USD Commentary and Trade Ideas 

Finally the bear got a little satisfaction as they were able to take out the old support at 1.6200, selling off to the 1.61 area. Global equity weakness helped the USD and and plans by the Bank of England to expand quantitative easing by 25B were negative for the pound. This morning's market action was probably exaggerated by sell stops after a new low was printed, and once they have run their course a little bounce might be expected. Try to scalp the short side on a rally back into the 1.6260 to 1.6300 area.

Bias: Lower Bias Term: Medium Support: 1.6150 1.6090 1.5970 Resistance: 1.6270 1.6340 1.6450

USD/JPY Commentary and Trade Ideas 

This mornings sell off has blown through some previous support in the 95 area and is currently trading at 94.80. It remains to be seen if the global equities sell off will result in a major melt down or remain a modest correction after last quarters vigorous rally. Once the stocks show some stability we want to buy the pair, but think it is prudent to wait, and watch the events. A rally back in the 96.50/97 level seems possible. The US Treasury is auctioning 35B 3 year, 19B 10 year, and 11.B, 30 year bonds this week, all issues of interest to the Japanese. Their participation in this auction will probably mean they will use the current yen strength to buy some dollars.

Bias: Higher Bias Term: Medium Support: 94.60 93.90 93.00 Resistance: 95.20 95.80 96.90

 USD/CHF Commentary and Trade Ideas

Last week's recommendation to buy the pair in front of where we suspected the SNB might intervene was the right approach but we exited the trade prematurely. Currently we are trading at 1.0880 after checking out the 1,0950 area. Weaker equities are cited as the reason for the dollar's morning gains. We suspect this is mostly psychological, and would be surprised if the USD can muster a rally much past 1.10. Will stay on the sidelines but we are looking for a sell spot.

Bias: Neutral Bias Term: Medium Support: 1.0850 1.0760 1.0700 Resistance: 1.0940 1.1010 1.1180

USD/CAD Commentary and Trade Ideas

 With equities, crude and gold all trading lower, it is surprising to find the CAD so far today, holding steady against the USD. The early excitement did take the CAD to 1.1670 but it has since come back to the 1.1610 level. The dollar rally versus the CAD looks to be stalling, and somewhere in the 1.16 to 1.18 level I wish to be short the USD versus the CAD. Canada is willing to explore and develop their natural resources, while the US policies are designed to "save the world" and strangle the US economy.

Bias: Lower Bias Term: Long Support: 1.1530 1.1470 1.1400 Resistance: 1.1650 1.1740 1.1790

AUD/USD Commentary and Trade Ideas 

The AUD is grudgingly trading lower having briefly traded a little under .79 this morning before rallying back to .7925. As the economic news unfolds, the pending early recover seems to be a mirage. The entrenched longs in this market must be getting a little tired of the wait. Without some new bullish input, this market may be headed lower. Should the equity sale end, and this market mounts a little rally, look for a selling opportunity.

Bias: Neutral Bias Term: Medium Support: .7820 .7700 .7610 Resistance: .7950 .8010 .8100

NZD/USD Commentary and Trade Ideas 

The aging bull market is showing some signs that the party, though it may not be over, is calming down.  Without some bull news causing the market to print a new high, we look for some of the stale longs to hit the exists.  No current trading suggestions.

Bias:  Neutral  Bias Term: Medium  Support: .6300  .6240  .6170  Resistance: .6400  .6530  .6600

Published on  Mon, Jul 6 2009, 18:01 GMT

Daily Currency Outlook

Thu, Jul 2 2009, 17:31 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Unemployment in the Euro Zone and the US have reached a parity, both are now at 9.5%. The Euro's fret that the German short work week really disguises their true unemployment rate, while the real US unemployment is understated because private contractors, who replaced employees, are not accurately measured in the numbers. Equities are trading lower on the lack of positive economic recovery news and that is helping the dollar. The initial nudge to the USD in the overnight was positive comments about the future of the USD as the major reserve currency by the Chinese prior to the G8 meeting. What else can the Chinese say. Bad mouthing the dollar hurts the value of their dollar inventory, and a weaker dollar makes Chinese merchandise more expensive for the cautious consumer. This combination of events has taken the EUR from a 1.42 high late yesterday to 1.4020 this morning. We have spent time in this 1.40 level before during this abbreviated week, and there may be some entrenched longs, so further stops may be under the market. Still prefer the long side in the 1.3950 area.

Bias: Higher Bias Term: Long Support: 1.3970 1.3890 1.3830 Resistance: 1.4080 1.4190 1.4300

GBP/USD Commentary and Trade Ideas 

This pair has spent the better part of the last month in the 1.62 to 1.65 trading area. A brief visit to new highs this week was quickly repulsed, and we are now flirting with a downside retreat. Some of the short term moving averages have turned down.. UK economic news failed to confirm an imminent recovery, but we really have a less ugly contest as things are not that bright on this side of the Atlantic either. Perhaps the Chinese will put in a good word for the pound, but failing that this pair should probably be scalped from the short side.

Bias: Lower Bias Term: Medium Support: 1.6330 1.6260 1.6150 Resistance: 1.6450 1.6530 1.6670

USD/JPY Commentary and Trade Ideas 

This pair remains range bound between 95 and 97. It looks like selling of the yen earlier in the week, by funds investing in higher yielding areas outside of Japan, may have given us the dollar rally in this pair. We were able to get the pair sold at 96.75. Disappointing US economic news sent equities lower, helping the yen and taking us out at the 96 handle. Trading is a little easier if you can identify the type of market you are trading. Next week the US Treasury will hold an auction rumored to be 65B of 3, 10 and 30 year bonds. Prior to this auction we want to be a buyer of the dollar. In case they run a fire sale prior to a long weekend today, lets place some resting buy orders under the market in the 95.30 area.

Bias: Neutral Bias Term: Medium Support: 95.90 95.10 94.50 Resistance: 96.40 96.90 97.60

USD/CHF Commentary and Trade Ideas

It has been our preference to try the long side of this pair in the 1.07 to 1.0750 area. The market let us in, and we have since rallied to 1.0830. A SNB board member reiterated that the bank will intervene to prevent the appreciation of the franc. This gave us the initial bounce from the bottom. Poor US economic data sent stocks lower and the dollar higher. See no reason for a long term commitment with the Swissy so it is probably best to take the cash and rest for the weekend.

Bias: Higher Bias Term: Medium Support: 1.0760 1.0700 1.0610 Resistance: 1.0870 1.0920 1.1010

USD/CAD Commentary and Trade Ideas

 As we expected the USD found some friends versus the CAD under 1.15, and after some initial discomfort we have rallied above 1.16. Despite lower crude in response to the poor economic data, and lower equities I expect the CAD will find some friends in the 1.1630 to 1.1700 level. See no reason to carry a long USD short CAD over the weekend but would consider a short AUDCAD above .92

Bias: Neutral Bias Term: Medium Support: 1.1530 1.1470 1.1400 Resistance: 1.1630 1.1740 1.1790

AUD/USD Commentary and Trade Ideas 

This pair has moved under the 80 level prompted by poor US economic data and lower equities. Since the Australian economy has been projected to be one of the first beneficiaries of recovery this is not good news for the entrenched AUD bulls. This market has gone a long time without retracing. It is tempting to try the short side of the AUD, but it probably prudent to wait and see what develops next week. .

Bias: Neutral Bias Term: Medium Support: .7950 .7820 .7700 Resistance: .8010 .8100 .8190

NZD/USD Commentary and Trade Ideas 

The global equity sell off this morning may have snared the Kiwi, which is lower, trading a little under the 40 day moving average. Soft commodity prices may also be contributing to a weaker Kiwi. This pair is going sideways for a month after a a 3 month rally. There may be more selling if some of the longs get buyers remorse.

Bias: Neutral Bias Term: Medium Support: .6300 .6240 .6170 Resistance: .6400 .6530 .6600

Published on  Thu, Jul 2 2009, 17:31 GMT

Daily Currency Outlook

Thu, Jul 2 2009, 06:14 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Once again the pair is knocking on the door of the high ground above 1.41, and if we spend a little time consolidating the gains, there might be more. Forget the reason or the explanations for the move, markets often do what they do because they can. We are currently trading at 1.4120, and looking at the chart, there has to be stops above 1.4140.
In a report that receives scant attention, US Treasury receipts from economic activity in June of 2009 are estimated to be down in excess of 20%, hardly indicating we are one the cusp of a recovery. With the spend and tax people running Washington, the current mumbles about needing tax revenues will grow to a one hundred decibel din. In my opinion, this is not the path for a quick economic recovery from the former leader of the global economy. Perhaps the world will find a new leader. We have now cleaned out some of the stops and printed the new high on the move. In a holiday shortened week, anything can happen. Failure to hold the gains may result in a reversal day.

Bias: Higher Bias Term: Long Support: 1.4060 1.3970 1.3890 Resistance: 1.4160 1.4300 1.4400

GBP/USD Commentary and Trade Ideas 

Without fanfare the GBP did eke out a yearly high and then sold off over 300 points.
After 36 hours rest we are now climbing back and are currently trading at 1.6530. A couple economic reports in the UK showed inconclusive evidence of imminent recovery. The FTSE did trade better today. The pound has been on a long run to the upside, and some of the moving averages are stalling, approaching a crossover. However selling the pound means you are buying the dollar, Perhaps buying the EURGBP around the mid .8550 level, as an alternative to selling the GBPUSD has some merit.

Bias: Neutral Bias Term: Medium Support: !.6450 1.6310 1.6260 Resistance: 1.6530 1.6670 1.6800

USD/JPY Commentary and Trade Ideas 

Some Japanese economic reports came in a little worse than expected, but the market seems unconcerned. There was some excitement prompted by the increase in Chinese production, but there is no assurance they will be able to sell what they are producing.
On the theory that we will remain range bound, and the recent rally to 97 is temporary, we sold this pair at 96.75, with a stop at 97.60. Should the shortened holiday week bless us with a quick retrace to the downside, cover the short around 96.

Bias: Neutral Bias Term: Medium Support: 96.35 95.90 95.10 Resistance: 96.90 97.60 98.40

USD/CHF Commentary and Trade Ideas

It looks like traders are selling the USD off on the CHF, daring the Swiss National Bank to come and intervene again. We prefer the long side in the 1.07/1.0750 range which we hope is close enough to a point where fear of intervention will discourage selling. The EURCHF 1.50 level may be of more concern to the SNB than the USD so let's don't get too aggressive with this trade.

Bias: Higher Bias Term: Medium Support: !.0760 1.0700 1.0610 Resistance: 1.0830 1.0900 1.1010

USD/CAD Commentary and Trade Ideas

As we suspected yesterday the 1.1630 poised a high hurdle for the CAD. The pair is currently trading at about 1.1480. In retrospect a counter trend sell would have worked nicely. Yesterday a well respected currency commentator pointed out the commodity currencies often suffer seasonal losses in July. Seasonal trades work just fine......when they work, but in the past I always seemed to get involved in the years they did not work. Since the CAD has already taken a hit and the AUD remains unscathed perhaps the trade is to sell the AUD and buy the CAD. In the meantime look for the CAD under the 1.15 level to find some friends, and you can scalp accordingly

Bias: Higher Bias Term: Medium Support: 1.1470 1.1400 1.1330 Resistance: 1.1570 1.1630 1.1740

AUD/USD Commentary and Trade Ideas 

We remain stuck in a going sideways in the .80/.8150. There was a reduction in Australian building permits down by 12.5%. Though the AUD remains in an uptrend, the momentum has stalled, and we wonder if some may chose to exit the market and rest on the sidelines. A prominent adviser pointed out that commodity currencies often have a seasonal down in July. Since the CAD has already taken a hit we are considering selling the USD versus the CAD.

Bias: Higher Bias Term: Medium Support: .8020 .7950 .7820 Resistance: .8100 .8190 .8250

NZD/USD Commentary and Trade Ideas 

The NZD remains in an uptrend but the move has stalled. The small nation remains a most favored nation for commodity currency investments. No trade suggestions at the moment.

Bias: Higher Bias Term: Medium Support: .6400 .6350 .6240 Resistance: .6530 .6600 .6710

Published on  Thu, Jul 2 2009, 06:14 GMT

Daily Currency Outlook

Wed, Jul 1 2009, 06:55 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The Euro visited the high ground above 1.41 this morning, but briefly, and quickly headed south and is now trading at 1.4023. There have been some minor reports that conclusively prove the rate and intensity of the economic recovery is inconclusive. Manipulating market action today, on the last day of a very busy quarter for investments, is bound to occur. Some money managers are paid handsome performance bonuses based upon the quarterly closing prices. Equities and commodities are most vulnerable to this type of window dressing, but some managers also have big currency exposure and positions. How many millions does it take to push some of these markets around? Once a money manager gets his bonus, he does not have to give the money back if the market reverses tomorrow. I prefer the buy side of the Euro if given the opportunity in the 1.39/3950 area, but I am inclined to purchase only a one half unit today. Lower US consumer confidence does not help the dollar.

Bias: Higher Bias Term: Medium Support: 1.4020 1.3970 1.3890 Resistance: 1.4100 1.4160 1.4300

GBP/USD Commentary and Trade Ideas

The pound did briefly trade in new high ground for the year but has since retreated 300 points. The bull has been running for quite a while and this type of reversal action suggests he is tired. It looks like some longs have been stopped out, but there may be more if this is truly a key reversal. Try selling a return to the 1.65 level or scalp the short side. UK economic reports this morning were not inspiring, and equities have surprisingly turned lower. Fear that UK debt will soar to 200% of GNP, make some investors wary of parking money in the UK for any length of time.

Bias: Lower Bias Term: Medium Support: 1.6450 1.6310 1.6260 Resistance: 1.6510 1.6670 1.6800

USD/JPY Commentary and Trade Ideas

It has been my contentions for quite a while that the pair is trapped in a 95 to 100 trading range. It is too bad I discarded that approach for a couple of days because it happened again. The theory behind the weak yen is that global equities provide better returns than those in the moribund Japanese economy. This is the best quarter for stocks in many years but they are limping to the quarterly finish line today. Japanese unemployment was reported up to 5.2%, a little above the expected rate of 5.1%, while consumer spending in Japan was a little better than expected. If this rally continues in the USD versus the yen, look to sell in the 96.75 to 97 level, risking 100 points.

Bias: Higher Bias Term: Medium Support: 85.90 85.10 94.60 Resistance: 96.60 97.60 98.40

USD/CHF Commentary and Trade Ideas

The pair worked by down to the 1.08 levels in the aftermath of the shock therapy administered by the SNB. It looks like some dollar strength has carried the pair a little higher today, or perhaps end of the quarter positioning. Prefer trying the long side but at around 1.0750. Not sure there is any big opportunity here.

Bias: Higher Bias Term: Medium Support: 1.0840 1.0760 1.0700 Resistance: 1.0900 1.1010 1.1070

USD/CAD Commentary and Trade Ideas

We used the weakness to get long, but had to take a little heat prior to the rally up to the resistance in the 1.1630. Failure to spend any time above the 1.1630 level suggests it is time to take the sidelines. Crude prices are slipping but still in the high 60's, and equities are taking a little end of the month tumble. The COT reports shows the speculators are still long, however there are signs the rally from the low at 1.0750 may be slowing down. Stand aside for a while.

Bias: Neutral Bias Term: Medium Support: 1.1550 1.1470 1.1410 Resistance: 1.1620 1.1740 1.1800

AUD/USD Commentary and Trade Ideas

As this pair meanders sideways you wonder if the .8060 level is just about the right price. It was reported that sales of newly built houses were down 5.7% during the last month. It is surprising that there is such little trading activity today, the last day of the month.

Bias: Higher Bias Term: Long Support: .8020 .7950 .7820 Resistance: .8100 .8190 .8250

NZD/USD Commentary and Trade Ideas

This market checked out the overhead resistance above .65 again but has since backed off to .6450. The bull move seems to have lost momentum, but has not turned lower. No trading suggestions.

Bias: Higher Bias Term: Long Support: .6400 ..6350 .6240 Resistance: .6530 .6600 .6710

Published on  Wed, Jul 1 2009, 06:55 GMT

Daily Currency Outlook

Tue, Jun 30 2009, 05:42 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Last Thursday Chinese officials were talking about a "super sovereign" currency delinked from the economy of the issuer. This morning, another Chinese banker had a different story, and this firmed the dollar. PBOC governor Zhou Xiaochuan said that "foreign reserve policy is always quite stable, and they desire " liquity, safety, and returns." When your country has over one billion people, it is hard to speak with one voice. The market checked out the 1.40 level this am prior to the banker's comments and has since rallied, currently trading at 1.4050. This holiday shortened week combined with the absence of significant economic data, may give us illiquid volitile markets. In the Euro, look for extremes to go either way. Should we take out stops above 1.4130, look to sell a spike up to 1.4180. On Friday, the US House passed the "cap and trade" bill which would be the biggest tax increase in the history of the world if enacted. President Obama congratulated Spreaker Polosi on the passage, who called it a glorious step forward for man. The American press ignored the Congressional action, preferring to spend the endless weekend hours talking about the life and death of Michael Jackson. With US leadership like this, my preference is to own the Euro on a break in the vicinity of 1.3950

Bias: Higher Bias Term: Medium Support: 1.4020 1.3970 1.3890 Resistance: 1.4100 1.4160 1.4300

GBP/USD Commentary and Trade Ideas

Despite economic reports the recovery is feeble, the pound, currently trading at 1.6520, remains close to the yearly high. Bank lending to UK consumers declined and mortgage approvals showed no improvement. Perhaps UK consumers like those in the US. Why buy today when the price of real estate or consumer products will be lower tomorrow? Fear that this market will print a new high, has the bear wary. Perhaps the best trade is to hope the market makes a new high, and then stalls. UK fiscal problems continue with government debt headed toward 200% of GDP, hardly a recommendation for a strong pound. What will be the direction of the next 700 point move from current levels? Watch closely to see if this pair is close to a selling opportunity.

Bias: Lower Bias Term: Long Support: 1.6500 1.6430 1.6310 Resistance: 1.6570 1.6670 1.6800

USD/JPY Commentary and Trade Ideas

The yen weakened on the dollar early this morning to 95.50 but subsequently failed and is currently trading at 95.43. Last week the trade was lethargic with the pair lacking direction. In a holiday shortened week, there is little reason to expect a pattern change.
The daily chart looks like there may be some unfinished business to the downside, possibly approaching the 94 area. I chose to watch developments for a bit, cautioned by that old adage "Don't sell a quiet market."

Bias: Neutral Bias Term: Medium Support: 95.10 94.60 94.10 Resistance: 95.80 96.70 97.60

USD/CHF Commentary and Trade Ideas

After the jolt of last week's intervention by the SNB when the fanc weakened to about 1.10, we have since come back to 1.0840. With the threat of further intervention, there is a level where the spec will fear further interference from the SNB, The 1.0750 in this pair looks like an ownership level that has little risk. The EURCHF may be a better barometer for the central bank. It is rumored the 1.50 level for the EURCHF is the bank's line in the sand. In a thin holiday trade week anything can happen, so pick a number and have some resting orders.

Bias: Higher Bias Term: Medium Support: 1.0840 1.0760 1.0700 Resistance: 1.0900 1.1010 1.1070

USD/CAD Commentary and Trade Ideas

This seems to be an orderly trending market, now heading for higher ground following a pull back late last week. If the market is able to move past the 1.1630 level, 1.1740 would be the next target. Scalpers can try the buy side in the 1.1560 range with a 100 point stop. Despite the fact that crude is trading above 71 and equities are higher the CAD is losing this morning. Perhaps liquidation from the big spec long positions, as noted in the COT report, is fueling the rally in the futures.

Bias: Higher Bias Term: Medium Support: 1.1550 1.1470 1.1410 Resistance: 1.1610 1.1740 1.1800

AUD/USD Commentary and Trade Ideas

The AUD continues to meander sideways on both sides of the 80 handle. Investment continues to flow into Australia from Japan and other sources. There is not much new to report as it seems the Aussies continue to muddle through the recession. Resumption of Chinese production may be easier to restart then the resumption of consumer demand.
As the recession continues, are the spec and investment longs going to remain patient.

Bias: Higher Bias Term: Long Support: .8020 .7950 .7860 Resistance: .8100 .8190 .8250

NZD/USD Commentary and Trade Ideas

Low NZ interest rates are cited as a reason for the 3.5% increase in building construction for the May period. Trade surplus in May was also reported to be a record 858M, showing the NZ consumer is resting. We are currently trading around .65 but I have no trading suggestions.

Bias: Higher Bias Term: Long Support: .6400 .6350 .6240 Resistance: .6520 .6600 .6710

Published on  Tue, Jun 30 2009, 05:42 GMT

Daily Currency Outlook

Mon, Jun 29 2009, 07:21 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The Chinese called for a "super sovereign" currency and said they " need a new currency delinked from the economies of the issuers." You can forget about the GDP, CPI, PPI reports of up or down 0.5% versus what was expected, or surveys about the intensity of warm fuzzies regarding future economic activity, this comment is important.  Somebody better find Sec.Geithner and let him know there may be a problem.  Currency traders did note and the dollar has retreated on almost all fronts. The euro seems fairly confortable trading above 1.40, so perhaps it will get some legs.  Meanwhile in Washington, the leadership of elitists from California and Massachusetts,with the tutelage of Al Gore and  blessings from President Obama has produced a bill to tax and slow climate change. Nevermind the earth's climate has been changing for at least 100 million years, the Pelosi, Waxman, and Markey group has the answers. The WSJ calls it the most expensive tax bill in the history of the world. The carbon tax would increase the cost of all business activity.  It would shift the oil refinery business offshore, causing us to import more oil and further weaken the dollar. The American Petroleum Institute estimates the cost of gasoline would increase by .77 cents per gallon, which of course stimulates demand for the Government Motors  "green cars." Passage and implementation of this bill would be disaster for the US economy and the dollar. Are traders watching?

Bias: Higher  Bias Term: Medium  Support: 1.4030  1.3970  1.3890 Resistance: 1.4100  1.4160  1.4300

GBP/USD Commentary and Trade Ideas

Yesterday this pair flirted with the 1.62 support, and then turned higher seemingly on pound merits rather than Chinese invoked dollar fear. Currently we trading in the 1.65 area, toward the higher end of the trading range for the past 15 days. The Bank of England Governor King and Treasury Sec. Darling continue to have policy disputes, as banker King says the UK economy is likely to remain mired in a recession. The weekly candlestick sometimes precedes a market reversal, but shorting this pair has not been a profitable approach for quite a while. Stand aside for the weekend.

 
Bias: Higher  Bias Term:  Medium  Support: 1.6400  1.6310  1.6190 Resistance: 1.6500  1.6570  1.6670

USD/JPY Commentary and Trade Ideas

The rally of the dollar versus the yen faltered after trading a little above the 96.40 area.  The Japanese CPI was down 1.1%, the worst in 7 years, as the recession continues. Chinese comments questioning the soundness of the dollar, as a reserve currency helped push the pair back down in the low 95's. A Japanese fund was launched this week which directs investments overseas to higher yielding currencies. Such capital movement from Japan will likely provide support on further yen strength. Look to buy the pair on further weakness under 95.

Bias: Higher  Bias Term: Medium  Support: 95.10   94.60   94.10    Resistance: 95.80  96.70  97.60

USD/CHF Commentary and Trade Ideas

A business survey revealed a modest improvement of Swiss business confidence this morning, but most of the strength versus the dollar, was likely reaction to the negative Chines dollar concerns. Currently we are trading at 1.0860. The fear of further meddling by the SNB puts a floor in place around 1.0700, so ownership in the 1.0750 looks enticing. Fear of general dollar weakness make me want to wait until Monday for another assessment.

Bias: Neutral  Bias Term:  Medium  Support: 1.0840  1.0760  1.0700  Resistance: 1.0930  1.1010  1.1070

USD/CAD Commentary and Trade Ideas

The rally back to 1.1700 seems to have fallen short at 1.1630 and change. The CAD seems to get it's footing versus the dollar responding to better commodity prices, prior to the assistance from the Chinese. It looks like the rally of the USD versus the CAD may have ended. If so, nimble traders can scalp the extremes, but it may be best to see what the weekend brings.

Bias: Neutral  Bias Term: Medium  Support: 1.1470  1.1410  1.1330  Resistance: 1.1560  1.1610  1.1740

AUD/USD Commentary and Trade Ideas

The AUD continues to meander sideways on both sides of the .80 handle. There are reports that Japanese capital is continuing to flow into Australia helping that currency. While those in Washington are about to pass a carbon tax that will transform the US economy into that of a developing nation, the Australian Parliament is about to kill their own carbons emission scheme. Perhaps the Australian bulls have this one right, although with so many, will not be some defections. Perhaps there will be a better opportunity to enter the long side next week.

Bias: Higher  Bias Term: Long  Support:  .8020  .7950  .7860 Resistance: .8100  .8190  .8250

NZD/USD Commentary and Trade Ideas

The NZ gross national product contracted by 1% in the latest reporting period, worse that the 0.7% forecast. None the less, the Japanese report continued investments into this small economy. No trading suggestions.

Bias: Higher  Bias Term:  Long  Support: .6400  6350  .6240   Resistance: .6520  .6600 .6710

Published on  Mon, Jun 29 2009, 07:21 GMT

Daily Currency Outlook

Fri, Jun 26 2009, 05:38 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

This week's action thinned the ranks of traders and experts alike. In the old days, prior to electronic trading, this type of action was a deck cleaner. The trade clerk or brokers assistant, who held all the limit and stop orders for the pit broker, would start the week with a hundreds of orders and end up the week with practically none. The FOMC story that hinted that the worst is over and economic recovery is imminent, was disputed by the man that sees reports on 70 companies, Warren Buffet. He said the economy is in "shambles" with no sign of recovery. The US GDP was improved to a minus 5.5% in the first quarter from the previously projected 5.7%, but the initial jobless claims numbers were higher than expected. It is hard to believe that the US is on the road to recovery when California is lurching toward bankruptcy, and Al Gore is going to Washington to testify in favor of the economically disastrous global warming bill. My pessimism makes me want to cautiously own the Euro, but at my price, around 1.3800, and probably a half a unit.

Bias: Higher Bias Term: Medium Support: 1.3890 1.3800 1.3750 Resistance: 1.4000 1.4100 1.4160

GBP/USD Commentary and Trade Ideas

This morning Ahmadinejad called on President Obama to express regrets for our President's recent comments about Iranian behavior. Old Friedrich Nietzsche figured it our years ago.."might is right". With the outcome of the Iranian struggle looking resolved, some of the Mid East hot money may be heading home causing the pound to sink. That was the story in the London session. The 1.6350/64 level provided little support and we are now flirting with the 1.6200 support. Since this seems to be volatility week, I will be surprised if we do not violate that level. The bold can try to scalp from the short side with appropriate money management.

Bias: Lower Bias Term: Short Support: 1.6230 1.6190 1.6040 Resistance: 1.6350 1.6450 1.6570

USD/JPY Commentary and Trade Ideas

We have felt the 95 level would prove support, and this proved to be the case. The pair may have more to run but prudence says move your stop up or take profits prior to the weekend. For the 7th week in a row Japanese investors bought more overseas securities than they sold. Japanese exporters, whose business has been slack, want a weaker yen so a trade in the 97 area would not be a surprise. Reports later in the day will indicate the level of Japanese economic activity.

Bias: Higher Bias Term: Medium Support: 95.99 94.60 94.10 Resistance: 96.70 97.60 98.40

USD/CHF Commentary and Trade Ideas

How do you play the game when deep pockets is sitting at the table, playing his cards in an unpredictable fashion? The announced desire of the SNB is a cheaper franc, which makes the repayment of toxic loans to Swiss Banks easier. The Euro central banks yesterday loaned 500B euros for one year to assist cash strapped banks. Who is there to loan the Swiss banks money? What if Mid East hot money had been moving into Switzerland, fearful of the Iranian situation, and is now going to stop coming in? Maybe the SNB has it right and the franc was too high. Would look to buy this pair on a pull back.

Bias: Higher Bias Term: Long Support: 1.0870 1.0760 1,0620 Resistance: 1.1010 1.1070 1.1170

USD/CAD Commentary and Trade Ideas

The daily charts portray the CAD as a trending market, first down and now back up. When the CAD was going up versus the dollar, the sponsors touted they had oil, energy, gold, and wheat. The focus now, I guess, is on inefficient GM and Chrysler plants. This pair looks like it is headed back to the 1.1700 area. Use weakness to scalp the long side.

Bias: Higher Bias Term: Medium Support: 1.1550 1.1460 1.1410 Resistance: 1.1620 1.1740 1.1900

AUD/USD Commentary and Trade Ideas

Reports that the Chinese stockpiling of commodities is going to stop, and they are to deplete inventories, so far is not a concern of the Aussie bulls. This is a market that is loaded with spec longs. Unless we feed the bull at regular intervals, this market is vulnerable to bouts of liquidation.
Prefer to trade this pair from the short side.

Bias: Lower Bias Term: Medium Support: .7950 .7860 .7800 Resistance: .8025 .8100 .8250

NZD/USD Commentary and Trade Ideas

NZ reported that the current trade deficit was reduced because imports were down 21%. This bull market is aging. No trading suggestions.

Bias: Neutral Bias Term: Long Support: .6400 .6350 .6240 Resistance: .6430 .6520 .6600

Published on  Fri, Jun 26 2009, 05:38 GMT

Daily Currency Outlook

Tue, Jun 23 2009, 05:54 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Great news for FOREX traders. In a recent survey of experts, the forecast for the year end price of the EURUSD could be 1.16 or 1.55 depending on your choice of the experts. Maybe we could really have some fun, going to 1.16 and then to 1.55.  Currently we are selling off, trading at 1.3840.  The pattern of lower highs seems in place.  The market has some concerns.  Equities valuations, especially those in Europe have become pricey, making some wonder if the future economic recovery has not been priced into the market.  And in case you missed this, two third's of George Bush's axis of evil, is underwhelmed with the new administration's offerings of dialogue.  Iran, instead chose to ignore election results, and butcher their own.  South Korea is apparently busy assisting Iran in her nuclear program, and threatening to send a few missiles with nuclear war heads our way.  Kim Jon Il was reported to be especially fond of a previous Sec.of State, Madeline Albright.  Perhaps if she were dispatch back to Pyongyang sporting her finest boots and mini shirts she could calm the little guy down.  It looks like this market should be scalped from the short side to see if we can now make a new low on the move.

Bias:  Lower  Bias Term:  Medium  Support: 1.3820  1.3750  1.3660  Resistance: 1.3890  1.3950  1.4050

GBP/USD Commentary and Trade Ideas

This pair has been hard on the sellers since it started it's upward climb back in March, but maybe it will be different this time.  There was some negative economic news released over the weekend.  Retail sales were forecast to be up 0.3% but came in down 0.6%, and housing prices in the UK dropped a modest 0.4% after four consecutive monthly gains.  Currently the pound is making a morning comeback trading at 1.64 on a rally back from 1.6360 and change. Try the short side if the rally continues back to 1.640 risking 100 points.

Bias:  Neutral  Bias Term:  Medium  Support: 1.6350  1.6290  1.6150  Resistance: 1.6329  1.6500  1.6620

USD/JPY Commentary and Trade Ideas

The yen has gained a bit on the dollar this morning selling off a little under 95.75.  Turbulent political conditions in N. Korea and Iran, combined with weaker equities has caused some yen demand.  The pair has sold down into some support, and a level where we are inclined to own.  Will the higher rates for US Treasury notes at the auction this week attract some Japanese buyers?  Commercials have become large longs in the futures market which of course is a short dollar position. However, we still prefer the long side of this pair at around current levels.  The trading range has been 95 to 100 and we are closer to the range bottom.

Bias:  Higher  Bias Term:  Medium  Support:  95.40  94.60  94.10    Resistance: 96.70  97.30  98.50

USD/CHF Commentary and Trade Ideas

The SNB will keep rates unchanged and intervene if necessary to keep the franc from appreciating.  If the intervention threat is real why not try the buy side of the dollar on weakness, down into the 1.0750/1.08 area.  The SNB also says they will buy Swiss bonds thereby increasing the money supply and devaluing the currency.  The daily chart looks like a bottom is in, but the shorter period charts look more like a choppy random walk.

Bias:  higher  Bias Term:  Long  Support: 1.0780  1.0710  1.0620  Resistance: 1.0880  1.1090  1.1100

USD/CAD Commentary and Trade Ideas

All the potential inputs to the the Loonie seem to have turned negative at once. After the experts began touting the bull side of the crude market, that market turned south and is now trading under $67, gold like most commodities is lower, and equities are selling off.  A report this morning did show that foreign investments of 9.05B dollars in the last reporting period did exceed expectations.  This capital inflow was helpful to the CAD when it was happening but is now merely recent history.  We sensed the market was turning when it traded at about 1.1090 easing out of the downward channel.  The market looks like it has some more to go, maybe up the 1.1750 resistance.  An ideal buy spot would be 1.1410 but the market may be too strong to let you in there.  The COT futures report showed the specs were big CAD longs and their long liquidation may be carrying this pair higher.

Bias:  Higher  Bias Term:  Medium  Support: 1.1430  1.1360  1.1.1310   Resistance:  1.1550  1.1740  1.1900

AUD/USD Commentary and Trade Ideas

International political turmoil combined with lower commodities and equities has caused the AUD to take a dive this morning.  The macro commodity currency story has been on the best seller list for quite a while.  In the futures markets the spec has acquired a massive 45,400 of long contracts.  Should some of these longs exit at the same time the result will not be pretty.  Scalp this one from the short side with appropriate stops.

Bias:  Lower  Bias Term:  Medium  Support: .7910  .7860  .7710  Resistance:  .7980  .8040  8100

NZD/USD Commentary and Trade Ideas

This pair has retreated very little from the highs made earlier this month.  The commodity/inflation story has been told so many times it is becoming a fable.  Commodity prices, however, are faltering.  This morning we have backed off to about .63, where the pair might find some support.  Have no opinion what to do.

Bias:  Neutral  Bias Term:  Medium  Support: .6240  .6190  .6090  Resistance: .6480  .6520  .6600

Published on  Tue, Jun 23 2009, 05:54 GMT

Daily Currency Outlook

Fri, Jun 19 2009, 17:02 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The US Treasury announced a record 104B of 2, 5 and 7 year notes would be auctioned off next week providing a bi weekly injection of cash so the record 1.8 Trillion Dollar deficit can be achieved.  Plans for the expansion of the government health care, costing another 1 to 3 trillion, will soon received massive promotion from the government toadies in the media.  Opposing views are not welcome and those voicing them can expect personal retribution. Continuing in the same vein the Washington spendthrifts inserted in the military spending bill, a cash for clunkers program, designed to stimulate demand for the US Government Green Car Companies.  With economic policies like these, is it any wonder that the BRIC countries want an alternative reserve currency?  Currently the euro is trading at about 1.2930, down 20 points from yesterday's morning level.  The H4 chart appears to be coiling in a triangle, while the daily chart picture looks like a flag or pennant.  There is very little here that makes me want to assume a new position.  Without some new inputs, the next move may be determined by who wants out of the market.  Stand aside.

Bias:  Neutral  Bias Term:  Medium  Support: 1.3890  1.3820  1.3750  Resistance: 1.3950  1.4050  1.4140

GBP/USD Commentary and Trade Ideas

Volatility was the feature of the pound this week as 200 point swings were frequent, but the price action for the week was trend less.  After a long bull move, this type of action sometimes precedes a market reversal.  If we close at around the 1.64 level, the weekly candlestick would portray a 'hanging man' which again often precedes a change of marker direction.  The daily charts, however, shows a market firmly in a bull trend.   There have been some reports showing the UK economy is improving slightly, but auto production was reported lower for the 8th consecutive month.  If I had to make a trade today my preference would be to sell the pair close to 1.6500.                

Bias:  Neutral  Bias Term:  Medium  Support: 1.6350  1.6290  1.6150  Resistance: 1.6420  1.6500 1.6620

USD/JPY Commentary and Trade Ideas

Now that global equities have become the new safe haven, who need the yen?  We remain in the 95 to 100 trading range, and are currently trading at 96.70.  The Japanese are the second largest owners of US Treasuries, so will we see some yen selling in preparation for the pending US auction?  Earlier this week a Japanese Economic official at the G20 meeting said he saw no reason to stop buying US debt which is now permitted as collateral for Japanese loans.  We prefer the buy side if given the opportunity, at a little under the 96 level.

Bias:  Higher  Bias Term:  Medium  Support: 96.00  95.40  94.60  Resistance: 96.70  97.30  98.50

USD/CHF Commentary and Trade Ideas

It was reported that the Swiss officials have reached an agreement with the US, on the auditing of US citizens with investments in Switzerland.  Swiss Central Bank Officials confirmed yesterday that they will interfere if the franc trades under 1.50 to the Euro.  Will they likewise try to weaken the franc to the dollar, or is that too big of a task?  This pair seems sedate, currently trading around 1.0830.  I hate to initiate new trades on a Friday but I would be a buyer if the market sold off close to 1.07.

Bias:  Higher  Bias Term:  Medium  Support: 1.0780  1.0710  1.0620  Resistance: 1.0880  1.0990  1.1100

USD/CAD Commentary and Trade Ideas

Stats Canada reported retail sales this morning, far lower than anticipated which suggests the economic recovery to date is weak.  The report caused a 50/60 point drop to the USD, but that has since dissipated, and we are back where it all began at 1.1295.  Equities and crude are trading better this am but most commodities are trading lower.  There is nothing that makes me want to trade this pair right now, so I am going to stand aside.

Bias:  Higher  Bias Term:  Long  Support: 1.1190  1.1130  1.1020  Resistance: 1.1360  1.1440  1.1560

AUD/USD Commentary and Trade Ideas

The higher rates of Australia and NZ continue to attract the international hot money has been reported in financial paper. One advisory service said the currency may be ahead of itself and it need to wait for the fundamentals to catch.  That view is not shared by today's participants as we are back up in the vicinity of .81.  Unless we have constructive  news of more business activity, I would expect the market to stall.

Bias:  Neutral  Bias Term:  Medium  Support: .8925  .7915  .7800  Resistance: .8220  .8350  .8490

NZD/USD Commentary and Trade Ideas

This pair took out the dual highs at about .6415, this morning, apparently  hit stops, and ran the market up to .6480.  The inflation/commodity story has been told many times, but profits from commodities can be very illusive.  The Kiwi has sold off very little from the high made in early June, so maybe we can print another new high, however I choose to watch.

Bias:  Higher  Bias Term:  Medium  Support:  .6350  .6240  .6090 Resistance: .6520  .6600  .6700

Published on  Fri, Jun 19 2009, 17:02 GMT

Daily Currency Outlook

Fri, Jun 19 2009, 05:34 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Overnight news is sparse, and this pair is hanging out around 1.3950.  We did have an unemployment report this morning that showed a drop of people on unemployment by 148,000, the most in 7 years. With so many people no longer employees, but rather are independent contractors, how accurate are the numbers? Further, does an independent contractor ever become unemployed, or does the size of his checks merely diminish or stop?  Where does his status show up in the unemployment reports? Equities are mixed to lower this morning, and we have even uncovered some skeptics questioning the price projections of the crude oil bulls.  Results of economic change are delayed until the consumer reacts and the market assimilates the new information, but the doubling of crude oil prices in 2009 will take it's toll, delaying and or weakening US economic recovery.  Since printing the high of 1.4338 on 06/03 the market swings have given us a couple lower lows followed by lower highs.  Prefer to try the short side of this pair with appropriate stops to see if the patter continues and takes us down to the 1.36 level.

Bias:  Lower  Bias Term:  Medium  Support: 1.3820  1.3750  1.3530  Resistance: 1.3950  1.4050  1.4140

GBP/USD Commentary and Trade Ideas

The pound had just climbed back from the previous day's sell off when some bad UK data took it's toll.  In a move that makes the pulse rate of the margin clerks quicken, we dropped from about 1.64 to 1.62. Once more the pound has commenced the climb back, and is currently around 1.63. UK retail sales were down 0.6% from last month and 1.6% from last year. The public sector was a large borrower while fewer loans were made to the private sector. Is public financing now crowding out the private sector. Increased volatility after a long sustained move is often behavior topping action, but this market seems to have eyes for my stops.  My preference is to scalp from the short side on strength

Bias:  Neutral  Bias Term:  Medium  Support:  1.6290  1.6150  1.5950  Resistance: 1.6390  1.6500  1.6620

USD/JPY Commentary and Trade Ideas

Since the 1st of March this pair has been stuck in a trading range between 95 and 100. We are currently trading at 96.15. The perception that the global equities market is recovering has enticed the Japanese savers to move their money to higher yielding countries. This results in periodic weakness of the yen as the money flows abroad.  This market acts like it has lost it's downside energy, finding some support in the 95.70 area.  Try to buy this pair in the 95.75 area, risking 100 points. 

Bias:  Higher  Bias Term:  Medium  Support: 95.40   94.60  94.10 Resistance: 96.50  97.30  98.50

USD/CHF Commentary and Trade Ideas

Central Bank officials said they will let the franc appreciate against the Euro, and you would assume also strengthen against the dollar. We are currently trading a little above 1.08. For the last couple of weeks we have been trading in the 1,06 to 09 range.  Failure to make any significant progress to the upside, above 1.10, leads me believe the SF is headed by down to 1.06, with just a hint of dollar weakness. If force to trade this pair I would be looking to sell close to the 1.09 level,

Bias:  Lower  Bias Term:  Medium  Support:  1.0780  1.0710  1.0620 Resistance: 1.0880  1.0990  1.1100

USD/CAD Commentary and Trade Ideas

The support anticipated in the 1.13 to 1.1350 level failed to contain the USD's slide on the CAD, and we are currently trading at 1.1250.  Both equities and crude are a little better this am which help the loonie. The Canadian core CPI released this morning was up 0.4%, higher than the 0.1% anticipated. The weakness in this currency is more than I anticipated, so I had best regroup and see what tomarrow brings.

Bias:  Neutral  Bias Term:  Medium  Support: 111.90  111.30  1.1020  Resistance: 1.1360  1.1440  1.1560

AUD/USD Commentary and Trade Ideas

Yesterday's feeble attempt to sell down under the low of .78269, was contained and we have subsequently rallied back above .8920. It looks like this bull move has not died, but merely gone dormant. US leading indicators rose more than expected in a newly released report, but this has failed to boost the dollar. This chart still looks like there could be some move to the downside, but the market is not cooperating.

Bias:  Neutral  Bias Term:  Medium  Support: .7915  .7800  .7690  Resistance:  .8040  .8220  .8350

NZD/USD Commentary and Trade Ideas

The bull has been awakened and taken the pair back up above .64 this morning. This market has sold off very little since the high of .6592 made on June 2, 2009. The inflation/commodity story has been told many times, but profit from commodities can be very elusive. Not sure what to do with this pair, so I will stay on the sidelines and look for opportunity elsewhere.

Bias:  Neutral  Bias Medium:   Support:  .6350  6240  .6090 Resistance: .6420  .6520  .6600

Published on  Fri, Jun 19 2009, 05:34 GMT

Daily Currency Outlook

Thu, Jun 18 2009, 06:44 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Economic reports from both side of the Atlantic confirmed that business activity is lagging. The Euro exports were 1.3%less than March, and down 26$ to the UK and 21% to the US from year ago. The US current account at -101B was less than last year and less than expected in thisperiod. After the Monday morning swoon, the Euro  has pulled itselftogether. Currently we are trading at 1.3870, up from yesterday's low of1.3748. Euro stocks down for the 4th day in a row, while the US Sand P500 index is flirting with the 200 day simple moving average. If lower equitieshurt risk appetite, this should help the USD. The recent stock rally,alleged to be a bear market rally by some, has made some money for a lot of no uveau  investors who may hit the exits should the market fail. Ifthe pattern of lower highs and lows continues, selling the Euro at around1.3950 is worth a shot. Place the stop at 1.4060 with a tp of 1.3650.

Bias :  Lower  Bias Term :  Medium  Support :1.3820  1.3750  1.3530  Resistance : 1.3940 1.4050  1.4140

GBP/USD Commentary and Trade Ideas

This pair was working higher until the Bank of Englandannounced that business condition had not significantly improved and they wouldproceed with further quantitative easing. This announcement seem to causethe plunge from 1.6482 to 1.6220. We are currently trading at 1.6310 asthe recovers. The FTSE Index of UK stock Yesterday was the lowest since May 4 2009. The longer trend remains firmly to the upside, but unless wesoon print a new high, the chance of a sell off back under 1.5800 areincreasing. It may be best to back off today and see what happens in thenext 24 hours.

Bias :  Higher  Bias Term :  Long  Support : 1.6290  1.6150  1.5950 Resistance : 1.6390  1.6500 1.6620

USD/JPY Commentary and Trade Ideas

 It looks like the loss of the yen to the dollar mighthave some more room to work to the down side, perhaps to the 94/5 area. Currently trading at 95.90, this market has already made a good portion of themove, so I would wait to see if we can get a little rally from here tosell. A Bank of Japan economic assessment expressed optimism that theworst of the recession is over. Exports and factory output areimproving. My sell ideas are in the vicinity of 97 which is toorich, so I will watch at this time.

Bias :  Lower  Bias Term :  Medium  Support : 95.00   94.10  93.50    Resistance :96.50  97.30  98.50

USD/CHF Commentary and Trade Ideas

A modest increase in Swiss retail sales, up 1.2%, and a 9.7%increase is economic expectations has failed to provide much enthusiasm for the franc. It did gain on the Usd from 1.0920 down  to about 1.0850 andis now trading at 1.0860. The daily chart looks like it is coiling for abreakout move above 1.0925 or below 1.0830. Nimble traders can monitorclosely and scalp with the direction of the breakout.

Bias :  Higher  Bias Term :  Long  Support :1.0780 1.0710 1.0620  Resistance : 1.0880 1.0990 1.1100

USD/CAD Commentary and Trade Ideas

The CAD has suffered a triple whammy with equities, crudeand gold prices all retreating  during the past few sessions. We arecurrently trading at 1.1396, close to our original recovery target of 1.14 to1.15. Canadian leading index and wholesale sales reports were a littlebetter than expected, reflecting stabilized market conditions. While Ifavor the CAD weakening further to the dollar, the fear of an army of crude oilbulls and gold bugs, who would help and favor the CAD, make me wary. Never the less there is some support in the 1.13 to 1.1350 area where you canprobe the long side.

Bias :  Higher  Bias Term :  Medium  Support :1.1300  1.1190  1.1130  Resistance : 1.1390  1.14401.1560

AUD/USD Commentary and Trade Ideas

This market is showing some signs that the bull move may beending. If the market closes under the apex of the reverse head andshoulders, there will be some technical and spec selling. The Australianleading index turned higher for the second month in a row giving bulls someencouragement. Not sure how much the recent weakness in the AUD is really USdollar strength, but this can change in a hurry. I would be a careful seller ofthis market.

Bias :  Neutral  Bias Term :  Medium  Support :.7915  .7800 .7690  Resistance : .8000 .88075 .8220

NZD/USD Commentary and Trade Ideas

This pair has calmed down and seems to be goingsideways. Perhaps the .6300 level is the right price. The NZD hadbeen bought by those that think a deflated value of the US dollar will benefitthe Kiwi because commodity prices will increase. Commodity index funds,which measures commodity prices, has appreciated, but they now seem to belosing momentum, and so does the Kiwi. At the moment the only convictionI have is I do not want to buy the Kiwi, but I am not certain I want to sell iteither. 

Bias :  Neutral  Bias Term :  Medium  Support :.6240  .6090  .5890  Resistance : .6320 .6420  .6520

Published on  Thu, Jun 18 2009, 06:44 GMT

Daily Currency Outlook

Wed, Jun 17 2009, 06:03 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

What a difference a day makes. Yesterday, at thistime, the pair was at the cusp of a downward plunge that took us under oldspike lows and elicited stops under 1.3800. This morning we are crawlingback, perhaps in response to higher oil and equities, and currently trading at1.39. It remains to be seen if the pattern of lower highs and lows continues. A close on the hourly or H4 above 1.40 would be needed for confirmation of atrend change. Russia is hosting representatives from the BRIC countries at a town calledYekaterinburg which is located in the Urals.  Since a weaker dollargenerally means stronger crude, and oil is key to the Russians economicstrength, a little dollar bashing from Yekaterinburg might be expected. Try the short side of this pair in the 1.3940 to 1.3990 level with stops 100up. The US Fed, in it's open market operations, is trying to keep a lidon rates, buying government paper. Next week they will turn sellers, andagain auction an undisclosed amount of 2, 5, and 7 year notes. There isno shortage of people wanting to borrow money, but the US Treasury is thebiggest.

Bias :  Lower  Bias Term :  Long  Support :1.3820  1.3750  1.3530  Resistance :  1.3940 1.4050  1.4140

GBP/USD Commentary and Trade Ideas

The retreat from last week's highs around 1.66 has not beensignificant. When this market does sell off, it grinds to the downside,but on a turn about back up, it sprints.
Market action makes me want tobuy this pair. We are currently trading at about 1.6400. Try to buya pullback to 1.6340 risking 100 points. The UK reported a 2.2% increase in theCPI this morning.  The Brits successfully sold 7 billion pounds of 25 yeargilts, as part of the 220B pounds needed to pay for the year's deficit. Ashortage of corporate profits and a lack of bank financing means the privatesector needs to aggressively issue bonds to cover operating expenses and debtservice. Will there come a time when the private sector is crowded out by thepublic borrowing needs, in either the US or the UK ?

Bias :  Higher  Bias Term :  Long  Support : 1.6340  1.6290  1.6150 Resistance : 1.6390  1.6500 1.6620

USD/JPY Commentary and Trade Ideas

There are often days when market orders work a lot betterthan limit orders. Yesterday was one of them as our 98.20 sell remainedunfilled, as we sadly watched a 200 point break from the bench. Thismorning we had a 120 point rally from the low, but have subsequently sold backdown to .96.60. The frequency of hourly ranges exceeding  20 pointsmakes me think there are some big players pushing the market around. Thelatest COT report exposed commercials flocking to the long side. Sincethey have more information and a lot more money than I, it is best to tradewith them. Try to sell the 97 level risking 100 points with a target downto the 95. level

Bias :  Lower  Bias Term :  Medium  Support :96.50  95.90  95.00  Resistance :  97.30 98.50  99.50

USD/CHF Commentary and Trade Ideas

It looks like this market is reluctantly ending it's downtrend,albeit without a lot of vigor. This morning we have fallen from arecovery high of 1.0955 to the current level of 1.0835. If the marketsells off to 1.0785 try the long side, risking 100 points. Perhaps Switzerland 'sattitudes are bolstered by the increased optimism of the neighboring Germansbut problems in the tourist and banking industries persist.

Bias :  Higher  Bias Term :  Medium  Support :1.0780  1.0710  1.0620  Resistance :  1.0880 1.0990  1.1100

USD/CAD Commentary and Trade Ideas

This morning the CAD sold off to the 1.1220 level briefly,and then quickly rallied over 100 points to 1.1345. We are currentlytrading lower versus the dollar at 1.1310 despite higher crude pricestoday. Prefer to be long the USD for the moment in this pair, but I amnot bullish enough to buy at any price. My price order to buy is around1.12, but I'm inclined to wait to see future developments.

Bias :  Higher  Bias Term :  Medium  Support :1.1280  1.1190  1.1130  Resistance : 1.1390 1.1440  1.1560

AUD/USD Commentary and Trade Ideas

This pair seems to be going with the flow. Yesterdaywas a bull USD day and the AUD took a tumble, only to reverse back to theupside today, trading currently at 79.95. While the trend lines to theupside remain in place, the market has lost it's upside momentum. It willbe interesting to see if the pair can again trade above to 80 level, or are wegoing to liquidate and sell off. The crowd is long but they also have theprofits.

Bias :  Neutral  Bias Term :  Long  Support :.7915  .7800  .7690  Resistance : .8000 .8075  .8220

NZD/USD Commentary and Trade Ideas

There is not much new in this pair. After the Mondayglobal appreciation of the dollar taking the Kiwi down to a little under .6240,we have since recovered to .6350. The recent sideways pattern hasresulted in a cross over of the 9 versus the 18 day simple movingaverage. I would rather be a seller rather than a buyer...just not surewhere.

Bias :  Neutral  Bias Term :  Long  Support :.6310  .6240  .6090  Resistance :  .6350 .6420  .6520

Published on  Wed, Jun 17 2009, 06:03 GMT

Daily Currency Outlook

Tue, Jun 16 2009, 05:58 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Last week's failure at higher levels was a precursorof Sunday night's 150 point sell off from high to low.  Global equitieshave sold off for the second day in a row. The European DJ 600 was down1.6%, and the PE ratio for that index is a lofty 25.4. Plans for thereversing stimulation was discussed at the G20 meeting, but the consensusseemed to emerge from the meeting that the recovery is a lengthy road, and wehave more miles to travel. The IMF was less diplomatic, merely statingthe worst is not over. Weaker equities, oil, and other commodities havebeen cited as reasons for the strength of the USD, but both the Japanese andthe Russian finance ministers had reassuring words about the status of thedollar as a reserve currency. The COT report showed that the commercialsaggressively reduced longs and increased shorts during the early month run up,leaving this market vulnerable to spec liquidation. The market for thispair has been sold pretty hard, currently trading at 1.3870. Prefer toscalp the short side, but would be more comfortable if able to get sold in the1.3930 area.

Bias :  Lower  Bias Term :  Medium  Support :1.3820  1.3750   1.3530 Resistance : 1.3950 1.40.50  1.4140

GBP/USD Commentary and Trade Ideas

The bull move in this pair has been going on since earlyMarch with only a few interruptions. The daily chart looks like it may betrying to print a double top, but the jury is still out. A weekend surveyof the Confederation of British Industries dispelled notions that the recoverywas upon us as they forecast the current quarter will report a diminution ofthe GDP by 0.3%. Unemployment is estimated to grow to 9.6% in the samequarter. Tomorrow the UK Treasury well sell 5 millions pounds of debt to pay for the currentdeficit. I'm not quite sure how to approach this pair. If you waitto sell strength, the level of the pair would be precariously close to the oldhighs where there would certainly be stops, and if you sell weakness you are buckinga solid uptrend. Stand aside.  Sometimes the key to making money isnot losing it.

Bias :  Neutral  Bias Term :  Medium  Support :1.6340  1.6290  1.6150  Resistance :  1.6390 1.6500  1.6620

USD/JPY Commentary and Trade Ideas

This morning the USD is gaining against most currencies, butit is losing to the JPY. The latest COT report showed that everybody waschanging their positions but that the commercials were most aggressive wherethey were buyers of the yen. It looks like the dollar has beenunsuccessful in it's recent move back to parity with the yen. We haverecovered from the early morning sale and are now trading at 98. Let'stry to sell a further rally to the 98.20 level with a stop at 98.80. There appear to be many noveaux equity investors, and should they becomefrightened by market fluctuations or world political developments a flight tosafely, might benefit the yen

Bias :  Lower  Bias Term :  Medium  Support :97.50  96.50  95.00  Resistance : 98.50 99.50  100.40

USD/CHF Commentary and Trade Ideas

It is beginning to look like the 1.0600 low of the USD versus the franc is going to hold, but so far the rally off the bottom has notbeen vigorous. The IMF reminded everyone that the worst of the recessionmay be in front of us. Since the Swiss economy depends on tourism andbanking, this is unwelcome news. Currently we are trading at 1.0940,spurting to the upside after taking out the 1.0850. The next resistancelooks to be in the 1.10 vicinity. Prefer the long side but we are a waysabove a good entry point. Best to wait for another day to see whatdevelopes.

Bias :  Higher  Bias Term :  Medium  Support :1.0850  1.0710  1.0620  Resistance : 1.0990 1.1100  1.1220

USD/CAD Commentary and Trade Ideas

It looks like we may have encountered the first wave ofshort covering as we break a downtrend line and move out of the channel. Both equities and oil are lower this morning but they can turn on a dime. The recovery has carried 550 points off the bottom, but looks like it could runa little more up to the 1.15/1.17 before it encounters significantresistance. There appears to be an increasing number of commodity bullsjoining the armies of equity bulls. The majority is never right for verylong, and the majority is getting loaded up long stocks. Unless there isa total run on some of these markets, there should be a chance to buy the CADin the 1.11 to 1.1250 later this week.

Bias :  Higher  Bias Term :  Medium  Support :1.1280  1.1190  1.1130 Resistance :  1.1390 1.14401.1560

AUD/USD Commentary and Trade Ideas

This market has been loaded with longs for quite some time,with speculators betting on the early Chinese economic recovery perking up theAustralian economy. It is easy to jump start the Chinese demand since itis central command economy. Restarting consumer demand will not be thatsimple. The day chart appears to be making a tidy inverted head andshoulders. Get me out volume will probable increase with a trade in thelow 78's. Currently we are trading at 79.20.  I would considershorting in the .80 area. 

Bias :  Lower  Bias Term :  Long  Support :.7915  .7800  .7690  Resistance : .8000 .8075  .8220

NZD/USD Commentary and Trade Ideas

Perhaps the lack of numerous small specs in the Kiwi lessenit's volatility. The NZD is marginally lower this morning. Thoughthe commodity currency story is getting old, 50 year record cold temps in theNorthern Hemisphere will harm grain production. Not sure what this doesto any currency, but a further sell off, perhaps under .60 would not be asurprise.

Bias :  Lower  Bias Term :  Long  Support :.6240  .6090  .5950  Resistance

Published on  Tue, Jun 16 2009, 05:58 GMT

Daily Currency Outlook

Mon, Jun 15 2009, 05:50 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Our preference yesterday was to scalp the short side if themarket failed to hold above 1.4150. This was the right approach as we arecurrently around 1.3965. Further weakness from here will probably elicitsome stops. Overnight the Japanese finance minister said they hadconfidence in the safety of Treasuries and would continue their purchases. Butsince they are the second largest owner of US Gov securities, it sounds likethey are talking their position. The WSJ Says that the dollar will behelped because the Fed is going to refrain from more quantitative easing. Well maybe. Spendaholics generally have a few slips, and the Washington group istruly addicted.  Equities in Europe traded lower, commodities includingoil,are relaxing, and US consumer sentiment has improved, so maybe the signals are properly aligned forfurther dollar strength. Try the short side on a little rally back to1.4020. The pair failed to mount a robust assault on last week's high, soa further retracement is possible toward the 1.37 level.

Bias :  Lower  Bias Term :  Medium  Support : 1.3950  1.3820  1.3750  Resistance : 1.4050 1.4140  1.4200

GBP/USD Commentary and Trade Ideas

After another assault of thehigh the pair has since retreated to 1.6390, or a couple hundred under thesessions high. As the Brown Labour government continues to muddlethrough, the Brits optimism that improving conditions will continue is helpingconsumer sentiment. The the GBP versus the EUR has moved to the highestlevel since Dec 08, but the GBP versus the USD may have printed a doubletop. We had been recommending trading from the long side but this pair'sfailure to move to new high ground makes us waryof this approach. Perhapsit is best to take a pass for today and see what monday brings.

Bias :  Neutral  Bias Term :  Medium  Support : 1.6340  1.6290  1.6150 Resistance :  1.6550 1.6620  1.6800

USD/JPY Commentary and Trade Ideas

This pair is currently trading at 98.25, 100 pips up fromthe low just yesterday, and for the time being stalled in a congested area justabove 98. Though I do not like to initiate new positions on a Friday, Iwant to try to scalp the long side and see if we can take out some stops above.98.50.  The Japanese are exporters and have a vested interest in a weakeryen since this benefits exports. 

Bias :  Higher  Bias Term :  Medium  Support :97.50  96.50  95.00  Resistance : 98.50 99.50  100.40

USD/CHF Commentary and Trade Ideas

As we anticipated there was adequate support in the 1.06/07level to contain the slide in this market. Some dollar affection seems to havegiven the USD a boost versus the Swissy carried the market a little above1.0840. What is the path of least resistance here?  We have foundsome pretty good support under us. Is there a chance we again trade above1.0850 touching off stops prior to the weekend? The dollar bears may berunning out of patience and give us some buying.

Bias :  Higher  Bias Term :  Short  Support : 1.0710  1.0620  1.0550 Resistance : 1.0850  1.0910 1.0990

USD/CAD Commentary and Trade Ideas

With crude lower and North American equities mixed at best,the CAD versus the dollar, has lost ground and is currently trading at1.1190. So much for an uninterrupted move back toward parity. It lookslike a few kind words for the dollar has been beneficial this morning. The danger for the CAD bulls here is that we are close to breaking out of thebear channel, and going through a major down trend line. My bias is for astronger CAD eventually but a short covering rally, after the long downtrendcould be unpleasant.  Let's see what next week brings.

Bias :  Higher  Bias Term :  Medium  Support :1.1130  1.1070  1.0990  Resistance : 1.1240 1.1330  1.1440

AUD/USD Commentary and Trade Ideas

Modest improvement in Australian economic conditions hashelped the AUD back to previous highs. It remains to be seen if thisremains a double top, or we can break through into higher ground. Thecommodity currency story has been told many times, but commodities prices donot always cooperate with the forecasters.  The trend is up but theAustralian story is no longer fresh.

Bias :  Neutral  Bias Term :  Medium  Support :.8000  .7915  .7800  Resistance : .8220  8300 .8450

NZD/USD Commentary and Trade Ideas

NZ retail sales showed a .05 increase in retail sales due toan increase of auto sales, and perhaps gave the Kiwi a little boost. Sofar this market has failed to recover back to the .6590 high made on June 2. Aspreviously mentioned the commodity currency story is not new, The longertrend is still up but the failure to take out the early June high might be awarning that this bull story is a little long in the tooth.

Bias :  Neutral  Bias Term :  Medium  Support :.6360  .6240  .6090  Resistance : .6450 .6540  .6700

Published on  Mon, Jun 15 2009, 05:50 GMT

Daily Currency Outlook

Thu, Jun 11 2009, 07:01 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

News that the Russians are going to swap aportion of their $401B reserves from US Treasuries to IMF bonds was cited asone of the reasons the euro climbed versus the dollar in the Europeansession. Stronger global equities are causing some advisers to conjectthat German, Brazilian, or Australian stock ownership is more appropriate thanUS Treasuries. This rallied the pair to trade a little above 1.4140 wherewe exited our short position. The US Treasury today is auctioning $19B of10 year paper, and it will be interesting to see the market's reception of thisnote which is currently yielding 3.9%. An IBD editorial this morningcommented on Washington 'srecord debt, over 1 trillion for the first eight months of this fiscal year, istwice the previous record. President Obama lectured Congress yesterdayabout spending too much money,but then said borrowing to pay for the initialcosts of his universal health care was a good thing. Other democrats nowwant to include dental and mental health care in the plan. How muchlonger is the rest of the world going to loan this administration trillions fora myriad of new US social programs? The choppiness continues in this pair, as the market iscurrently trading at a little over 1.40. Should the sell off continue, Iwant to try the buy side, however, a day on the sidelines may provide someclarity.

Bias : Higher  Bias Term :  Long  Support :1.3950  1.3820  1.3750  Resistance : 1.4040 1.4140  1.4200

GBP/USD Commentary and Trade Ideas

The Gordon Brown survival feat which has helpedthe pound recovery may be running it's course as the pound begins tostall. It was reported this morning that UK manufacturing did recover forthe second month in a row, furthering optimism about a renewed economicactivity. The recovery, after the sell off prompted by rumors of Brown'sdemise, was quick. The market is acting like it wants to pause, perhapsretreat to the 1.62 level  pending future developments.   Longer termthe market looks ok, so it is a little risky scalping against the major trend.

Bias : Higher  Bias Term :  Long  Support :1.6290  1.6150  1.5980  Resistance : 1.6390 1.6450  1.65.60
 

USD/JPY Commentary and Trade Ideas

This market sold off close tothe order to cover our short at 97, then promptly rallied above 98 and isapproaching our stop at 98.40. It was reported that Japanese machineryorders were worse than expected, indicating the pending recovery is still pending. 
Perception though that the worse is now behind us, and there arebetter investment opportunity elsewhere than the stodgy, mature Japaneseeconomy is given as reason for yen weakness. If this market is unable torevisit the 99 level quickly a sell off to the 96.50 is a target.

Bias : Neutral  Bias Term :  Medium  Support : 97.50  96.50  95.00 Resistance : 98.50  99.50 100.40

USD/CHF Commentary and Trade Ideas

The franc strengthened against the dollaryesterday to a little under the support, and subsequently turned higher, nowtrading above 1.08. Let's try to buy 1.0790 with a 100 point stop, withan objective of 1.0950. Rumors of possible loan default by Latvia is meaningful since defaults are not contained at the border and spread throughout the region. Swiss banks have the risk of large toxic loans tomultiple countries, and a strong franc does magnifies the problems.

Bias : higher  Bias Term :  Longer  Support :1.0760  1.0690  1.0620  Resistance : 1.0890 1.0990  1.1110

USD/CAD Commentary and Trade Ideas

Crude continues to march higher, trading above71 the morning but that was not enough to prevent a 200 point rally from theearly morning low of 1.0945. The Canadian home price index released thismorning was negative, and the trade balance indication exports of Canadianmanufacturing products was lagging. I prefer to scalp the market from thelong side, trying to buy a pull back to 1.1000.  It will be interesting tosee how the CAD behaves when the bull run in crude ends.

Bias : Higher  Bias Term :  Long  Support :1.1050  1.0990  1.0920  Resistance : 1.1140 1.1230  1.1310

AUD/USD Commentary and Trade Ideas

The AUD continues to probe a return back to previous high of.8263.Australian consumer confidence improved for the second month in arow. Our .8030 did not work as we were taken out at .8100. Still notsure what fresh news is going to keep the bull happy, but this story has beenon the best seller list for a while.

Bias : Neutral  Bias Term :  Long  Support :.8000  .7915  .7800  Resistance : .8060 .8150  .8220

NZD/USD Commentary and Trade Ideas

Later today the Reserve Bank of New Zealand announces theresult of there meetings and if there will be any changes in the central bankrate of 2.5%. One currency advisory service acknowledged that thestrength in the kiwi may be a hindrance to their  economic recovery, andthe central bank may intervene to weaken the currency. We will see whatthe reports bring us this evening.

Bias :  Neutral  Bias Term : Medium  Support : .6200  .6090  .6010  Resistance :.6350  .6450  .6540

Published on  Thu, Jun 11 2009, 07:01 GMT

Daily Currency Outlook

Wed, Jun 10 2009, 05:34 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The Euro has strengthened modestly against the USD this morning and is currently trading at 1.4000.  Yesterdays comments that the non farm payroll report would result in higher Fed rates by year end was labeled as balderdash.  Some bond experts thought rates would remain unchanged for the next year as the recession is deep and recovery is elusive.  Rupert Murdock expressed a view that the Obama big government plan is dangerous and could result in US unemployment exceeding 11%.  This is not to say that things are all rosy on the other side.  German exports in April were 28.7% lower than the previous year.  Granted, Paul Krugman did say the US recession would be over by August or at the latest, the 1st of September, but he is such a party hack that, outside of the party disciples, his creditability is suspect. The divergent views make for some choppy markets.  On the theory that the Euro top is in for a while, let's try the sell side at 1.4040 with a 100 point stop.

Bias:  Lower  Bias Term:  Long  Support: 1.3950  1.3820  1.3750  Resistance: 1.4020  1.4120 1.4200

GBP/USD Commentary and Trade Ideas

It appears that Gordon Brown has survived the latest attempt to force his early retirement, allowing him to trundle on.  The pound has recovered smartly up to the 1.6220 area.  Our preference yesterday was to scalp this market from the long side, but the upside target has been achieved.  Despite the unpopularity of the Labour government, the stability provided by a mediocre known administration, is comforting to the pound. Higher UK housing prices also gave the pound a boost.  It is tempting to get cute and try to pick a sell spot for this rally, but the COT futures report last week revealed a market loaded with big spec shorts.  I think it is best to again scalp from the long side, perhaps entering at 1.6180, and see if some shorts come to cover their positions.

Bias:  Higher  Bias Term:  Longer  Support: 1.6150  1.5980  1.5850  Resistance: 1.6240  1.6300  1.6390

USD/JPY Commentary and Trade Ideas

Our sale at 98.60 late Friday is starting to pay off as the pair is now trading at 97.53. 
Let's move the stop down to 98.40 so we don't give everything back,  should the market turn back north.  Take profit at 97.00, the approximate level where the market broke to the upside on Friday.  Bank of Japan officials warns that zero rate interest would have a bad effect on money market funds.  Was the yen weakness last week in response to capital outflow from Japan to secure better yields elsewhere?  This week the US Treasury is auctioning off $65B of 3, 10, and 30yr notes and bonds.  With the three year yield at a shade less than 2% attract some Japanese investors, or will potential dollar weakness scare them away?

Bias:  Lower  Bias Term:  Medium  Support: 97.50  96.50  95.00  Resistance: 98.50  99.50  100.40

USD/CHF Commentary and Trade Ideas

Yesterday we expressed the view that the pair priced at 1.0940 was a little rich, but unfortunately we did not scalp the short side because we are now trading at 1.0840. If the markets fails to find support at this level, 1.0760 should be the next support area.  A private Swiss think tank today reduced their projected GDP for this year to a minus 3.3%.  They expected Switzerland to lag other European recovery because of diminished tourism and difficult financial markets.  I'm inclined to wait another day, and see if we have any further clues what the future might hold.

Bias:  Neutral  Bias Term: Medium  Support: 1.0760  1.0690  1.0620  Resistance: 1.0890  1.0990  1.1110

USD/CAD Commentary and Trade Ideas

Crude oil is again flirting with $70 per barrel today and the CAD has firmed to 1.1030 versus the USD.    Energy exports of crude, natural gas and coal account to over 25% of Canada's exports, and their aggressive energy investments are beneficial to their economy.  Summer is the time when energy prices often top, however, and imminent economic recovery causing increased energy demand sounds like a lot of  hype.  Are there too many oil bulls talking their position?  Prefer to scalp this market from the long side.

Bias:  Higher  Bias Term:  Medium  Support: 1.0990   1.0920  1.0840 Resistance: 1.1140 1.1230  1.1310

AUD/USD Commentary and Trade Ideas

As anticipated the sell off in this pair ended as it approached .78, and has since rallied to .7980.  This market has had a great bull run since late Feb, and it remains a bull market despite the recent sell off.  To keep the Australian story fresh and compelling, we need some news to feed the bull.  Failing that I would not be surprised if this market encounters some liquidation.  I'm inclined to try the short side in the .8030 level with a stop above .8100

Bias:  Neutral  Bias Term:  Medium  Support: .7915  .7800  .7710  Resistance: .8060  .8150  .8220

NZD/USD Commentary and Trade Ideas

The NZD has mustered a modest rebound off the low of .6150 made yesterday, as we currently trade at .6245.  The Reserve Bank of New Zealand will announce tomorrow if they intend to change the current 2.5% rate. I'm inclined to fade this little rally but will wait to see how the market reacts to any new inputs. 

Bias:  Neutral  Bias Term:  Medium  Support: .6150  .6090  .6010  Resistance: .6330  .6450  .6540

Published on  Wed, Jun 10 2009, 05:34 GMT

Daily Currency Outlook

Tue, Jun 9 2009, 05:46 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Last week when the Euro was printing highs the pundits were crediting a better economic climate was increasing risk appetite, and reducing USD demand.  This morning another market "expert" said the dollar is up because  economies are improving, so which is it?  Perhaps the EURO got a little over done last week, and cooler heads notice, economic recovery is more wish than reality. A strong currency might be a hindrance to recovery. About the improvement, does one better than expected non farm payroll report, mean we are on the cusp, once again, of the good times?  Yes, and the imminent pending recovery is of such vigor that we must  start thinking abour higher Fed interest rates by year end.  Equities overnight turned lower as did oil and the Euro which is currently trading at 1.3885.  With the existing state of confusion and explanations for current market activity, the choppy trade may well continue. After 1400 point rally we are probably entitled to a little bigger sell off.  Let's try to sell a rally back to 1.3980 with a 100 point stop, and see if we cannot revisit 1.3700.

Bias:  Lower  Bias Term:  Longer  Support: 1.3820  1.3750  1.3650  Resistance: 1.3930  1.4020  1.4120

GBP/USD Commentary and Trade Ideas

The uncertain future of the ruling Labour has been cited as a reason for the Pound's fall from the 1.66 level, to where it is currently trading at 1.5910. It looks like the swing high is in, but there is some support in the 1.59 area.  Nimble traders can try to scalp the long side with a 100 point stop, with a target of 1.62.  The lengthy tenure and recent behavior of Britain's Labour party confirms that old adage that power corrupts. Recent EU election and poll results suggest the UK ruling party is in trouble, but politicians do no relinquish power graciously, so the turmoil will continue. The longer term bull channel of the BP remains intact, and a sell off down to 1.5650 would merely be a return to the middle of the channel.

Bias:  Neutral  Bias Term:  Medium  Support: 1.5850  1.5770  1.5650  Resistance: 1.6000 1.6100  1.6240

USD/JPY Commentary and Trade Ideas

The late Friday rally of the USD carried the pair through our sell at 98.60, and we are going to risk a 100 points on this trade.  With lower global equity markets this morning the yen has gained against most currencies, but so far not the dollar. Last week's yen weakness may have been more of the Japanese wanting a weak yen to stimulate exports rather than dollar strength. The economy watchers sentiment report released this morning showed a poor sentiment but not getting worse. Though the dollar has been higher versus the yen, we think the rally has gone about far enough.

Bias:  Neutral  Bias Term:  Longer  Support: 97.50  96.50  95.00  Resistance: 99.50  100.40  101.00

USD/CHF Commentary and Trade Ideas

As we anticipated last week, it looks like the SF has stopped the appreciation versus the dollar and printed a bottom at a little less than 1.06. Currently we are trading at 1.0940 which looks a little rich. On the assumption that the trend has turned I want to look for a buy spot in case we get a turn around Tuesday. Prefer to await market action and see what it has to offer tomorrow.

Bias:  Higher  Bias Term:  Medium  Support:  1.0880  1.0760  1.0690  Resistance: 1.0990  1.1110  1.1190

USD/CAD Commentary and Trade Ideas

The market action of the past two days has this pair flirting with levels that may attract some bullish attention from the technicians. We have equities and crude both a little lower this morning. In response to "Buy American" provisions in the US Gov's spending bill, the Canadians are putting "Buy Canadian" provisions in one of their new laws. With the Canadian/Ontario ownership of 10% of General Motors in the new agreement, this may get complicated. Prefer the buy side of this pair if we get a retrace down to about 1.1100 with a 100 point stop, targeting a return to 1.15.

Bias:  Higher  Bias Term: Medium  Support: 1.1150  1.1070  1.0990  Resistance: 1.1270  1.1330  1.1450

AUD/USD Commentary and Trade Ideas

The pair has retreated from the .8260 made last week to the current level of .7850. If this market is really strong the initial sell off should be contained at about .78.  Normally I would be inclined to try the long side on a retracement to this level but the data revealed in the COT report, which shows a massive spec long, makes me reluctant. Since a part of this long will be liquidated as the June futures contract expires, there may be further selling, perhaps taking the pair down to the .75 level. Though the Australian story is interesting, too many people may have already bought it.

Bias:  Neutral  Bias Term:  Short  Support:  .7800  .7710  .7610 Resistance: .7970  .8060  .8150

NZD/USD Commentary and Trade Ideas

The orderly retreat from the high at .6580 continues with the trade currently at .6170. Conventional wisdom of the pundits says the there is going to be commodity inflation because the printing presses are running overtime. This is the rational for a lot of money being invested in the commodity currencies. However, if a lot of this money is just going to pay off the bad debt left behind when the last bubble broke, then there may be some flaws in the current theories. The futures analysis says this pair is dominated by spec longs and very big commercial shorts. It is probably time to back off from the long side.

Bias:  Neutral  Bias Term:  Long  Support: .6090   .6010  .5890 Resistance:  .6240  .6330  .6450

Published on  Tue, Jun 9 2009, 05:46 GMT

Daily Currency Outlook

Mon, Jun 8 2009, 05:54 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The morning reports over the past couple days served as atsunami which caused those with water wings, and others in shallow water, tohead for higher ground.  While the US non-farm payroll was lower thanexpected, unemployment at 9.4% was surprisingly high.  Only 32.7% of 271industries were hiring, and even government agencies reported a loss of 7000jobs. Lagging indicators yes, but what about future recovery?  Well bondshave headed south sending interest rates up, and crude has been climbing,neither constructive ingredients for recovery.  Foreign investors in USTreasuries are rightly concerned, after last being tricked into buying a hostof risky financial products related to the last real estate boom.  UnlessTimmy and Ben can slick talk foreign investors into loaning us trillions tofinance Barack's  expansion of the federal government, rates are headedhigher.  Crude oil is flirting with $70 a barrel and in route to 90, ifyou can believe the same people who were touting $200 per barrel this time lastyear. The  Washington and New York elites couldnot care less about gasoline prices, but these increases are like a silent taxon most Americans and will postpone recovery.  At the moment the dollarseems to be retrieving some of the ground lost to the Euro.  Currently at1.4030, the market acts like it wants to see what happens under 1.40.  Try to buy a further sell off  in the 1.3925 area.  The longer termflight from the dollar looks probable.

Bias : Higher  Bias Term :  Long  Support :1.3990  1.3900  1.3820  Resistance : 1.4100 1.4220  1.4290

GBP/USD Commentary and Trade Ideas

This market has now sold off to the 1.6000 level, 666 points under the weekly high.  It looks like the political uncertainty regarding the future of the current Labour government is coming more to the forefront as a determinate of the pound's value.   Since most politicians refuse to relinquish power graciously, this situation will continue.  A close around the current levels suggests we have printed a top, but I think it is best to wait until next week to test this theory.  The volatile swings the last two days has taken its toll.

Bias :Lower  Bias Term :  Medium  Support : 1.6000  1.5940  1.5850 Resistance :  1.6100  1.6240 1. 6400

USD/JPY Commentary and Trade Ideas

The USD versus the JPY has come to life, and moved above the old resistance at 97.  Currently we are trading at 97.90, and seem to be headed  toward the old resistance levels between 98.50 and 99.50.  The dollar comback versus the yen seems to be more risk tolerance, which increased flight from the super conservative yen.  My inclination is to sell this rally but my Friday market premium probably puts my price at 98.60 too high.

Bias : Lower  Bias Term :  Long  Support : 97.20 95.90  95.20  Resistance : 97.90  98.40  99.50

USD/CHF Commentary and Trade Ideas

With the SF currently trading at 1.0850, we are 260 pointsabove the low printed earlier this week.  The 1.0850 to 1.0950 shouldoffer some resistance but a close at these or higher levels gives this market adifferent look.  Perhaps the high for the SF has been seen, and we canrally back to the 1.11/1.12 level.  Potential Swedish Bank problems in Latvia serve asa reminder that the Swiss have some exposure to risky East European loansalso.  If the market stays above 1.0760, we will try the buy side nextweek

Bias : Higher  Bias Term :  Medium  Support :1.0760  1.0690  1.0490  Resistance : 1.0900 1.0990  1.1110

USD/CAD Commentary and Trade Ideas

Stats Canada reported that 41,800 jobswere lost in May after a 35,900 was reported in April and unemployment was upto 8.4% .   The market was not impressed with the Morgan Stanley rec tobuy the Loonie versus the USD as the pair is now trading higher at1.1140.  It is probably best to await next week's developments, but we maybe due for a further rally back to the 1.15 level.

Bias : Higher  Bias Term :  Long  Support : 1.1100  1.0990  1.0910 Resistance :  1.1200  1.13301.1450

AUD/USD Commentary and Trade Ideas

This pair achieved the long term goal this week a littleabove .82 and has since retreated, flying around with volatility prompted byvarious reports.   Australia remain a commodity concept destination for international investmentcapital.  There is no reason to think this trend is going to end. The Australian decision, this week, to open 33 new areas to off shore oilexploration, with incentives for oil companies to produce, illustrates thecapitalistic ideals of Australia rather than the restrictive policies of theUS.  Use breaks to trade the AUD from the long side.

Bias : Higher  Bias Term :  Long  Support : .7970 .7850  .7710  Resistance : .8060  .8150  .8240

NZD/USD Commentary and Trade Ideas

This pair has made an orderly retreated from early week highs and currently trades at .6330.  NZ remains a concept destination for international investments who are looking for an alternative to dollar dominated assets.   There is no reason to think this pattern will change though a further sell off from the recent high would not be a surprise.  We will to use weakness in the Kiwi to be a buyer next week.

Bias : Higher  Bias Term :  Long  Support : .6300 .6220  .6090  Re sistance :  .6410  .6479 .6550

Published on  Mon, Jun 8 2009, 05:54 GMT

Daily Currency Outlook

Fri, Jun 5 2009, 05:30 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Though the morning reports offered few surprises, this didnot prevent the Euro and the pound from making some quick convulsivemoves.  Currently we are trading at 1.4165.
Our preference is to trythe short side of this pair in the vicinity of 1.4225 risking 100 points. There is increasing concern that the Euro's strength will hinder the economicrecovery making currency strength unwanted.  Stronger equities had beenhelpful to the Euro as investors abandoned  the dollar in favor of stocksbut these markets are mixed so for this am.  Will higher rates on USTreasuries (10 year currently yielding 3.66%) attract overseas money and helpthe dollar, or will fear of further long term dollar depreciation curtailinterest?  Failure to trade in new high ground probably means we are goingto retreat to the high 1.30s.

Bias : Neutral  Bias Term :  Medium  Support :1,4100  1.4010  1.3950  Resistance :  1.4220 1.4290  1.436

GBP/USD Commentary and Trade Ideas

If reports containing few surprises can havesuch a large impact, what would a surprise or two do?  When judging amarket not by the news but how it reacts to the news, then the pound should bea sale. The UK political situation is beginning to attract international attention, and someare wondering if the currency  will be impacted by domestic issues.
The market currently at 1.6170, is down from this week's high of 1.6641. Inclined to try the short side if the market rallies back to around 1.6370, butthat seems pretty far away.  Maybe try selling a one half unit in the1.6290 area.

Bias : Lower  Bias Term :  Medium  Support : 1.6130  1.6050  1.5980 Resistance :  1.6290 1.6400  1.6560

USD/JPY Commentary and Trade Ideas

This dollar strengthened in this pair and tried to challengethe top side side of the 94/97 range prior to retreating to 96.30.  It isreported that Japanese investors continue to sell the yen and place saving inhigher overseas yielding assets.  This market acts like it wants to checkout the top of the range, but I lack conviction and prefer to remain sidelined.

Bias : Higher  Bias Term :  Medium  Support :95.90  95.20  94.60  Resistance : 97.00 97.90  98.40

USD/CHF Commentary and Trade Ideas

Yesterday we suggested selling the Swissy if ittraded to the 1.0770 level, however the rally fell short and only made it to1.0766.  The market has since sold off to 1.0690, leaving us firmlyentrenched on the sideline.  The longer charts suggest a return to the1.04 level, however we are reluctant to press sales of this pair after such asignificant down.  The Euro people are beginning to grumble about a strongcurrency delaying economic recovery, and I guess that the Swiss also sharethese concerns.  Potential Swedish bank problems in Latvia serve asa reminder that the Swiss have some exposure to risky East European loanstoo.  These are some reason not to long the SF, especially after the runup on the USD.

Bias : Lower  Bias Term :  Medium  Support :1.0630  1.0490  1.0370  Resistance : 1.0770 1.0900  1.0990

USD/CAD Commentary and Trade Ideas

Scalping the long side on a rally back to the 111.50 was the right approach yesterday, but you had to be nimble, because we are back to where we started at 1.0970.  A Bank of Canadian spokesman is grousing that the strong CAD may hinder the economic recovery, while a Scotia Capital official expressed a view the CAD is going back to par in the longer view.  Equities are only modestly higher this am but crude up over $2/barrel  makes for a setup where we retest the 1.08/1.0850 levels.

Bias:  Neutral  Bias Term:  Medium  Support: 1.0930  1.0860  1.0815  Resistance: 1.0990  1.1550  1.1120

AUD/USD Commentary and Trade Ideas

Since posting a new high yesterday at .8263, the market has sold off and currently rests at .7980.  It remains to be seen if the spike high is in place, or are we going to regroup try to forge a new high.  If the sell off continues, lets try to buy this pair at .7905 with a 100 point stop.  The Australian Bank chose to keep the interest rate unchanged at 3%, though they warned further reductions will result if the economy does not revive.

Bias:  Higher  Bias Term:  Medium  Support: .7970  .7850  .7710  Resistance: .8060  .8150 .8240

NZD/USD Commentary and Trade Ideas

Like the AUD, the NZD has made a new high and then modestly retreated 300 points from the high. Should the inflow of commodity concept funds slow, the NZD  has some room to sell off to the .59/.605.  Not real sure how to trade this market.  The uptrend remains intact but the momentum has been lost.  Should the equities market sell off how would the NZD fare?  The COT futures report shows this market to be dominated by commercials who are short and the large spec who is long.  Which group will be the first to liquidate?

Bias:  Higher  Bias Term:  Long  Support:  .6300  .6220  .6090 Resistance: .6410   6470  .6550

Published on  Fri, Jun 5 2009, 05:30 GMT

Daily Currency Outlook

Thu, Jun 4 2009, 10:41 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

Failure of the Euro to continue it's upside move after a new high and the subsequent sell off to the current 1.4170 level has changed our bias to neutral. Our inclination yesterday to scalp the market from the short side was correct, and would try the same today, preferring an entry around 1.4240. Global equities are negative this morning responding, to a few recommendations to take profits, and negative economic news. First quarter Euro GDP was down 4.8% following the 2.5% contraction in last years 4th quarter. The pair may be headed for a reversal week.

Bias: Neutral Bias Term: Medium Support: 1.4180 1.4100 1.4010 Resistance: 1.4220 1.4290 1.4360

GBP/USD Commentary and Trade Ideas

The FTSE declined 1.9% today in response to the unsettled political situation with the ruling Labour party. The political instability, which seems to be creeping into the country, may be taking a minor toll on the pound which has sold off from 1.6627 to the current price of 1.6440. This has been a wild ride. We will see if this newly discovered caution for equities continues, and if the pound can be pulled lower with the new attitude. Prefer to try the long side in the 1.6250 to 16300. area.

Bias: Higher Bias Term: Long Support: 1.6360 1.6260 1.6050 Resistance: 1.6500 1.6590 1.6700

USD/JPY Commentary and Trade Ideas

This market remains in a 94 to 97 trading range and currently is trading at 95.75. If the global appetite for risk has been satisfied, might the dollar lose to the yen? The yen strengthened against most currencies with alleged short covering given as the reason. Paul Volcker said a full economic recovery is years away in the US tempering enthusiasm. Let's assume we stay range bound for a while. Try selling this pair at 96.50 with a stop at 97.20, hopeful of a return to 94.50.

Bias: Neutral Bias Term: Medium Support: 95.20 94.60 93.50 Resistance: 97.00 97.90 98.40

USD/CHF Commentary and Trade Ideas

While the trend is obviously down, that momentum has seemingly been reduced. It is tempting to short this pair, a short dollar trade, betting on one more down side move coming, but the proximity to the long term support at around 1.04 makes me cautious. Switzerland's economy is similar to that of the Euroland neighbors...less than robust, so let's see if there is one more round of anti-dollar sentiment. Try to sell the SF at 1.0770 with and 80 pip stop. Maybe we will get one of those long dark candles that takes us all the way down to 1.05.

Bias: Lower Bias Term: Medium Support: 1.0630 1.0490 1.0370 Resistance: 1.0800 1.0900 1.0990

USD/CAD Commentary and Trade Ideas

With equities and crude both lower, the CAD is taking the clue and weakening on the dollar this morning. Currently we are trading at 1.0970, and it looks like the CAD has turned back higher for the short term. It is tempting to fondly remember the success, look for a sell spot and then cover with a profit. That may still work but with the recent COT showing the small specs a 2 to 1 long, and they may want to take profits. Further June is often the seasonal high for the crude market and gasoline markets. I want to try the other side and scalp from the long side and see if we can't get back to 1.1150.

Bias: Higher Bias Term: Medium Support: 1.0890 1.0815 1.0750 Resistance: 1.0990 1.1120 1.1210

AUD/USD Commentary and Trade Ideas

As we have been suggesting the 80/82 level has been our target for a completion of the current move. Currently we are trading at .8090, selling off from a new high at .8262 this morning. Trades under .8050 would probably lead to profit taking and a further slide. There has been lots of attention paid to the Chinese economic recovery, Australia big trading partner, and given as a reason for the expected early Australian recovery. It is important to remember that the Chinese economy does not respond to economic forces, but rather commands from politicians. Again I am not sure how to initiate new positions in this market.

Bias: Neutral Bias Term: Medium Support: .8050 .7970 .7850 Resistance: .8150 .8240 .8300

NZD/USD Commentary and Trade Ideas

As we indicated yesterday we felt that the market had achieved our objectives and was in an overbought condition. After trading at .6561 we have since sold off to .6370. It looks to me like a close at this level will prompt further selling, perhaps down to the .60 level. Investors have been pouring money into emerging markets and commodity concept countries such as NZ. This market may be due to pause but this concept is not going to die.

Bias: Higher Bias Term: Longer Support: .6330 .6220 .6090 Resistance: .6450 .6570 66.90

Published on  Thu, Jun 4 2009, 10:41 GMT

Daily Currency Outlook

Tue, Jun 2 2009, 17:31 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

An overnight sell off gave us a chance to take a long at 1.4125 in this pair.  The market subsequently printed a new high and is currently a little above 1.4235.  A choppy trading week is my expectation, so be quick to take profits.  Early expectations for equities are mixed.  Euro unemployment a little higher than expected at 9.2%, and up from 7.3% last year.  Citibank, with the  pending second federal bail-out in last two decades, really deserves to be in the Hall of Shame. This morning, Citibank is halting severance payments to those ousted execs that ran the company during it's demise. It is ironic that Robert Rubin, who received more than 100M in salary from Citibank during the last 8 years, was the Clinton white house authority that blocked derivative reform and supervision in the late nineties.  With Government Motors now embarked on a path to build little green cars, what changes are planned for the Government Bank?  Can anybody recall how long it took the UK to clean up the mess created by Clement Attlee?  The failure of the Euro to run very far after the new high on the move suggest you can try scalping the short side here with appropriate stops.

Bias:  Higher  Bias Term:  Long  Support:  1.4180  1.4100  1.4010 Resistance:  1.4260  1.4300 1.4360

GBP/USD Commentary and Trade Ideas

This is a market that is taking no prisoners.  The 150 pip sell off appears to have been a buying opportunity.  There reports of modestly better UK loan activity and a mini pick up in construction activity did help the pound but dislike of the dollar is probably the best reason for the pounds strength.  Longer term charts look like we may be headed to 1.73 with 1.6750 the first resistance.  The visibility provided by the COT report, confirms there is a large speculative group with big losing positions, which will likely to give us additional short covering.  Try to buy this pair at about 1.6350 with a 100 pip stop.

Bias:  Higher  Bias Term:  Long  Support: 1.6360  1.6260  1.6060  Resistance: 1.6500  1.6590  1.6700

USD/JPY Commentary and Trade Ideas

We took a pass on a selling opportunity yesterday in the 96.60 area, fearful that the rally had more to go.  Currently trading at 95.95 lets try to sell at 96.50 with a 70 pip stop.  For the moment we seem to be range bound between 94 and 97 with some hedging activity at the end of both ranges. US home sales recovering, but only because the prices have been slammed.  Real estate values are determined by the latest sales and the lower prices leave a lot of the neighbors of the lower prices houses under water.  It seems like there is a lot of new stock speculative activity, with unsolicited stock tips coming from bartenders, barbers and limo drivers.  Too often my timing is early, but this is often the precursor of trouble ahead.  Not sure how this plays out with the USD and the Yen, but risk assumption is the emotion currently in charge.

Bias:  Neutral  Bias Term:  Medium  Support:  95.20  .94.60  93.50 Resistance: 97.00  97.90  98.40

USD/CHF Commentary and Trade Ideas

Yesterday's market failed to rally back to our selling ideas of 1.0795, so we remain an observer in this market.  The Swiss GDP dropped by 0.8% a little less than expected, and the year to year comparison was a 2.4% decline.  The pattern of lower highs and lows continues, suggesting the trend is still lower with the 1.0400 area the obvious target.  Our decent has been notable, 1100 pips, so one would think we are closer to the bottom of the range rather than the top.  The epicenter of the global economic malaise has been the banking sector, and the Swiss, as renowned international bankers, probably have some undisclosed problems. Though the trend is down I fear selling in this area.

Bias:  Down  Bias Term:  Long  Support:  1.0600  1.0490  1.0370 resistance: 1.0800  1.0900  1.0990

USD/CAD Commentary and Trade Ideas

Replace image on left using image manager and replace this text with commentary  Our 1.09 sell from yesterday was filled, but we had to take some heat, a rally up to 1.0970, prior to a sell off to current 1.0810 level.  Congratulations to the Canadian Gov for the acquisition of  12.5% of the Government Motors Green Car Company, making them junior owners to the US Gov, and the UAW.  This may be a case where it is a lot easier acquire than to get ride of ownership.  The CAD strength has had the help of bull markets in equities and crude.  Last years high in crude occurred in late June when the CAD traded around 100.  Can we see a repeat of the same market action this year?  Cover your short at the 1.0800.

Bias:  Lower  Bias Term:  Long  Support:  1.0815  1.0750  1.0610 Resistance: 1.0900  1.0990  1.1120

AUD/USD Commentary and Trade Ideas

The AUD continues its ascent, currently approaching the .82 level.  As expected the Central Bank kept the rate at 3%, which is attractive to Japanese housewives and others.  There are some economic statistics but these items matter little because massive investments into Australia that overwhelms these stats as well as the negative trade balance.  We are back to the approximate place where the pair broke to the downside last September, so we should spend some time around the 80/82 level.  Not sure how to initiate a new position here.

Bias:  Higher  Bias Term:  Medium  Support: .8140  .8050  .7970  Resistance: .8200  .8300  .8450

NZD/USD Commentary and Trade Ideas

The pair has come back to where the down move commenced last August/September.  The 65/66 has long been our objective, and with the daily RSI above 70 this shows an overbought condition, both reasons to take profits. This does not mean the macro commodity concept investors will alter their plans and take money out of the market.  Prefer to watch developments from the sidelines.

Bias:  Higher  Bias Term:  Long  Support: .6420  .6330  .6220  Resistance:  .6570  66.90  .6800

Published on  Tue, Jun 2 2009, 17:31 GMT

Daily Currency Outlook

Mon, Jun 1 2009, 10:04 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

It looks like the Euro, now trading around 1.41, is destined to spend a little quality time above 1.40.  The highest weekly close since Sept 08 was 1.4064 so this close will be meaningful.  Further, this is the last trading day in May, and those holding the winning hands often "paint the tape" to enhance their month end statement.  The Euro economic news is mixed with equities higher and German retail sales a little better, while their loan growth was slow and the inflation rate was the lowest in 13 years.  Once again the Euro, compared to the USD is looking good.  The South Koreans politely said they were looking for better opportunities than US Treasuries in their retirement portfolio, while Morgan Stanley was more blunt,  saying the USD was headed south.  US GDP this am was a little worse than expected down 5.7%, and the government's dissection of the GM cadever are both negative dollar inputs.  They say it is easier to ride a horse in the direction it is going, but is also real hard to mount one that has just galloped away.

Bias:  Higher  Bias Term:  Long  Support:  1.4010  1.3950  1.3850  Resistance:  1.4110  1.4200  1.4290

GBP/USD Commentary and Trade Ideas

This morning's strength in the pound has been attributed to higher housing prices, but I find this explanation weak, and wonder if flight from the dollar is more significant.  The morning explosive move up to 1.6182 has been followed by a retreat back to 1.6067, and is currently trading at about 1.6100.  The bolt to the upside smells like short covering that increased in size once over 1.6060.  Perhaps today's volatility is indicative of a temporary top. An hourly close under 1.6070 would probably confirm this.  My inclination is to short this market for a scalp with a tight stop, but I am restrained because it is Friday, the end of the month, and the market has been very strong.

Bias: Neutral   Bias Term   Medium  Support:  1.6070 1.6000  1.5850 Resistance: 1.6160  1.6290  1.6400

USD/JPY Commentary and Trade Ideas

We took advantage of the visitation to the 97 level by selling at 96.95.  A report that Japanese industrial production grew by in April at 5.2% is credited with causing the strength in the yen.  Should the yen strengthen much further, Japanese investors will probably sell the yen and move investments to the better yielding areas.  Currently we are trading at 95.45, and we are looking to cover short at 95.10 area.  The Japanese jobless rate increased to 5% in a release this morning.  Morgan Stanley is touting buying the yen versus the dollar for long term positions.  The GM bankruptcy may leave many Japanese suppliers to GM with bad debts.  This morning's market has ignored another North Korean missile fired this morning.  In my opinion, longer term charts look like the yen will gain on the dollar.

Bias:  Neutral  Bias Term:  Medium  Support:   95.40  94.60  93.50Resistance: 96.40  97.00  97.90

USD/CHF Commentary and Trade Ideas

The USD continues to weaken on the Swissy and seems headed to about 1.04 where the move began back in December.  While the demand for Swiss watches has not improved and bad Swiss loans remain, the revival on optimism in Euroland is helping the USD lose to the CHF.  At the current level of 1.0690 this market broke to the downside from congestion in the 1.08/09 area.  Try selling the pair if given the opportunity at 1.0795.

Bias:  Lower  Bias Term:  Medium  Support: 1.0680  1.0600  1.0490  Resistance:  1.0800  1.1900  1.0990

USD/CAD Commentary and Trade Ideas

Overnight another brokerage house recommended CAD ownership, because it is a commodity producer, and will benefit as the USD is devalued. Though this morning Canada had a record current account deficit because of lower auto exports and oil prices, help is on the way.  Crude oil had a 29% monthly price increase, the biggest in ten years, and energy accounts for 26% of Canada's exports.  We prefer the short side of this pair but  will wait to see if we can get a rally back around the 1.11 level to sell

Bias:  Lower  Bias Term:  Long  Support:  1.0910  1.0815  1.0630 Resistance:  1.0990  1.1120  1.1200

AUD/USD Commentary and Trade Ideas

We have reached the .80 level so what is next?  This has been a big winner this month for those who were fortunate enough to be long, so some month end window dressing is to be expected.  It is hard to say when a market is overextended but trade at a new magic level often calls for regrouping.  The .79 level should be the new support so let's see what happens week.

Bias:  Higher  Bias Term:  Long  Support:  .7910  .7824  .7720  Resistance: .8010  .8190  .8300

NZD/USD Commentary and Trade Ideas

Our target of .63 was too conservative as the pair raced through to .64 prior to retreating to .6365.  This has been a great week for the Kiwi.  The New Zealand budget received a vote of confidence yesterday, and it looks like the NZD will be the recipient of more commodity concept funds.  Take a little rest over the weekend, then let's see if we can pick up a bargain next week.

Bias:  Higher  Bias Term: LongX  Support:  .6220  .6120  .60.50  Resistance:  >6400  .6490  .6600

Published on  Mon, Jun 1 2009, 10:04 GMT

Daily Currency Outlook

Fri, May 29 2009, 09:45 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

The failure of the Euro to spend any significant time above the 1.40 level, has unnerved the bulls and probably caused a little selling.  If the retracement  resumes today and takes the pair into the 1.37/1.3750 level I want to try the long side.  The economic sentiment in Euroland might be a little better, hopeful of a better future. Yesterday's US Treasury auction of 5 year notes brought glowing reports of foreign central bank participation right before the bond market tanked and the rates appreciated sharply.  Something is not right about this picture.  Maybe today's 7 year note sale will provide clarity.  It does appear that quantitative easing, the newspeak term for printing money, is unable to stop the upward march of rates.  With the GM bankruptcy pending, has the market discounted this event?  The tentacles of GM are extensive and I doubt this will be bullish on the dollar. 

Bias:  Higher  Bias Term:  Long  Support:  1.3850  1.3800   1.3730 Resistance:  1.3920  1.3980  1.4050

GBP/USD Commentary and Trade Ideas

The rarefied air  above the 1.60 level combined with an official with the Bank of England's statement that he foresees no significant improvements though 2010 took us lower.  The longer term uptrend remains in place, so I want to try the long side if the pair retreats to the 1.5850 level.  Buying the pound is more of a vote against the USD rather than enthusiasm for the pound.  Confronting the reality of a GM bankruptcy may be a negative dollar input.

Bias:  Higher  Bias Term:  Long  Support:  1.5850  1.5790  1.5725 Resistance: 1.5990  1.6100 1.6195

USD/JPY Commentary and Trade Ideas

We felt that this market could be scalped from the long side but a rally back to 97 was beyond our expectations. After the market achieved the downside target under 94, the ill behaved North Korean's bellicose behavior jump started the rally of the USD versus the yen.  Overnight it was reported that there was a sharp increase in overseas investments by the Japanese investors, causing yen selling to acquire those assets.  Nomura  is touting a global economic recovery lead by China and India which will take the dollar yen to 87.   I'm inclined to fade this 300 pip rally so try to sell 96.95 with a protective stop at 97.95.  Currently the market is 96.80.

Bias:  Neutral  Bias Term:  Medium  Support:  96.40  95.40  94.60  Resistance: 97.00  97.90  98.80

USD/CHF Commentary and Trade Ideas

The sideways trend continues although we did rally back to 1.0950 prior to the current sell off to 1.0850. Clearly the trend is lower but the ideal entry for a short usd long chf is elusive.  The Swiss surplus trade balance improved in the latest period, but there has been no recent conversation about the bad Swiss bank loans. 

Bias:  Lower  Bias Term:  Long  Support: 1.0840  1.0710  1.0600  Resistance: 1.0900  1.0990  1.1080

USD/CAD Commentary and Trade Ideas

Nothing new here, the CAD is again exhibiting strength versus the USD  today, though we are flirting with a level ( 1.1100) that has been support.  If short from Tuesdays trade rec at 1.1350, cover here and look to reestablish short on a rally back to 1.1220.  Crude oil, which normally provides support for the CAD, remains firm.  Not sure if the collapsing auto industry will provide further harm to the Canadian economy.  In addition to GM and Chrysler plants in Ontario, there are numerous auto parts suppliers located in Canada.

Bias:  Lower  Bias Term:  Long  Support: 1.1070  1.1000 1.0910  Resistance: 1.1180  1.1300  1.1390

AUD/USD Commentary and Trade Ideas

The AUD was  shrugged off the report that Australian Capital spending was off 8.9% in the most recent quarter and come racing back to the old highs.  Unemployment, the worst since 1991, is only 5.4%, clearly better than other countries.  This resilient bull market keeps coming back.  Maybe it is destined to check out .80 before we get a retracement.  Not sure what to do with this pair at the moment.

Bias:  Higher  Bias Term:  Medium  Support: .7825  .7720  .7550  Resistance: .7900  .7990  .8090

NZD/USD Commentary and Trade Ideas

The market apprehension ahead of the release of the NZ budget was unwarranted. After the report the Kiwi went right back up near the old high and is currently trading at .6230.  The commodity concept trade has elevated the NZD to the fore front, making it the recipient of carry trade money.  If you share this view, try to own the NZD versus the USD at 61.85 and see if we can above .63.

Bias:  Higher  Bias Term:  Long  Support: .6200  .6120  .6050  Resistance: .6240  .6350  .6500

Published on  Fri, May 29 2009, 09:45 GMT

Daily Currency Outlook for 5/20/09

Thu, Mar 5 2009, 18:44 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

For the past two days we have wanted to buy the EURO but our orders were too cautious and we were unable.  It is always difficult to know when a market is going to streak to a new level, or when it is going to take a stair step path.  This pair is flirting with a series of  five spike highs above 1.37 since mid March.  If we take out the 1.37 on a closing time frame basis, we will probably encounter some get me out orders and then what?  The daily chart shows a steep but orderly uptrend since 4/22.  The trend remains higher so lets again buy a pull back at 1.3550 with a 100 point stop.  If the pair first trades above 1.37 and then fails this order should be canceled.

Bias:  Higher  Bias Term:  Medium Support: 1.3550  1.3450  1.3390  Resistance: 1.3690  1.3735  1.3900

GBP/USD Commentary and Trade Ideas

The pound continues to work higher, so far in an orderly fashion.  The daily chart shows only minor resistance, and a medium term target of 1.59/60 seems reasonable.  Currently  we are at the top end of the channel on the H4 and daily charts.  The hourly chart shows a loss of upside momentum with  extended sideways activity.  Just in case we catch some selling lets place a buy order at 1.5420 and risk down to 1.5310.  English authorities have unanimously voted to increase the asset purchase scheme by 50M pounds, thereby further increasing the money supply

Bias:  Higher  Term Longer    Support: 1.5540  1.5360  1.5210  Resistance: 1.5640  1.5720  1.5900

USD/JPY Commentary and Trade Ideas

Global equities continue to perform well diminishing  the safe but low yielding currencies like the yen.  The yen continues to gain on the dollar perhaps reflecting concerns about the current US's administration economic policies.  We remain short from 96.45.  Move the stop down to 96. and the cover price to 94.60.  The USD is without friends today.

Bias:  Lower  Bias Term:  Medium  Support:  95.20  94.60  93.55 Resistance: 96.20  96.70  98.00

USD/CHF Commentary and Trade Ideas

Without Swiss Central Bank intervention the franc moved to a new high versus the USD at  under 1.10.  Our long trade at 111.35 was liquidated at 1.1050 on the way down.  The USD seems to be without friends at the minute, but fear of bank intervention makes the long side of the franc unappealing.

Bias:  Lower  Bias Term:  Medium  Support: 1.0980  1.0900 1.0810  Resistance: 1.1030  1.1080  1.1230

USD/CAD Commentary and Trade Ideas

The USD made a new low on the recent move against the CAD today.  In retrospect the retracement rally back to 1.1780, at the 23.6% Fibonacci number was a great sell.  What now?  A continuation of the down trend could eventually take us into the 1.12/13 range.  If the market has a little relief rally back, try to sell 1.1470 with a stop at 1.1560.  We are currently trading at 1.1420.  The Dollar Index is grudgingly working into new low ground.

Bias:  Lower  Bias Term:  Medium  Support: 1.1400  1.1300  1.1220 Resistance:  1.1510  1.1620  1.1730

AUD/USD Commentary and Trade Ideas

The AUD made a new high at a little over .78 to the USD this morning.  This market has relaxed very little on the latest bull march as evidenced by the H4 RSI clinging close to the 70% line.  Deutsche Bank overnight recommended borrowing the ASD's for a carry trade in Brazil, citing the lesser correlation of the AUD to equities as the reason to borrow the aussie dollars.  Does this mean that equities are riskier than the Brazalian Real?   Not sure how to approach this market.  Buying new highs generally works better than selling them, but I chose to watch.

Bias:  Higher  Bias Term:  Medium  Support:  .7720  .7650  .7560 Resistance: .7810  .7900 .8000

NZD/USD Commentary and Trade Ideas

The US Treasuries announcement this morning that they plan to buy up to $300B of Treasuries caused buying in commodity based currencies this morning. The purchase of bills and notes results in the printing of large amounts of paper money and the eventual result is inflation and debasing of the currency.  Like the AUD the NZD retreats little from the highs.  Longer term charts look good and counts can eventually take the kiwi back to about 66.  Let's try to buy the market at .6050 with a 100 pip stop and see if we can catch part of this move.

Bias:  Higher  Bias Term:  Long  Support: .6050  .5960  .5850  Resistance: .6100  .6200  .6350

Published on  Thu, Mar 5 2009, 18:44 GMT

EUR/USD

Wed, Mar 4 2009, 12:16 GMT
by Jonah Johnson, Ralph Shell, Jason Peterson

ForexRazor

• EUR/USD Immediate Term Bias: Up
• EUR/USD Post-Immedate Term Bias: Neutral
• Trading Signal: Trade in Progress; See Open Trade Center

Market Analysis:

The G7 meeting produced little to speak of and does not offer much in the way of coattails to ride. The many stimulus packages recently announced, along with a multitude of otherfactors make it likely German economic sentiment will print gains for a second month when the ZEW indicator is released on Tuesday. In a cautious tone the European Central Bank has cited abrupt rate changes as a mistake, while asserting they stand ready to take whatever action becomes necessary to promote economic stability.

In the US, GM announced unless it receives more handouts it will be forced to file for bankruptcy. It does make one wonder if all that time spent waving an American flag to promote sales might have been better spent engineering vehicles that could compete with their Japanese counterparts.

Meanwhile, the latest market fad has been US Dollar strength. There appears to be some consensus that the flight to U.S. treasuries as a save haven will soon end and contribute to an unraveling of Dollar gains. Whatever the case, true fundamentals do not point to the strength we have seen continuing in the longer term picture versus currencies like the Euro.

Technical Analysis:

Daily Chart:

Our bias on Friday turned out to be accurate quite quickly, as price dropped from it's position as the top of the channel before the end of the day, and then well over 100 points by market open on Sunday. The daily chart still indicates downward pressure with strong support in place above the 1.2700 level, begging the question as to whether the current channel will remain intact.

Hourly Chart:

Hourly activity has been very rangebound with a bull run up to approximately 1.2820 which suggested a potential change in immediate trend, and current bearish looking price action. Price on the one hour chart has also established a distinct sub-channel of the larger daily channel, and currently sits near the lower threshold. Immediate term moves look to have a higher upside than downside, since bearish moves have not carried support shattering volatility.

Published on  Wed, Mar 4 2009, 12:16 GMT