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Daily Analysis Article

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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, 06:23 GMT