• Home ::
• Technical ::
• Market View ::
• Daily Analysis Article

• Send
• Print
• Add To

Daily Analysis Article

This report has been deactivated

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, 17:39 GMT