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

• Send
• Print
• Add To

Daily Analysis Article

This report has been deactivated

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, 17:17 GMT