EUR/USD Nov. 2nd
With the recent back and forth action in the Euro/Dollar pair, it certainly is the focus of a lot of the trading energy at the moment. This pair has been very whippy, but it still respects certain areas. With the headline risks out there, it is necessary to be nimble and aware of comments, news, etc.
With this in mind, we can still look to the charts and try to determine the best course of action. However, I would also point out that the reactions to the downside have been absolutely brutal, and the bad headlines that come out from time to time absolutely pummel the pair. This suggests that there is still a lot of fear out there.
Looking at the chart, you can see a wide band or support and resistance between the 1.39 - 1.40 area. The area should remain a pivot of sorts, and a pullback to that area isn't out of the question......and at the time of this post we are in the vicinity of 1.38 already. Once we hit the area - we are looking for weak price action in the form of hammers, bearish outside candles, etc.
With the recent back and forth action in the Euro/Dollar pair, it certainly is the focus of a lot of the trading energy at the moment. This pair has been very whippy, but it still respects certain areas. With the headline risks out there, it is necessary to be nimble and aware of comments, news, etc.
With this in mind, we can still look to the charts and try to determine the best course of action. However, I would also point out that the reactions to the downside have been absolutely brutal, and the bad headlines that come out from time to time absolutely pummel the pair. This suggests that there is still a lot of fear out there.
Looking at the chart, you can see a wide band or support and resistance between the 1.39 - 1.40 area. The area should remain a pivot of sorts, and a pullback to that area isn't out of the question......and at the time of this post we are in the vicinity of 1.38 already. Once we hit the area - we are looking for weak price action in the form of hammers, bearish outside candles, etc.
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USD/JPY Nov. 4th
Going forward, the easiest trade - if there is such thing as an easy trade in Forex - is to short the USD/JPY. The main reason for this is that we have seen another intervention, and this move could not get above the all-important 80 handle. In fact, one could say that the 80 mark is the "flip" of the pair. Until we close above that area, we cannot suggest buying as it is massive resistance. (BoJ can't break it - neither can you!)
Historically, unilateral interventions don't work. In fact, the previous one only took about 5 days to fail, and we suspect this will be the case again. It could be a slow and ugly grind, but the market clearly has no real interest in going higher at this point. While we aren't holding onto a short position forever - we are willing to take the next 100 pips or so.
Going forward, the easiest trade - if there is such thing as an easy trade in Forex - is to short the USD/JPY. The main reason for this is that we have seen another intervention, and this move could not get above the all-important 80 handle. In fact, one could say that the 80 mark is the "flip" of the pair. Until we close above that area, we cannot suggest buying as it is massive resistance. (BoJ can't break it - neither can you!)
Historically, unilateral interventions don't work. In fact, the previous one only took about 5 days to fail, and we suspect this will be the case again. It could be a slow and ugly grind, but the market clearly has no real interest in going higher at this point. While we aren't holding onto a short position forever - we are willing to take the next 100 pips or so.
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USD/CAD November 7th
Looking ahead to the next week, the USD/CAD pair has caught our eye as a study in correlations. The price of oil markets can greatly move the pair, as the Canadians export so much crude to the USA. The Light Sweet Crude futures are currently struggling at the $95 mark, which has been resistance before. If the oil markets fall, and the headline risks keep coming, this pair could move higher. However, it should be noted that the area above, and going to 1.03 is resistive. It is because of this we are favoring longs - but only after 1.03 is cleared on a daily close. We don't like selling at this point, as the parity level should continue to cause reactions.
Looking ahead to the next week, the USD/CAD pair has caught our eye as a study in correlations. The price of oil markets can greatly move the pair, as the Canadians export so much crude to the USA. The Light Sweet Crude futures are currently struggling at the $95 mark, which has been resistance before. If the oil markets fall, and the headline risks keep coming, this pair could move higher. However, it should be noted that the area above, and going to 1.03 is resistive. It is because of this we are favoring longs - but only after 1.03 is cleared on a daily close. We don't like selling at this point, as the parity level should continue to cause reactions.
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USD/CHF November 8th
Looking at the USD/CHF pair, we had a push during the Monday session to the all-important 0.9000 level. Knowing that the area has served as both support and resistance in the recent past - we have begun to take notice in this pair. The SNB's Jordan made comments that the central bank was willing to do what it takes to weaken the Franc. This caused a knee-jerk reaction that we have some reservations about. (It was even more pronounced in the EUR/CHF pair.)
The USD/CHF is a better of two choices though, when talking about the EUR/CHF. The real focus is on the USD side of the equation as the Dollar is the default safe haven currency now..... the Franc and the Yen can been tricky with hostile central banks. We feel that the daily close above the 0.9000 level would be a buy signal, but we are willing to wait until the close because of the enormity of the area.
Looking at the USD/CHF pair, we had a push during the Monday session to the all-important 0.9000 level. Knowing that the area has served as both support and resistance in the recent past - we have begun to take notice in this pair. The SNB's Jordan made comments that the central bank was willing to do what it takes to weaken the Franc. This caused a knee-jerk reaction that we have some reservations about. (It was even more pronounced in the EUR/CHF pair.)
The USD/CHF is a better of two choices though, when talking about the EUR/CHF. The real focus is on the USD side of the equation as the Dollar is the default safe haven currency now..... the Franc and the Yen can been tricky with hostile central banks. We feel that the daily close above the 0.9000 level would be a buy signal, but we are willing to wait until the close because of the enormity of the area.
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EUR/USD November 9th
The EUR/USD continued to defy gravity for the Tuesday session, but looking ahead, we can see a few technical headwinds in this pair going forward. Italian bond rates are rising, and with the uncertainty in the Italian government, things could rapidly shift. In fact, the EUR/USD is probably one of the riskiest pairs to trade at the moment, but since so many people want to - we feature it.
Once we get toward the 1.39 to 1.40 area, there is a massive area for sellers to step in. Of course, we have seen a pullback during the midday in N. America in reaction to some key votes in Rome. Looking at the chart - do we have a flag? Only time will tell, but one would have to think that the most likely path for the Euro over time is down.....If the flag is broken to the downside, the classic measurement is for a run to 1.31 or so.
Attached is the 4 hour chart for the EUR/USD pair.
The EUR/USD continued to defy gravity for the Tuesday session, but looking ahead, we can see a few technical headwinds in this pair going forward. Italian bond rates are rising, and with the uncertainty in the Italian government, things could rapidly shift. In fact, the EUR/USD is probably one of the riskiest pairs to trade at the moment, but since so many people want to - we feature it.
Once we get toward the 1.39 to 1.40 area, there is a massive area for sellers to step in. Of course, we have seen a pullback during the midday in N. America in reaction to some key votes in Rome. Looking at the chart - do we have a flag? Only time will tell, but one would have to think that the most likely path for the Euro over time is down.....If the flag is broken to the downside, the classic measurement is for a run to 1.31 or so.
Attached is the 4 hour chart for the EUR/USD pair.
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Eur/usd
Looking at the EUR/USD, you can see in early morning US trading the pair has slammed back down towards the 1.36 level as Italian bonds sell off. We have entered a new period where Italian bonds simply will not be sustainable at this point, and the spread on the Italian vs. German 10 year has reached over 5%. This is very bearish for the Euro, but the charts are telling us that the move down from here will be tough. Not impossible - but certainly tougher than the first move during the European session.
Looking at the box on the chart, you can see several different areas that show support from 1.36 down to 1.34. We think this area will hold the key to future moves in this pair. The area is going to be where we look for candles to suggest the direction, but the truth is that we cannot "guess" the direction - we are going to react to it.
The move will more than likely be brutal, and obvious. This move will take patience. If you are willing to wait to see which way it breaks, you should be rewarded.
Looking at the EUR/USD, you can see in early morning US trading the pair has slammed back down towards the 1.36 level as Italian bonds sell off. We have entered a new period where Italian bonds simply will not be sustainable at this point, and the spread on the Italian vs. German 10 year has reached over 5%. This is very bearish for the Euro, but the charts are telling us that the move down from here will be tough. Not impossible - but certainly tougher than the first move during the European session.
Looking at the box on the chart, you can see several different areas that show support from 1.36 down to 1.34. We think this area will hold the key to future moves in this pair. The area is going to be where we look for candles to suggest the direction, but the truth is that we cannot "guess" the direction - we are going to react to it.
The move will more than likely be brutal, and obvious. This move will take patience. If you are willing to wait to see which way it breaks, you should be rewarded.
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Nzd/usd
Looking at the Kiwi Dollar during the US session, we see that the 0.78 handle is being broke though, and this makes sense with the currency being so sensitive to global risk. The headlines are a real danger to risk appetite, and as such we like the idea of selling this pair as the USD is the de facto safe haven at this point in time.(Switzerland and Japan are both fighting this title.)
If we clear the 0.7750 level, it looks as if we will try to make a run back down to 0.75, which we see as the next major support area.
Looking at the Kiwi Dollar during the US session, we see that the 0.78 handle is being broke though, and this makes sense with the currency being so sensitive to global risk. The headlines are a real danger to risk appetite, and as such we like the idea of selling this pair as the USD is the de facto safe haven at this point in time.(Switzerland and Japan are both fighting this title.)
If we clear the 0.7750 level, it looks as if we will try to make a run back down to 0.75, which we see as the next major support area.
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The power of "big figures".
The NZD/JPY pair has bounced slightly from the 60 handle, which is of course a big number that many traders will be paying attention to. The pair is highly correlated to the risk appetite around the world, so think of it as a sentiment indicator of sorts. The great thing about looking at trades in the 60 area is that it gives us a bit of a "binary" decision to make. Either we go long above it, or get short below it.
Today could be big for this market.
The NZD/JPY pair has bounced slightly from the 60 handle, which is of course a big number that many traders will be paying attention to. The pair is highly correlated to the risk appetite around the world, so think of it as a sentiment indicator of sorts. The great thing about looking at trades in the 60 area is that it gives us a bit of a "binary" decision to make. Either we go long above it, or get short below it.
Today could be big for this market.
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Pound falls, meets "line in the sand".
Looking at the cable pair, it is clear to see that the 1.60 area has been like a magnet recently. The markets like these large round numbers, and with the uncertainty out there in the global markets, one has to wonder whether or not there is much volume. (Remember, any "volume" on a platform for trading Forex is tick volume at your broker, nothing more.)
Because of this, the GBP/USD chart has caught our attention this afternoon. It looks as if it is testing the bottom of the recent consolidation, and sets up for a fairly simple trade. If we break lower than the recent lows in the 1.5875 area, we should find this pair falling. If we don't - 1.61 is probably going to be tested again as we consolidate even more.
Looking at the cable pair, it is clear to see that the 1.60 area has been like a magnet recently. The markets like these large round numbers, and with the uncertainty out there in the global markets, one has to wonder whether or not there is much volume. (Remember, any "volume" on a platform for trading Forex is tick volume at your broker, nothing more.)
Because of this, the GBP/USD chart has caught our attention this afternoon. It looks as if it is testing the bottom of the recent consolidation, and sets up for a fairly simple trade. If we break lower than the recent lows in the 1.5875 area, we should find this pair falling. If we don't - 1.61 is probably going to be tested again as we consolidate even more.
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British Pound set to fall further
Looking at the GBP/USD pair, it is obvious that the momentum has shifted to the downside. The breaking of the two previous week's hammers to the downside is a very bearish signal. This doesn't happen everyday, and as such we are very bearish of the Pound now.
Looking at the GBP/USD pair, it is obvious that the momentum has shifted to the downside. The breaking of the two previous week's hammers to the downside is a very bearish signal. This doesn't happen everyday, and as such we are very bearish of the Pound now.
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Euro fighting yet again.
As many of you will undoubtedly know, the Euro just won't die. The EUR/USD pair has been very bearish, but there seems to be serious support in the form of 1.35 at the moment. There have been rumors of Central Banks out of Asia buying, but this of course is just that - rumor. The area is absolutely vital to be broken down if the bears can have their way. The fundamentals certainly favor it, but the level continues to frustrate the sellers. Currently, (this is being posted later US morning) the level is fighting back yet again. Notice though, over time we are going lower and lower......making us thinking it gives way sooner or later. A daily close below 1.35 is a very bearish turn of events.
As many of you will undoubtedly know, the Euro just won't die. The EUR/USD pair has been very bearish, but there seems to be serious support in the form of 1.35 at the moment. There have been rumors of Central Banks out of Asia buying, but this of course is just that - rumor. The area is absolutely vital to be broken down if the bears can have their way. The fundamentals certainly favor it, but the level continues to frustrate the sellers. Currently, (this is being posted later US morning) the level is fighting back yet again. Notice though, over time we are going lower and lower......making us thinking it gives way sooner or later. A daily close below 1.35 is a very bearish turn of events.
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The GBP/USD pair got a significant spike during the day as the latest rumors about the EU continue to push the markets around. However, the day is starting to look it wants to roll over a bit, and the momentum continues to look bearish overall. The fact that the bulls retreated so quickly during the session, and that we may have a "continuation shooting star" forming raises serious questions about the viability of the Pound.
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Kiwi Dollar is the "Canary in the coal mine"
When looking at commodity currencies, without a doubt the one that will move the fastest is the New Zealand Dollar. The Kiwi is massively sensitive to risk appetite, and as a result is often the first to move up or down. With this in mind, we find the NZD/USD chart very interesting as it has just made a new daily low. If this move picks up to the downside, we could see another sell off of commodities and higher-yielding currencies. This should set up for shorts in the AUD/USD pair as well as longs in the USD/CAD and USD/NOK pairs....
When looking at commodity currencies, without a doubt the one that will move the fastest is the New Zealand Dollar. The Kiwi is massively sensitive to risk appetite, and as a result is often the first to move up or down. With this in mind, we find the NZD/USD chart very interesting as it has just made a new daily low. If this move picks up to the downside, we could see another sell off of commodities and higher-yielding currencies. This should set up for shorts in the AUD/USD pair as well as longs in the USD/CAD and USD/NOK pairs....
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Eur/gbp
Looking at this pair, we can see a classic shooting star set up on Tuesday that has been broken to the downside today. The pair looks weak, and set to return to the previous range between the 0.8650 and 0.85 mark. The 0.85 will provide support, but the trend is for a lower price over time we believe. The Germans had issues selling bonds today - a very bad sign that shows just how far behind the issues the EU really is. Contagion is starting to become full-blown at this point.
Looking at this pair, we can see a classic shooting star set up on Tuesday that has been broken to the downside today. The pair looks weak, and set to return to the previous range between the 0.8650 and 0.85 mark. The 0.85 will provide support, but the trend is for a lower price over time we believe. The Germans had issues selling bonds today - a very bad sign that shows just how far behind the issues the EU really is. Contagion is starting to become full-blown at this point.
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Cable retesting resistance on Friday...
Looking at the longer-term bearishness, it often helps to try and fine tune your entries to maximize potential profits. Looking at cable in this light today, we cannot help but notice the shooting star on the hourly chart @ the 1.55 resistance level while testing a trend line. While nothing is ever 100% fool-proof, the reality is that the trend is down, and this chart shows weakness again.
Looking at the longer-term bearishness, it often helps to try and fine tune your entries to maximize potential profits. Looking at cable in this light today, we cannot help but notice the shooting star on the hourly chart @ the 1.55 resistance level while testing a trend line. While nothing is ever 100% fool-proof, the reality is that the trend is down, and this chart shows weakness again.
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Pound looks weak still.
After the "Hopium" rally of Monday, the GBP/USD pair has tipped it's hand we believe. Looking at the 1.55 level, we see a major battleground, and one that was completely blown past during the session. However, in the later part of the US session - we are seeing a real pullback. The daily candle looks to be a shooting star right at resistance....not a good sign for bulls. A breaking of the lows on Monday has the bulls running for cover.
After the "Hopium" rally of Monday, the GBP/USD pair has tipped it's hand we believe. Looking at the 1.55 level, we see a major battleground, and one that was completely blown past during the session. However, in the later part of the US session - we are seeing a real pullback. The daily candle looks to be a shooting star right at resistance....not a good sign for bulls. A breaking of the lows on Monday has the bulls running for cover.
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USD/CHF quietly building steam.
While most of the world focuses on the Euro presently, over the last few weeks there have been strong gains to be had in the USD/CHF pair. The move makes sense, as the SNB is working against Franc strength, and the USD is the last clear safe haven currency. The daily chart isn't done forming, but you can see we are attempting to form a hammer - a very supportive sign. We have been buying pullbacks in this pair.
While most of the world focuses on the Euro presently, over the last few weeks there have been strong gains to be had in the USD/CHF pair. The move makes sense, as the SNB is working against Franc strength, and the USD is the last clear safe haven currency. The daily chart isn't done forming, but you can see we are attempting to form a hammer - a very supportive sign. We have been buying pullbacks in this pair.
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EUR/USD spikes.
Looking at the EUR/USD pair, the spike from the central bank actions today has booted the "risk on" appetite for the markets. The pair has decidedly turned bullish for the day, but as you can see from this chart, the 1.35 level is massive as a resistance area. The area is looking like it will continue to be a major hurdle in this pair, and it should be watched for how it turns out by the end of the session. If we are over 1.35 - then the EUR/USD should continue to rise.....but so far - it looks like it will hold the pair down. At the end of the day, we will be long above 1.35, or short below it.
Looking at the EUR/USD pair, the spike from the central bank actions today has booted the "risk on" appetite for the markets. The pair has decidedly turned bullish for the day, but as you can see from this chart, the 1.35 level is massive as a resistance area. The area is looking like it will continue to be a major hurdle in this pair, and it should be watched for how it turns out by the end of the session. If we are over 1.35 - then the EUR/USD should continue to rise.....but so far - it looks like it will hold the pair down. At the end of the day, we will be long above 1.35, or short below it.
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Switzerland to have negative interest rates?
With the rumor of negative interest rates coming out of Switzerland, the idea is that they don't want your money. With this in mind, the theory is that there will be less money coming into the country, and therefore less FX transactions heading towards Zurich, and more leaving. This would drive the value of the Franc down, and that is something the Swiss National Bank will certainly have no problem with. With this in mind, we still like the long USD/CHF idea as the Dollar is a "safe haven" currency and the Franc can't be bought at the moment. 0.9000 looks like solid support at this point:
With the rumor of negative interest rates coming out of Switzerland, the idea is that they don't want your money. With this in mind, the theory is that there will be less money coming into the country, and therefore less FX transactions heading towards Zurich, and more leaving. This would drive the value of the Franc down, and that is something the Swiss National Bank will certainly have no problem with. With this in mind, we still like the long USD/CHF idea as the Dollar is a "safe haven" currency and the Franc can't be bought at the moment. 0.9000 looks like solid support at this point:
