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USDCAD Retracement Below 1.1500 Could Print |
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Thursday, 09 July 2009 14:20 |
EURUSD Hits Confluence of  Resistance
The R3 as well as the 50% Retracement level of the 1.6743/1.5994 move happens to be within 12 points of each other and may just thwart any move higher for the day. It's interesting that yesterdays USD and JPY strength came courtesy of the slackened equity market. Today's USD and JPY weakness have come without much equity strength. In fact, it looks like most indexes will close unchanged with the Dow and Russell 2K negative for the day. Not really much of an inspiration, so it must be coming from the higher than expected CAD housing starts and lower than expected USD new unemployment claims. The one number that may have been overlooked is the continuing claims unexpected rise. That’s great that initial job losses slowing, but that number hides that fact that those laid off are not finding new jobs. Consumer Sentiment was unexpectedly higher than expected yesterday, but their wallets aren't following their feelings, ONE HUGE PROBLEM! No US consumer spending lengthens the bottom.
EURJPY and USDJPY Both Hit Initial Retracements From Yesterday
Both pair took to flight today and have reached the initial retracement values mentioned in yesterday’s posts. The USDJPY actually went a bit further and touched the 50% retracement line. I have included both charts below. I think these are initial retracements and we may see a little more pullbacks, but I don't think the moves lower is over yet. I mentioned yesterday that I thought it may take a few days to get to the 126.61 area on the EURJPY and still feel that way. In fact today’s action only affirms that feeling. I'll be looking for failures to reestablish trades EURJPY shorts, and I have to balance my desire to go long on the USDJPY with my concern for the down side.
USDCAD Retracement Below 1.1500 Could Print
Looking at the chart below makes me think there may be a stronger pull back from the shorter line to the longer line below. I would prefer there were some secondary target to look at but there just isn't at this point. If there is another Bounce away from the shorter line this morning I may take this as a short and play it with a very light touch keeping my risk on the trade just above 1.1632.
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DJIA Supporting Weaker Outlook |
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Written by Administrator
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Wednesday, 08 July 2009 16:27 |
EURGBP Not as strong as EUR is weak
Though the pair is experiencing a bit of a buying day, it hasn't been as strong as the Euro has been weak. After the JPY took all of its counterparts for a ride in late morning trade, it is becoming evident that the ride may be overdone and a good Bounce maybe seen. Forget all the jargon about what kind of a bounce it is and look at the formations you are seeing on the daily and hourly charts 93.18 marks my pull back target for the USDJPY and 130.78 marks my pullback target of the EURJPY. The pull back in the EURJPY should help pull the EURGBP back to the .8584/8600 area, keeping the pair firmly consolidating between the 21 and 50 day SMA.
I will be following the hourly charts for the next couple of days to monitor for pull backs using this bump and run reversal. The shorter line is a little steep for me, a break may just end in Consolidation, but on a longer pull back the lower line may be a good target.
JPY Getting The Attention While CAD Slowly Leaks
Like an old leaky tire, the USDCAD is slowly plodding along, taking price higher and higher. The interesting thing about yesterday and today's price action is that it has finally broken above the 38.2 Fib line of the move from March 09 highs to June lows, opening the way for a 1.1928 50% Retracement. I have previously identified the daily highs from 05/06 and 05/18 as important Resistance, but the 50% line may trump and those daily highs easily passed. Those following the blog for some time know that I am looking for a possible move to...hold onto your lower jaw...1.2605. This would require a significant shift in risk, USD growth prospects, equity outlooks and general growth sentiment around the globe. SO I don't think it will happen soon.
The Boss: Long Time Comin', 559 Points Profit Taken
Quoting the Boss "It's been a long time comin' but now it's here" My EURJPY trade finally closed when it got to point A. My initial target was 126.61, but I am thinking that it may take several more days to get there, several new trades are presenting themselves, so in the interest of taking my profit to free up capital, I exited after the bounce with 559 points in profit. Even though I had to babysit the trade for close to 2 months, I am ecstatic about finally closing the trade in the money.
DJIA Holding Lower
The index is supporting the notion that we may be entering a new phase of weakness in the market. As far as the bump and run reversal set up below goes, a break above the shorter line only targets a retracement to the longer top line. We'll have to see how that plays out. The shorter resistance line may keep the index falling for a few more days. Earnings start today, and should play a significant role in the near term outlook. As far as currencies go, USD and Yen get stronger on the indexes weakness and between the two; USDJPY usually rolls in the JPY's favor.
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Last Updated on Thursday, 09 July 2009 14:20 |
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