USD News – 9:45 ET Chicago PMI
STRONG
Short GBP/USD 1.6000* Break support
Short EUR/USD 1.4200
Long USD/CAD 1.1125* Oil prices CAD GDP 8:30 ET
Long USD/CHF 1.0660
Short NZD/USD .6775
Short AUD/USD .8300
WEAK
Long EUR/USD 1.4330
The Morning Edge Chart of the Day is the 180 minute chart for the AUD/USD as we see selling pressure in the equity markets and falling commodity prices ahead of the open of the US Trading session.
The values in the T-chart data represent the next levels of significant support or resistance with trade opportunities to these levels, or breakouts beyond these levels. The use of Astrid denotes key sustained support or resistance levels, or counter trend opportunities in the market.
And that’s a wrap folks…the week is over! It’s been a wild ride this week with the USD…at first it was bought up, end of the week it was sold off…not a lot of rhyme or reason for the moves considering the stock market didn’t move all that much this week. Just summertime blues with low liquidity and some big players moving the market back and fourth. I have to imagine that going into next week, there will be a few players around before taking the Labor Day weekend off. Reasons? I’ll give you one…Non Farm payroll. The single most important data of the month will be released next Friday, so get ready for some volatility! Hopefully…
There will be some other key pieces of data too:
NZD has business confidence Sunday night, Monday late night AUD has rate announcement (expected to keep them unchanged) and GDP Tuesday night. Tuesday also there is ISM and Pending home sales out of the USD. Thursday we have ECB rates and press conference (which is a market mover) and employment numbers out of USD and CAD on Friday….busy week before the holidays!
The EUR/USD ended the day on a weak note…but this week the pair was really just contained to a 200 pip range. But taking a step back, the EUR/USD is in a big channel defined by 1.44 to 1.40. I would imagine since we are towards the upper end of the channel, I would think there would be selling pressure until we reach at least 1.4200.
The GBP/USD managed to recover today and yesterday, but still locked in a multi week downtrend. 1.6400 should act as real good resistance and support at 1.6150.
The USD/JPY is bouncing back and fourth between 94.5 and 93.2. Until we get a real big move out of stocks…this pair could remain confined.
Have a nice weekend
Blake Morrow
Chief Currency Strategist
USD News – Personal Consumption
STRONG
Short* EUR/USD 1.4325
WEAK
Long* GBP/USD 1.6375
Long EUR/USD 1.4400*
Long AUD/USD .8475
Long NZD/USD .6900*
Short USD/CAD 1.0717
The Morning Edge Chart of the Day is the Short Term Chart for the USD/SEK with new selling pressure on the USD and strength for the SEK with buying pressure in the equity markets.
The values in the T-chart data represent the next levels of significant support or resistance with trade opportunities to these levels, or breakouts beyond these levels. The use of Astrid denotes key sustained support or resistance levels, or counter trend opportunities in the market.
USD News – Preliminary US GDP
STRONG
Short GBP/USD 1.6000***
Short EUR/USD 1.4200***
WEAK
Long EUR/USD 1.4280*
Long AUD/USD .8386
Morning Edge Chart of the Day is the Short Term Chart for the USD/JPY with a nice short side bounce. Caution: We are at support for the pair ahead of the US GDP numbers this morning. If the Gross Domestic Product numbers disappoint the equity investors this morning we will look for a break below support at 93.50 to open up the selling pressure.
The values in the T-chart data represent the next levels of significant support or resistance with trade opportunities to these levels, or breakouts beyond these levels. The use of Astrid denotes key sustained support or resistance levels, or counter trend opportunities in the market.
Eye on Exotics Thursday 08272009
Good Morning Traders. This morning I’m on the fence for two pairs, but in both pair relationships I’m watching for GBP weakness after the US GDP numbers come out.
In scenario one, we look for the GDP numbers to disappoint creating selling pressure in the equity markets allowing the JPY to strengthen further on an already weak GBP which is seeing selling pressure across all pairs.
In scenario two, we look for the US GDP numbers to provide an upside surprise which would be supportive of the equity markets, and could allow the AUD to continue to strengthen on an already weak GBP.
So in either scenario, I’m looking to short the GBP. Bad GDP numbers, weak equities, strong JPY. Good GDP numbers, strong equities, and strong AUD.
So one more time; US GDP Bad, I’m looking for short side opportunities on the GBP/JPY. US GDP Good, I’m looking for short side opportunities on the GBP/AUD.
USD News – Durable Goods, New Home Sales, Crude Oil Inventory
STRONG
Short GBP/USD 1.6000
Short EUR/USD 1.4250*
Long USD/CAD 1.0940
Long USD/CHF 1.0680
Short* NZD/USD .6800
Short AUD/USD .8300
WEAK
Long EUR/USD 1.4375
Long NZD/USD .6900
Morning Edge Chart of the Day is the Short Term Chart for the AUD/USD as we see the resistance points moving lower, and selling pressure on the AUD if the markets turn bearish.
The values in the T-chart data represent the next levels of significant support or resistance with trade opportunities to these levels, or breakouts beyond these levels. The use of Astrid denotes key sustained support or resistance levels, or counter trend opportunities in the market.
This morning we are watching the AUD/JPY pair as the equity markets digest the housing and consumer confidence data for the US out later this morning.
The higher interest rate AUD has enjoyed the buying pressure in the equity markets since March, but is losing some steam as orders from China have slowed and in some cases have been cancelled as global demand has not yet kept pace with China’s desire to ramp up production.
This reduction in demand has removed the recent sentiment for near term interest rate hikes from the RBA, and slowed the progress of the AUD’s ascent.
The equity markets could give the AUD a boost with the housing and consumer confidence numbers this morning, but if we see the bears return as we move into the afternoon, then the JPY stands to strengthen, and the AUD should retreat giving us new day trade opportunities on the short side.
Let’s take a look at the buying and selling pressure for the pair with new selling pressure on the day.
Keep in mind that I’m watching for this opportunity to mature as we move towards the afternoon. I’m watching to see if the S&P slips back below 1000, and the NASDAQ moves back below 2000.
USD News – Housing Price and Consumer Confidence, Bernanke Confirmation for 2nd term.
STRONG
Short GBP/USD 1.6275*
Long USD/CAD 1.0800*
Long USD/CHF 1.0640*
WEAK
Long EUR/USD 1.4375
Long NZD/USD .6900*
Short USD/JPY 93.50
Short USD/CAD 1.0750*
Long AUD/USD .8470
Short USD/CHF 1.0550*
This morning’s Edge Chart of the Day is the MT chart for the EUR/GBP as we watch for the possibility of a break out above .8800.
Yesterday’s Morning Edge Chart of the Day was the Long Term Chart for the EUR/SEK as recent bullishness in the equity markets has allowed the SEK to strengthen. The EUR strengthen yesterday, but is seeing some selling pressure this morning as US Index Futures move higher. Warning, we could see volatile shifting markets this morning with the data releases.
The values listed in the Morning T Chart represent levels of support or resistance for the currency pairs.
USD News –None, CAD news at 08:30 ET
STRONG
Short GBP/USD 1.6300
Short EUR/USD 1.4200
Long USD/CHF 1.0630*
Long USD/CAD 1.0840
WEAK
Long GBP/USD 1.6600 / 1.6660
Long EUR/USD 1.4350
Short USD/CHF 1.0550*
Long NZD/USD .6880
Short USD/CAD 1.0760
The Morning Edge Chart of the Day is the Long Term Chart for the EUR/SEK as recent bullishness in the equity markets has allowed the SEK to strengthen. We need continued bullishness in the equity markets for the SEK strength to continue.
Friday’s Chart of the Day was the bearish wedge formation on the 180 minute chart. Due to the favorable housing data, and Bernanke’s upbeat comments on future interest rates, the GBP strengthened instead of completing the bearish pattern. The break point on the high side is 157.52 should bullish markets continue to weaken the JPY.
The values listed in the Morning T Chart represent levels of support or resistance for the currency pairs.
Commodities
Coal Rally Ending as China Slows Imports to Open Idle Mines, Boost Surplus China’s unprecedented appetite for imported coal is about to be sated, jeopardizing a five-month rally in prices by adding to a global surplus of the fuel used in power plants from Perth to Chicago.
Aussie Options Turn Bearish as Odds of Rate Increase Diminish With China Currency traders who’ve made Australia’s dollar the third-best performer in the world this year say the rally may be over.
Equities
Australian, N.Z Dollar Climb on Stocks, Demand for Higher-Yielding Assets The Australian dollar rose for a fifth session, the longest winning streak since June, as improving economic data sparked an advance in stocks and demand for higher-yielding assets. New Zealand’s currency also gained.
Today’s market was a little confusing for traders as 2 key events took place at once…the Existing Home Sales Numbers and Ben Bernake’s speech in Wyoming. At first glance…the numbers that flashed across my screen looked really good for home sales…heck, it was a really good number! USD weakened…EUR and GBP/USD rallied…and then…after reading the speech from Ben Bernake, the USD quickly reversed. Why? Well, it’s the optimism that did it…trader’s are now starting to shift the view from “rates at zero” for a long period of time…to “maybe rates may go higher sooner rather than later” and this led to some support for the USD. On a day like today, with the DOW up over 100 points, we would expect a little bigger sell off in the USD…but Dr. Bernake came to the rescue.
The EUR/USD shot up to 1.4370 after the news, then dropped to 1.4275 shortly after. This level was previous resistance, and acted as good support and should act as good support going into Sunday evening. Resistance will be fierce in the 1.44 range.
The GBP/USD was an underperformer again today and gave us yet another opportunity to short the pair above the 1.66 level. Whether you were able to peel off a short or not is not the point…the point is the GBP is generally weak. And in the event the USD starts to gain some strength, the GBP/USD will be propelled to the 1.6300 level, and possibly to 1.6000 in the coming week(s).
The USD/JPY got a little of a boost today with the General uptick in the stock market but spent most of the day below 94.50 which still is good resistance. Support will come in at today’s low at 93.50 which is good support…now tested twice in the last 3 days.
Next week we have GDP numbers out of the US and GBP which will be the highlight towards the end of the week.
Have a good weekend!
Blake
