The Wizetrade FOREX Blog

USD News – 09:00 ET Home Price Index, 10:00 ET US Consumer Confidence

STRONG

Short                GBP/USD                    1.5825

Short                EUR/USD                    1.4500

Long                USD/CHF                    1.0420

Long                USD/CAD                   1.0900

WEAK

Long***          GBP/USD                    1.6000 / 1.6100

Short                USD/CAD                   1.0800

Short                USD/JPY                     89.50

The Morning Edge Chart of the Day is the MT chart for the CAD/JPY as we see selling pressure on the CAD which would be supported today by lower energy prices and selling in the US equity trading.

Yesterday’s Morning Edge Chart of the Day was the LT chart on the EUR/GBP with EUR strength.  Look for entry after a pullback against the current trend of EUR strength and GBP weakness. Despite a very bullish US equity market yesterday, we saw selling pressure on the EUR after comments from the ECB President Jean Claude Trichet showed that the ECB was not ready to exit quantitative easing until we see signs of USD strength.

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.

Good Morning Traders, this morning we have our eye on the EUR/JPY as the bullish Asian session moved the EUR higher, but the selling pressure in the early European trading session has reversed the gains and the pair is trading back below the open rate for the day.

I’m watching to see if a little profit taking after yesterday’s significant gains in the equity markets can push the pair back towards yesterday’s lows, but we will need to see selling in the equity markets to drive the EUR/JPY lower.

Positive data from the U.K. CBI realized sales helped put selling pressure on the EUR this morning as it dragged the EUR lower.

Here is the catch for the equity bears this morning, we have data from the US this morning for Home Prices and Consumer Confidence, and both are forecast to show improvement.  If this is realized it would be encouraging for the equity bulls, and would provide a lift for the EUR, and put selling pressure on the JPY, so this opportunity will need to see disappointing data from the US to continue selling this morning.

That being said, I would still watch for the possibility that the EUR could weaken in the afternoon.

So we will wait for the news from the US and if it disappoints, we will watch to see if the EUR weakness will continue to move the EUR/JPY lower.

USD News – None, watch direction of equity markets

STRONG

Short                GBP/USD                    1.5768

Long                USD/CAD                   1.1000

WEAK

Long*****      GBP/USD                    1.6000

Long                EUR/USD                    1.4719

Short                USD/JPY                     89.00

Long                AUD/USD                   .8715

The Morning Edge Chart of the Day is the LT chart on the EUR/GBP with EUR strength.  Look for entry after a pullback against the current trend of EUR strength and GBP weakness.

Friday’s Morning Edge Chart of the Day was the ST Chart for the GBP/JPY as Thursday night we saw a follow through on GBP selling to provide a very strong short side move for the pair.  The selling pressure followed through as we saw additional equity selling to start the week in the Asian Markets that drove the GBP/JPY pair more than 340 pips to the short side before recovering much of the drop in the overnight.

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.

First of all, I would like to reiterate my “Forex wrap” from yesterday…

A very strong day for the USD…and as one trader just asked me…”is this the tip of the iceberg?” My thoughts…it could be. Talk of the town today is that the markets posted a big reversal day yesterday and followed through today. I would suspect that that this one could be for real for a couple reasons:

1. The DOW is at an upper range of an upward sloping channel seen in Wizetrade option price charts…daily chart. We reversed off the top yesterday.
2. Key leading indicator in the FX is the USD/CAD which is leading (in my opinion) the USD around. A huge rally of 250 pips today in that pair has me believing there could be more USD strength in store.
3. GOLD failed again above 1000 and now we trade below the figure
4. OIL is also on its back foot and looks to be heading lower

My two cents is…if the USD can get past the G20 without getting hurt, we are going to see more USD strength in the near term. Iceberg? We will see about that…there are a lot of looming issues for the USD…but the over riding theme may be “risk aversion” if anything.

The EUR/USD had a major reversal today from the 1.4800 highs breaking through the 1.47 support trading as low as 1.4627. Resistance is at 1.4700 and I would watch this area this evening as a reversal spot. Support is at 1.4600.

The GBP/USD is in the process of trading right into the classic head and shoulder’s formation. The neckline was at 1.6100…so now we are looking for resistance levels to pivot off of. I am thinking between 1.6130-1.6200 should provide real good resistance. Support is strong at 1.6000.

USD/JPY stock between 91.60 and 90.00 again. A move below 90.00 would really affect all JPY pairs…especially the Chart of the day, AUD/JPY.

The difference from yesterday to today is the GBP/USD did break 1.60 and is now trading firmly below it (which is bearish) and the USD/JPY is now trading below 90.00 (which is also bearish). Gold sank again and in now below 1000 and Crude is close to building on a head and shoulder’s formation which could send it to the mid 50’s.

My hesitation is…well a couple of things. We have G20 wrapping up today, some flaring up with Iran…Both of these events bring event risk for the weekend…and I don’t know about you…but for me there is a lot of risk…too much to have exposure…

But the key will be on Sunday night or Monday…we are very close to testing and/or breaking in the USD Index at 77.33. This is strong resistance, and I think if this level gives way, the EUR/USD would finally break 1.4600 to the downside and we could see more near term USD strength.

Next week the key event risk is Non Farm Payrolls, but earlier in the week there are other events such as retail sales from AUD on Tuesday, CAD GDP on Wednesday, PMI out of China Wednesday night and ISM and Pending Home Sales from the US on Thursday.

Have a good weekend.

Blake

USD News – 08:30 ET Durable Goods, 10:00 New Home Sales

Asian Markets sold off overnight, Early European trading moved lower to start the day, but have recovered to post some slight gains early this morning ahead of the open of the US trading session as we wait for Durable Goods, and then later in the morning the New Home Sales.

STRONG

Short                GBP/USD                    1.5900

Short*              EUR/USD                    1.4600

Long*              USD/CHF                    1.032 / 1.04

Short*              AUD/USD                   .8600

WEAK

Long                EUR/USD                    1.4720

Short                USD.CHF                    1.0200

Short                USD/JPY                     90.00*

The Morning Edge Chart of the Day is the ST Chart for the GBP/JPY as overnight we saw a follow through on GBP selling to provide a very strong short side move for the pair.

Yesterday’s Morning Edge Chart of the Day was the ST chart of the AUD/JPY as we looked for a possible breakout.  We did get the break out as the equity bears came out to drive the AUD lower to 78.08 from 79.40.  The AUD recovered some overnight, but has moved towards the new support floor again this morning at 78.20.

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 – 08:30 ET weekly employment, 10:00 Existing Home Sales

STRONG

Short                GBP/USD                    1.6130

Long                USD/CAD                   1.0770

WEAK

Long                EUR/USD                    1.4800

Short                USD/CHF                    1.0200

The Morning Edge Chart of the Day is the ST chart of the AUD/JPY as we look for a possible breakout.  Bullish markets and a weaker USD will support the AUD, and Bearish markets with a stronger USD and weaker commodity prices will support the JPY.  Waiting to see the markets reaction post Existing Home Sales.

Yesterday’s Morning Edge Chart of the Day was the ST Chart for the NZD/USD with NZD strength.  The NZD pulled back nicely ahead of the open bell to 0.7206 and then advanced into the afternoon to 0.7280 before selling pressure returned late in the US trading session dropped the pair to an evening low of 0.7161.  The pair is possibly forming a shoulder on the right side of the 180 minute chart. If we see selling pressure in the US session for equities it could help complete this pattern today.  Equity buying would break up the pattern.

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.

Astrid next to Long or Short means counter trend, and smaller amounts should be traded when accepting these opportunities.

Good Morning Trader’s, this morning we are watching the USD/SEK as selling pressure on the USD continues to push the pair lower.

We have weekly employment data out this morning at 08:30 ET and then existing home sales at 10:00 ET.  If the forecast for existing home sales is correct, it could lend some support to the equity investors, and as such, it will provide additional support to the SEK.

The long term trend is very bearish for the USD in relation to the SEK, but we have room for the pair to move lower.

A little selling pressure early in the European session and slightly lower Equity Futures are providing some support for the USD, but if the equity investors are not too nervous about the G-20 meetings today and tomorrow, we could get the buying in equities, that would allow this pair to resume its downside move.

USD News - 14:15 ET FOMC statement and rate decision

STRONG

Short                            GBP/USD                    1.6330

Short                            EUR/USD                    1.4730

Long*                          USD/CAD                   1.0770

WEAK

Long                            GBP/USD                    1.6475

Long                            EUR/USD                    1.4860*

Short                            USD/CAD                   1.0600****

NOTE: We may see many investors sitting on their hands today ahead of the FOMC Statement.  The expectation is that the US Fed will hold rates unchanged, but the market is looking for additional comments from Ben Bernanke about previous statements that the US economy is technically exiting the recession, and also an ear will be given about the structure of a future exit strategy as the flood of liquidity is eased back out of the markets in a manner that will not hamstring recovery.

The Morning Edge Chart of the Day is the ST Chart for the NZD/USD with NZD strength.  We would like to see a pullback for a more favorable entry, and we could get some USD strength with the FOMC statement this afternoon.

Yesterday’s Morning Edge Chart of the Day was the MT chart for the USD/CAD as we watched to see if the USD weakness would allow the pair to break down.  The pair moved very little during the US session, and support is still in place at 1.0660 / 1.0600.

Yesterday I was watching the AUD/JPY for possible strength with bullish equity markets, but despite a nice run-up at the end of the day in equity markets, the AUD sold off from resistance on the 180.  It found support at 79.30 overnight and advanced back to 79.80. Resistance for the pair is just below 82.00 on the MT, but we need to clear resistance at 80.00.

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.

Astrid next to Long or Short means counter trend, and smaller amounts should be traded when accepting these opportunities.

USD News –  None, Asian Markets mixed but modestly bullish overnight, Early European trading was strongly bullish and is holding on to its gains, and US Futures are pointing higher well ahead of the open bell this morning.  We will watch to see if the markets continue to push towards 10,000 in the Dow, despite warnings that many stocks may be overvalued.  Watch the S&P at 1100.

STRONG

Nada, Zilch, Nothing with USD weakness overnight and bullish futures.

WEAK

Long                GBP/USD                    1.6400*

Long                EUR/USD                    1.4866

Short                USD/CHF                    1.0200

Short                USD/CAD                   1.0600*

Long                AUD/USD                   .8775

The Morning Edge Chart of the Day is the MT chart for the USD/CAD as we watch to see if the USD weakness will allow the pair to break down.  Speculation that inventories are being depleted in Oil (Wednesday weekly report) could also assist the CAD as Oil prices are pushing higher.

No Eye on Exotic this morning, but I like the AUD/JPY long as the JPY could not strengthen yesterday, and the AUD continues to push the pair towards highs on the 180 minute chart.  Previous resistance for the pair is just below 82.00 on the MT.

Yesterday’s Morning Edge Chart of the Day was the Short Term chart for the USD/JPY as we saw USD strength with some selling pressure in the equity markets. Sideways markets took a toll on the early USD strength, and then lead to a sell off of the USD overnight last night.  US Futures are strong well ahead of the open bell.

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 – 10:00 ET Leading Index (low impact), movement today will be about equity investor risk.  Early on it looks like some risk aversion as the USD strengthened overnight, but sentiment could change after the open.

STRONG

Short                GBP/USD                    1.6100*

Short*              EUR/USD                    1.4640*

Long*              USD/JPY                     92.60

Long*              USD/CHF                    1.0370

Long*              USD/CAD                   1.08 / 1.0870

Short*              AUD/USD                   .8550

Short*              NZD/USD                   .6970

WEAK

Long                EUR/USD                    1.4730

Long                AUD/USD                   .8650

The Morning Edge Chart of the Day is the Short Term chart for the USD/JPY as we see USD strength with some selling pressure in the equity markets.

Friday’s Morning Edge Chart of the Day was the 720 minute light for the AUD/NZD pair as we observed a wedge formation. The pair moved sideways throughout the US trading session on Friday, but dropped from 1.2235 to 122.15 to close lower.  The pair recovered overnight, but is moving lower ahead of the open bell this morning, but has not challenged the Friday low 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.