Ralph Shell @ 12:20 PM, Tuesday June 16 2009
EUR/USD Commentary and Trade Ideas
What a difference a day makes. Yesterday, at this time, the pair
was at the cusp of a downward plunge that took us under old spike lows
and elicited stops under 1.3800. This morning we are crawling back,
perhaps in response to higher oil and equities, and currently trading
at 1.39. It remains to be seen if the pattern of lower highs and lows
continues. A close on the hourly or H4 above 1.40 would be needed for
confirmation of a trend change. Russia is hosting representatives from
the BRIC countries at a town called Yekaterinburg which is located in
the Urals. Since a weaker dollar generally means stronger crude, and
oil is key to the Russians economic strength, a little dollar bashing
from Yekaterinburg might be expected. Try the short side of this pair
in the 1.3940 to 1.3990 level with stops 100 up. The US Fed, in it's
open market operations, is trying to keep a lid on rates, buying
government paper. Next week they will turn sellers, and again auction
an undisclosed amount of 2, 5 , and 7 year notes. There is no shortage
of people wanting to borrow money, but the US Treasury is the biggest.
Bias: Lower
Bias Term: Long
Support: 1.3820 1.3750 1.3530
Resistance: 1.3940 1.4050 1.4140
GBP/USD Commentary and Trade Ideas
The retreat from last week's highs around 1.66 has not been
significant. When this market does sell off, it grinds to the
downside, but on a turn about back up, it sprints. Market action makes
me want to buy this pair. We are currently trading at about 1.6400.
Try to buy a pullback to 1.6340 risking 100 points. The UK reported a
2.2% increase in the CPI this morning. The Brits successfully sold 7
billion pounds of 25 year gilts, as part of the 220B pounds needed to
pay for the year's deficit. A shortage of corporate profits and a lack
of bank financing means the private sector needs to aggressively issue
bonds to cover operating expenses and debt service. Will there come a
time when the private sector is crowded out by the public borrowing
needs, in either the US or the UK?
Bias: Higher
Bias Term: Long
Support: 1.6340 1.6290 1.6150
Resistance: 1.6390 1.6500 1.6620
USD/JPY Commentary and Trade Ideas
There are often days when market orders work a lot better than
limit orders. Yesterday was one of them as our 98.20 sell remained
unfilled, as we sadly watched a 200 point break from the bench. This
morning we had a 120 point rally from the low, but have subsequently
sold back down to .96.60. The frequency of hourly ranges exceeding 20
points makes me think there are some big players pushing the market
around. The latest COT report exposed commercials flocking to the long
side. Since they have more information and a lot more money than I, it
is best to trade with them. Try to sell the 97 level risking 100
points with a target down to the 95. level
Bias: Lower
Bias Term: Medium
Support: 96.50 95.90 95.00
Resistance: 97.30 98.50 99.50
USD/CHF Commentary and Trade Ideas
It looks like this market is reluctantly ending it's downtrend,
albeit without a lot of vigor. This morning we have fallen from a
recovery high of 1.0955 to the current level of 1.0835. If the market
sells off to 1.0785 try the long side, risking 100 points. Perhaps
Switzerland's attitudes are bolstered by the increased optimism of the
neighboring Germans but problems in the tourist and banking industries
persist.
Bias: Higher
Bias Term: Medium
Support: 1.0780 1.0710 1.0620
Resistance: 1.0880 1.0990 1.1100
USD/CAD Commentary and Trade Ideas
This morning the CAD sold off to the 1.1220 level briefly, and
then quickly rallied over 100 points to 1.1345. We are currently
trading lower versus the dollar at 1.1310 despite higher crude prices
today. Prefer to be long the USD for the moment in this pair, but I am
not bullish enough to buy at any price. My price order to buy is
around 1.12, but I'm inclined to wait to see future developments.
Bias: Higher
Bias Term: Medium
Support: 1.1280 1.1190 1.1130
Resistance: 1.1390 1.1440 1.1560
AUD/USD Commentary and Trade Ideas
This pair seems to be going with the flow. Yesterday was a bull
USD day and the AUD took a tumble, only to reverse back to the upside
today, trading currently at 79.95. While the trend lines to the upside
remain in place, the market has lost it's upside momentum. It will be
interesting to see if the pair can again trade above to 80 level, or
are we going to liquidate and sell off. The crowd is long but they
also have the profits.
Bias: Neutral
Bias Term: Long
Support: .7915 .7800 .7690
Resistance: .8000 .8075 .8220
NZD/USD Commentary and Trade Ideas
There is not much new in this pair. After the Monday global
appreciation of the dollar taking the Kiwi down to a little under
.6240, we have since recovered to .6350. The recent sideways pattern
has resulted in a cross over of the 9 versus the 18 day simple moving
average. I would rather be a seller rather than a buyer...just not
sure where.
Bias: Neutral
Bias Term: Long
Support: .6310 .6240 .6090
Resistance: .6350 .6420 .6520
Author: Ralph Shell - ForexRazor Analyst - Graduated from a small Ohio liberal arts college. Graduate studies in economics and history at Duke University. Ten years experience trading cash commodities in domestic and export markets. Former commodity analyst with Merrill Lynch in Chicago. Member of and floor trader at the Chicago Board of Trade for 18 years.