BabyPips.com Forex Forum - The Analyst Arena http://forums.babypips.com/ Technical and fundamental analysis from various sources. Here you can get different perspectives on the markets through the eyes of different analysts. Also, go to the School of Pipsology and find out what kind of trader you are. en Wed, 19 Jun 2013 18:36:04 GMT vBulletin 60 http://forums.babypips.com/images/misc/rss.png BabyPips.com Forex Forum - The Analyst Arena http://forums.babypips.com/ USDCHF: Eyes A Return To The 0.9130 Level http://forums.babypips.com/analyst-arena/54983-usdchf-eyes-return-0-9130-level.html Wed, 19 Jun 2013 08:47:09 GMT USDCHF – The pair’s outlook remains lower with the possibility of returning to the 0.9130 level on the cards. As long as it holds below its support... USDCHF – The pair’s outlook remains lower with the possibility of returning to the 0.9130 level on the cards. As long as it holds below its support turned resistance at the 0.9205 level, USDCHF looks to weaken further. This will leave the pair targeting the 0.9064 level where a violation will aim at the 0.0921/00 levels. Its daily RSI is bearish and pointing lower supporting this view. On the upside, resistance resides at the 0.9205 level, its April 17’2013 low and then the 0.9392 level. A breach will target the 0.9450 level and then the 0.9566 level. Above here will aim at the 0.9838 level, its psycho level. On the whole, the pair continues to face downside pressure.

]]> The Analyst Arena FXTechstrategy http://forums.babypips.com/analyst-arena/54983-usdchf-eyes-return-0-9130-level.html Vantage FX | Stocks up, Aussie down as markets pick winners | 19 June 2013 http://forums.babypips.com/analyst-arena/54968-vantage-fx-stocks-up-aussie-down-markets-pick-winners-19-june-2013-a.html Tue, 18 Jun 2013 22:58:29 GMT *Recap* Is it possible that for all the criticism that has been directed at the Fed that the nuances are actually starting to become apparent... Recap

Is it possible that for all the criticism that has been directed at the Fed that the nuances are actually starting to become apparent between a “taper” and a withdrawal of stimulus? I’ll have a chat about it below but as a recap stocks did really well last night, better than I would have thought and the Euro pushed further into nose bleed territory making a high of 1.34 on better than expected German data.

Bonds haven’t reacted terribly though to the stock rally which suggests a more discerning view that is being taken by global investors as we all await the FOMC announcement in about 20 hours time.

Is the market getting used to the “taper”

My style is to combine fundamentals and technicals in differing measures depending on the time frame. Short term time frames naturally see an overweight on technicals while longer term I put more balance and sometimes weight on fundamentals. Remember though I’m talking about investment fundamentals not economic fundamentals – they are different.

Anyway I have been looking at my charts over the past week and wondering if the Fed might have achieved its goal – could it have given the market enough time and room between discussion and action that the market becomes desensitised and a bit more discerning. Of course I could be wrong but the very good thing that is happening is this discernment among asset classes.

One of the great terriblenesses of the GFC has been the correlation to one of so many markets both during the intense period of weakness and in a risk on and risk off meme since then. It is a topic that was taken up by John Plender in a great article in the FT overnight. Now of course it is a subscription service and one of only 4 I have on the planet (the others being the WSJ, A.Garry Shillings newsletter and of course MacroBusiness) so the key point he makes, among many good ones in this context is,

Quote:
The good news about the new rules of the game is that markets are beginning to differentiate more carefully between countries and assets on the basis of fundamental analysis, which is a vast improvement on knee-jerk risk-on, risk-off behaviour.
This is brilliant for asset allocators and traders and investors who are actually any good at their job – it means your skill can dominate their luck but more generally for traders – and lets face it that is who this note is aimed at, it means that you need to be more discerning (there is that word again) about selling Aussie because Euro is down or buying the ASX because the Nikkei is rallying and so on.

So tho the charts and I think we can see in the S&P 500 the potential for a huge rally if the Fed gets its words right. Now of course you may find that strange given I have had a downside bias over the past few weeks but this bias has and is always tempered by the price action and the price action has not been too bad and gives a clear level to have a stop and to take longs against.



1593 – so call it 1590 – is the level of the orange line in the chart above it’s been a top and its been a base and for me it is a key level for the S&P 500 and for the outlook over the rest of the 2013 for Stocks. It seems a long way away with the S&P 500 closing at 1652 overnight but unless or until it breaks the market is in good shape. Equally though if the Fed fluffs its lines this is the level to watch.

Anyway at the close the Dow was up 138 points or 0.91%, the Nasdaq rose 0.37% and the S&P 500 was up 13 points to 1652 for a 0.79%.

In Europe the ZEW helped the Euro above 1.34 but didn’t really resonate with the DAX which only rose 0.17%, the FTSE was up 0.69%, the CAC fell a little, down 0.07%, Milan was virtually unchanged but Spain rose 0.54%.

FX traders are picking winners

We are not seeing a rote USD up or USD down meme in FX markets at the moment which makes them more interesting and for me more fun. It means the crosses can really get some chutzpah one way or another in the months ahead which can make for some profitable trading opportunities – or I should say some more.

Overnight as I noted above the Euro rallied from 1.3324 to 1.3415 and sits at 1.3395 – I still think it is overstretched both technically and fundamentally but I have to provide a disclaimer to the fact that I generally can’t understand why anyone would pay more than 1 US dollar for 1 Euro now or ever and I think in time EURUSD is headed back to 1.10 at a minimum. One this note Plender in the FT article above also said,

Quote:
The less good news is that the eurozone still hangs like a dark cloud over the global economy, in recession with no comprehensive solution in sight to the problem of imbalances and a banking system that is undercapitalised and overloaded with sovereign debt. It is curious that the euro strengthened against the dollar in the recent turmoil. A reckoning may be around the corner.
As if to highlight the plight of European Banks yesterday Danske bank was embroiled in a punch up with the regulator over the amount of capital it holds. Now I know that Denmark is not in the Euro but it just highlights the plight of European banks in General.

The key topside level for the Euro is 1.3449 which is the 200 week moving average.

USDJPY is up 100 points from the low of yesterday to sit at 95.38 as it rallies away from the important 38.2% retracement level below 94. When I look at USDJPY and I look at the S&P and I look at the Euro and I look at the GBP I see a market set up that is very supportive of stocks and the US dollar if the Fed can get its lines right tonight. Short term target on USDJPY is 96.94, GBP is 1.5547 and then 1.5405, Euro is 1.3250/60.

Looking at the Aussie and its price action it is clear that it is falling out of favour as investors and traders globally are making the more nuanced bets that I opened this mornings note with as they sell Aussie and buy other currencies. AUDUSD fell yesterday to a low of 0.9437 largely as a result it seems because the RBA left the door open to more cuts in the minutes released at 11.30. When I first read the minutes I thought they were very even handed and went long AUD which of course turned out as a dumb idea and after draining 20 points it was clear I was wrong so I went short and stuck with it till last night and I am short again this morning.



The 4 hour charts suggest a test back to 0.9425 and perhaps, if that gives way back to the low of around 0.9330. The dailies suggest it might be oversold but if the USD strengthens like I think it might then the Aussie will still find sellers on any rally.

Commodities

Morn signs of discerning trading in commodities with differing price moves. Nymex Crude was up 0.89% to $98.64 Bbl, Gold down 1.17% to $1367, Silver off 0.89%, Dr Copper off 1.45% (not hard to see why Aussie is pressured), Corn and wheat rose 0.67% and 0.96% respectively while soybeans were unchanged.

Data

New Zealand Current account this morning and then the Australian Leading Index from Westpac, Bank of England minutes tonight before the Fed announcement and Bernanke press conference which is so clearly the key to every thing. Lets hope they don’t fluff their lines again.

Thoughts, comments, queries together with frank and fearless feedback all welcome. I’m happy to answer questions or comments on the comment stream wherever I can.

NB: Please note all references to rates above are approximate and should not be used for trade reference ]]> The Analyst Arena Vantage FX Analyst http://forums.babypips.com/analyst-arena/54968-vantage-fx-stocks-up-aussie-down-markets-pick-winners-19-june-2013-a.html EURUSD: Bullish, Targets Further Upside http://forums.babypips.com/analyst-arena/54963-eurusd-bullish-targets-further-upside.html Tue, 18 Jun 2013 18:39:48 GMT EURUSD: With EUR seen trading slightly above the 1.3400 level, a convincing break and hold above that level is expected. A follow through higher... EURUSD: With EUR seen trading slightly above the 1.3400 level, a convincing break and hold above that level is expected. A follow through higher above here will turn focus to the 1.3450 level with a breach setting the stage for more gains towards the 1.3500 level. Its daily RSI is bullish and pointing higher supporting this view. On the downside, support lies at the 1.3318/30 levels and then the 1.3242 level, a reversal of roles as support is likely to occur here and turn it higher. However, if broken, further decline could follow towards the 1.3200 level. Further down, support comes in at the 1.3100 level and possibly lower towards the 1.3000 level. All in all, EUR continues to retain its medium term upside bias.

]]> The Analyst Arena FXTechstrategy http://forums.babypips.com/analyst-arena/54963-eurusd-bullish-targets-further-upside.html <![CDATA[Why There's More US Dollar Weakness to Come]]> http://forums.babypips.com/analyst-arena/54942-why-theres-more-us-dollar-weakness-come.html Mon, 17 Jun 2013 23:15:00 GMT BK Forex...]]>

-- Boris Schlossberg, BK Forex Trading Signals ]]> The Analyst Arena BKForex http://forums.babypips.com/analyst-arena/54942-why-theres-more-us-dollar-weakness-come.html Vantage FX |Aussie weaker on a quiet night as markets await Fed | 18 June 2013 http://forums.babypips.com/analyst-arena/54941-vantage-fx-aussie-weaker-quiet-night-markets-await-fed-18-june-2013-a.html Mon, 17 Jun 2013 22:32:11 GMT *Recap* Considering that Jon Hilsenrath wrote an article almost guaranteeing the Fed taper yesterday morning and the FT followed up with a similar... Recap

Considering that Jon Hilsenrath wrote an article almost guaranteeing the Fed taper yesterday morning and the FT followed up with a similar piece overnight stocks did pretty well all things considered. Even FX pairs were fairly quiet relative to what we have seen lately and commodities ended fairly flat.

So of the options available to markets in the lead up to the FOMC Wednesday night they choose the quiet one, which is of course great for a change.

Fed Talk intensifies

I saw the Hilsenrath article yesterday morning Asian time just after it was released and it was really interesting in that he uses language that suggests he truly is the “Fed Mouthpiece”. His key point was that the Fed isn’t going to be tapering this month but they are likely to continue with forecasts that suggests they will and he notes that even though most private forecasters reckon the Fed might be disappointed by the growth the metric that matters most to them, employment, is improving. He writes,

Quote:
When the Fed launched its latest round of bond buying last September, it said it wanted to see substantial progress in the labor-market outlook before ending the program.

Back in September, the economists surveyed by the Journal were projecting monthly growth in jobs of 142,000 in the year ahead. In the latest survey, they projected 183,000. In other words, they have become more optimistic about job growth since the Fed’s program was launched. Meantime, their unemployment forecasts are coming down, another sign of improvement. Their forecast for the December 2014 unemployment rate was 7.1% last September and 6.7% in the latest survey. The rate was 7.6% in May.

That’s progress—and the kind that matters most to Fed officials now.
So I’m expecting talk of tapering, but no actual tapering and a focus on the improving labour market. But I am not sure how the market is going to take this message.

Last night though stocks didn’t care, well they did because they finished off their highs but on balance stocks around the world did much better.

Asia kicked off the better mood with the Nikkei up 2.73%, the Hang Seng up 1.22% and the Sensex and Straits Times up 0.77% and 0.68% respectively. This helped Europe kick off nicely with the CAC and DAX up strongly at 1.55% and 1.08% respectively. The FTSE in London was up just 0.34% while its counterpart in Milan rose 0.25%. Spanish stocks rose 0.81%.

In the US stocks also ended higher but the question is whether the strong rise in the New York Empire Manufacturing index from -1.43 last to 7.84 in June. I think it reinforces Hilsenrath’s point above that the Fed is going to taper – so it is all about their communication now isn’t it.

At the close the Dow was 0.73% higher, the Nasdaq rose 0.83% and the S&P finished at 1639 up 0.75%.

FX Markets quiet for a change

FX markets were fairly quiet for a change displaying the sort of volatility that we see in what we might call “normal” times which is of course welcome. The Euro traded a 1.3316-1.3379 range to marginally continue its rally but it is looking a bit over extended. GBP likewise was fairly quiet up just 0.14% on the day at 1.5732 and it too looks like it might roll over if it doesn’t kick on this week while the yen had a negative day but the tractor beam of the 38.2% retracement level of the big rally seems to be keeping it anchored below 95. Only a break of 93.60/70 though opens up a deeper move and if anything support is expected near term.

Unless of course the Fed walks back from tapering and then all of the above is redundant.

Looking to the Aussie I wanted to use it this morning as a lesson between what should or could happen and what does or did happen. Yesterday in my CFTC Commitment of Traders Report I talked about the fact that the big Spec traders are as short as they have ever been. That makes the Aussie vulnerable to a snap back and many twitterarti were commenting to that effect yesterday. Indeed I noted myself that the change of a rally to and through 97 is on the cards.



But that is not the way I traded it – I traded the market in front of me yesterday and I went to bed short AUDUSD. Certainly I didn’t capture all of the move as I wasn’t expecting a move back to 0.9507 but rather into the 0.9550′s but as you can see in the chart above the AUD traded nicely from a techincal perspective after breaking the hourly uptrend it ran to the 200 hour moving average before rallying. It really was a beautiful technical move and reinforces that my “system” works as well on hourly charts as it does on the Dailies, Weeklies and Monthly charts – that is why I say my process is time invariant. It doesn’t always work of course we all have trades that simply don’t work but it does set up high probability trades.

And it is a lesson in the difference between trading and rhetoric – there was every reason based on market positioning to think the rally from yesterday’s lows had further legs but like I suggested there are lots of sellers around and in the end I traded the market not the rhetoric and my account benefitted from it.

Please note for all the trading I am doing I am holding a core small short Aussie position and will do for the next little while.

Commodities

All boring on the commodity front with markets seemingly becalmed as we run up to the FOMC. Of course this was one of two scenarios we might have seen and both come about because of a lack of players. Sometimes as people pull out of the market we see wild volatility, like the Aussie, while at others we see tighter ranges because the catalysts are lacking.

So at the close Nymex Crude was 0.02% higher at $97.87, Gold was -0.28% at $1383 and Dr Copper was -0.22%,

Data

The release of the RBA’s minutes will be important for the Aussie Dollar and Australia interest rates. Chinese FDI is out while the UK has a raft of inflation data before the ZEW survey in Germany and the BoE inflation letter. In the US it’s CPI, housing starts, building permits and the Redbook index.

Thoughts, comments, queries together with frank and fearless feedback all welcome. I’m happy to answer questions or comments on the comment stream wherever I can.

NB: Please note all references to rates above are approximate and should not be used for trade reference ]]> The Analyst Arena Vantage FX Analyst http://forums.babypips.com/analyst-arena/54941-vantage-fx-aussie-weaker-quiet-night-markets-await-fed-18-june-2013-a.html Vantage FX |Markets enter a vacuum awaiting the FOMC | 17 Jun 2013 http://forums.babypips.com/analyst-arena/54911-vantage-fx-markets-enter-vacuum-awaiting-fomc-17-jun-2013-a.html Sun, 16 Jun 2013 23:16:16 GMT *Recap* Stocks in the US ended the week under pressure as the Yen surged again and people reacquianted themselves with the relationship between... Recap

Stocks in the US ended the week under pressure as the Yen surged again and people reacquianted themselves with the relationship between USDJPY and the S&P 500. Data in the US was weaker than expected and the weekend just bought us a couple of days closer to the most important Fed meeting, probably announcement, of the Year this week.

The pressure remains on markets as we await Helicopter Ben

Since May markets have been under pressure as the Fed has signalled that it is actively contemplating when it will taper and when Bernanke and others added that it could be as soon as the next few meetings.

My sense is and has been that the Fed has figured out that the rally in stocks over the first 4 or 5 months of the year in the US and elsewhere threatened to blow an ugly asset bubble that could make the cure for the economic malaise worse than the disease. So this week is going to be very interesting and the language is terribly important for both bulls and bears.

The market shouldn’t fear tapering, is is just a slowing of the rate of bond buying not the halting and certainly not an increase in interest rates and I guess this is the message I expect the Fed and Bernanke in the press conference after to try to get across. But the market does fear tapering and as a behavioural finance/economics guy that’s what I am watching – I see this week’s meeting as a digital option. the market is going to ignite one way or the other depending on what the FOMC does and says.

So it is a very cautious time particulalry in this early week vacuum.

FX Volatility continues

USDJPY is at 94.22 this morning after making a high above 99 at one stage early last week. Even given the incredible volatility of the recent past this move on the week was phenomenal. Indeed the 20 day ATR is on a steady climb toward 200 points which is double what we saw in Feb-April and almost 4 times a big a daily range as we saw in the back end of last year.

This is one of the reasons the levered bets have been coming off the table. If we assume, as would be fair, that investors sold Yen and Bought dollars as the Yen selloff became obvious and then invested those proceeds into the US stock market and or emerging markets and maybe some Aussie dollars then we get a leveraged levered bet on purely Central Bank actions by the Fed and BoJ.

But when the Yen reverses the easy money isn’t as easy and positions get closed which is what we have seen over the past few weeks.



The chart above is USDJPY on the dailies and you can see it has pulled up at the 38.2% Fibo retracement support, or just above it. A break of this 94.60 level would open a move toward 90-91.

The Aussie Dollar is front and centre to any debate about free money, global growth, the outlook for the Australian economy and of course any growing fear of uncertainty and risk off move in markets.

The market, as you will see in my CFTC report later this morning is as short as it has been at least since 2000 and probably ever given the increased volume over that time and it closed the week under acute pressure dropping to 0.9566 at the New York close from a high only a few hours previous at 0.9664.

This morning in early Asian trade Reuters reports it has slipped a little further to 0.9553 bid.

It remains under pressure but as I noted in my free weekly newsletter on Saturday there are many, including Vincent Cignarella at the Wall Street Journal who thing that the Aussie might just have one more rally in it before it falls into the 80′s. Cignarella writes,

Quote:
I like the Aussie dollar to bounce in the near term up to as high as perhaps $0.9875, a level that would complete the fourth wave of the current Elliott Wave cycle, longer term the U.S. dollar will prevail. So don’t get married to the trade.

By year end the Australian dollar should settle around $0.8500 but not before exploding one last time toward even with the dollar.
Now I have some sympathy with the idea that the Aussie might have another bounce higher but this is a bear market so I would rather sell the rally than get long in the hope of same. The reason I say this is that Cignarella’s comment echoes something I have seen so many times in so many markets over the past 25 years and that is people want the market to reverse from the current trend so they can get back on the trade – in this case a rally to sell into. Experience has taught me though that if a lot of people are looking for that it just might never happen.



As you can see in the weekly chart above there is support for the Aussie here and the dailies are still suggesting a bounce but my JimmyR trend indicator is in a bear market on both time frames. 0.9741 should be very large resistance at present.

Stocks under pressure

The relationship between the Nikkei and the USDJPY is obvious, the relationship betwween the S&P 500 less so. But many were focussed on this on Friday as US stocks were let down by no growth in industrial production, capacity utilisation that came in at 77.6% and a fall in the University of Michigan Consumer confidence index from 84.5 to 82.7.

So with weaker data but fears of taper the early morning strength of US stocks evaporated into the afternoon and the Dow closed down 106 points or 0.70% at 15070, the Nasdaq was off 0.62% and the S&P 500 was 0.57% lower at 1627.

In Europe the FTSE closed up 0.05%, the DAX rose 0.40%, the CAC was 0.18% higher while in Milan stocks were 0.23% higher and stocks in Madrid were flat.

Note though that the good news from the weaker data in the US is the rally in US 10 years which are back at 2.14% from above 2.20% earlier in the week.

Commodities

Crude is apparently up on the back of the tensions in Syria which do appear to be taking on a more global and regional significance as the big powers square off and take sides. Russia in particular is very bellicose about army rebels with President Putin posing the question at G8 over the weekend of whether you want to arm people who not only kill their enemies but open them up and eat their body parts – gruesome but the video exists and with news that the Iran revolutionary guard are now in Syria fighting for Assad as well things are getting interesting in Syria and crude prces are watching.

At the close Crude was up 1.20% or $1.16 to $97.89 after earlier trading at the highest level since January this year. Gold was up 0.70% to $1389 and silver rose 1.72%, Dr Copper was 0.61% higher.

Data

Westpac Consumer survey in New Zealand, Tertiary index in Japan and a G8 meeting where I’m guessing Syria will be more the topic than markets.

In Australia we have new motor vehicle sales while in Europe and specifically Italy we have Trade Balance before the Empire State Manufacturing in the US along with the NAHB.

Thoughts, comments, queries together with frank and fearless feedback all welcome. I’m happy to answer questions or comments on the comment stream wherever I can.

NB: Please note all references to rates above are approximate and should not be used for trade reference ]]> The Analyst Arena Vantage FX Analyst http://forums.babypips.com/analyst-arena/54911-vantage-fx-markets-enter-vacuum-awaiting-fomc-17-jun-2013-a.html USDCHF: Bearish, Looks To Weaken Further. http://forums.babypips.com/analyst-arena/54879-usdchf-bearish-looks-weaken-further.html Sat, 15 Jun 2013 13:44:53 GMT USDCHF – With a fourth week of bearishness seeing the pair closing lower at the end of last week since tumbling off the 0.9838 level, there is risk... USDCHF – With a fourth week of bearishness seeing the pair closing lower at the end of last week since tumbling off the 0.9838 level, there is risk of further downside. Further down, support lies at the 0.9130 level . As long as it holds below its support turned resistance at the 0.9225 level, USDCHF looks to weaken further. This will leave the pair targeting the 0.9064 level where a violation will aim at the 0.0921/00 levels. Its weekly RSI is bearish and pointing lower supporting this view. On the upside, resistance resides at the 0.9225 level, its April 17’2013 low and then the 0.9392 level. A breach will target the 0.9450 level and then the 0.9566 level followed by the 0.9838 level, its psycho level. On the whole, the pair continues to face downside pressure.

]]> The Analyst Arena FXTechstrategy http://forums.babypips.com/analyst-arena/54879-usdchf-bearish-looks-weaken-further.html Scalping the Momentum on EURUSD http://forums.babypips.com/analyst-arena/54843-scalping-momentum-eurusd.html Fri, 14 Jun 2013 04:06:16 GMT BK Forex...]]>

-- Boris Schlossberg, BK Forex Scalping ]]> The Analyst Arena BKForex http://forums.babypips.com/analyst-arena/54843-scalping-momentum-eurusd.html Vantage FX |Aussie dollar roars as buyers re-emerge | 14 June 2013 http://forums.babypips.com/analyst-arena/54836-vantage-fx-aussie-dollar-roars-buyers-re-emerge-14-june-2013-a.html Thu, 13 Jun 2013 22:53:41 GMT *Recap* You would have been forgiven after seeing the massive 6% drop in the Nikkei yesterday to expect to walk in today after a night of equity... Recap

You would have been forgiven after seeing the massive 6% drop in the Nikkei yesterday to expect to walk in today after a night of equity market carnage and it might have gone that way but for an unexpected dip in jobless claims and much better than expected retail sales in the US.

On FX markets the data helped the US dollar claw back some ground against the Yen but it was the Aussie dollar that was the key mover rallying more than 2 cents off the low of yesterday.

Commodity markets were mixed and US 10 year bonds rallied 5 basis points which makes no sense given the data.

Aussie dollar roars

I made the easiest 50+ points I’ve probably ever made in the Aussie Dollars rally up to 0.9520ish after the slightly better than forecast employment report yesterday as I sold and then it dropped back into the 0.9430 region. But once again as Europe entered the fray the buyers re-emerged and it currently sits at 0.9617 as I write early doors Friday.

What was different last night and what suggests that the Aussie might have a significant further upmove after a consolidation in Asia today is that the sellers didn’t knock it back when the Euro came under pressure last night nor have the knocked it back yet. It speaks of a market that might be, we know the specs are, a little or a lot short on a daily time frame and suggests a market that now needs reasons to sell as opposed to reasons to buy which has been the modis operandi for the past 3 weeks.

One thing I will say and that I find very interesting about the price action, or at least the persistent buying since the low earlier this week is that I may need to reconsider whether if markets go pear shaped, especially if emerging markets are or have joined the rout, whether the Aussies recent safe haven status doesn’t by default come back.

It’s worth thinking about even if it would be very counter-intuitive in a market rout usually.



Anyway to the charts and just like gold before its big crash the Aussie may be mapping out a long term decline for the moment and may have found support at the bottom of what is becoming the channel as you can see in the weekly chart above. If we assume this is the case and if we look at the Dailies (chart here) then there is now a fair chance of a further rally using my usual process with a target of 0.9752 with an outside chance of 0.9885. On the day moves back to 0.9557 are likely to be supported.

Yen roars and Euro recovers from early weakness

With the Nikkei down more than 6% it makes no legitimate reason for the Yen to be stronger and at some point this relationship will break down as the market figures out that the Nikkei and Japan are mere shadows of their former self. But for the moment the Yen’s strength is probably the key reason that the Nikkei is under pressure along with questions about the efficacy of Abenomics. It’s a messy time and a very uncertain one in the lead up to the FOMC and BoJ Governor Kuroda’s comments yesterday that “Markets will gradually calm down” was hardly encouraging for Japanese investors.

So to see USDJPY down at 94.84 and to see it there after making a low overnight of 93.78 after a high of 96.08 yesterday is interesting an another example that Mandelbrot was right and volatility clusters.



As you can see in the chart above the USDJPY sell off has now satisfied, or within 20 pts anyway, what I consider to be a “Usual” or normal retracement of 38.2% which is of course a key Fibonacci level. We could be in for a big rebound but it is too early to tell and a move through last nights low of 93.78 and the “actual” level at 93.60 would be a sign of a deeper move. I don’t expect this level to break at present.

The Euro had an interesting night trading from a high yesterday afternoon around 1.3390 to a low of 1.3278 and it finds itself back at 1.3373 this morning essentially unchanged on the day and looking very strong. The pound was stronger trading ONLY (note irony) 90 point range for a gain and it sits at 1.5691.

Nikkei’s weakness fades as Stocks like the US data

Gee whiz it looked like it might be an ugly night in late Asian trade as the Nikkei was down 6.35%, Hang Seng off 2.19%, Shanghai of 2.84% and Europe walking in weaker down more than 2% in many markets. But the better than expected jobless claims which dropped 11,000 from expectations printing 334,000 and the big rise of 0.6% in Retail sales for May against expectations of 0.4% saw stocks rally all day dragging Europe out of the Doldrums.

So at the close the FTSE was up 0.09%, the DAX down 0.59%, the CAC up 0.11%, the FTSE in Milan up 0.57% but stocks in Madrid fell 0.64%.

In the US the Dow closed up 181 points or 1.21% at 15176, the Nasdaq up 1.31% and the S&P 500 rose 23 points or more than 1.4% to 1636.



The chart above of the S&P 500 daily shows that it penetrated but rallied back above important support as shown by the trendline (if you would like to see how it looked yesterday afternoon in Asia the link is here). What you can also see is the low of 1597 (VantageFX MT 4 pricing) was also the low last week so a break of the line and 1595 would be a big move if it comes now.

Commodities

Nymex crude up again rising 0.89% to $96.73 bbl but Gold, silver, and Dr copper were all lower falling 0.35%, 0.98% and 1.24% respectively.

Data

In New Zealand PMI and Food Price Index are released before inflation and employment data for the Eurozone as a whole. PPI is due out in the States and then industrial production and capacity utilisation.

So an interesting slide into home plate for the week over the next 24 hours without any real macro catalyst which implies last nights moves might continues.

Thoughts, comments, queries together with frank and fearless feedback all welcome. I’m happy to answer questions or comments on the comment stream wherever I can.

NB: Please note all references to rates above are approximate and should not be used for trade reference ]]> The Analyst Arena Vantage FX Analyst http://forums.babypips.com/analyst-arena/54836-vantage-fx-aussie-dollar-roars-buyers-re-emerge-14-june-2013-a.html USDJPY: Bearish, Extends Lower On Corrective Weakness. http://forums.babypips.com/analyst-arena/54825-usdjpy-bearish-extends-lower-corrective-weakness.html Thu, 13 Jun 2013 11:38:05 GMT USDJPY: With continued downside seeing USDJPY weakening further in early trading today, there is risk of further decline in the days ahead. We are... USDJPY: With continued downside seeing USDJPY weakening further in early trading today, there is risk of further decline in the days ahead. We are watching its supports located at the 93.50 level and the 92.57 level. A cut through the latter could force further downside towards the 92.00 level. Its daily RSI is bearish and pointing lower supporting this view. On the other hand, the pair requires a return above the 97.01/27 levels to halt its downside vulnerability. This if seen will call for a move towards the 98.00 level followed by the 99.27 level. Further out, resistance resides at the 100.00 level. On the whole, USDJPY remains vulnerable to the downside on correction. ]]> The Analyst Arena FXTechstrategy http://forums.babypips.com/analyst-arena/54825-usdjpy-bearish-extends-lower-corrective-weakness.html <![CDATA[Has EURUSD Broken Out Of Its Trading Range? [VIDEO]]]> http://forums.babypips.com/analyst-arena/54811-has-eurusd-broken-out-its-trading-range-video.html Wed, 12 Jun 2013 23:30:40 GMT BK Forex...]]>

-- Boris Schlossberg, BK Forex Trading Signals ]]> The Analyst Arena BKForex http://forums.babypips.com/analyst-arena/54811-has-eurusd-broken-out-its-trading-range-video.html Vantage FX | Stocks and US dollar down again as risk aversion rises | 13 June 2013 http://forums.babypips.com/analyst-arena/54810-vantage-fx-stocks-us-dollar-down-again-risk-aversion-rises-13-june-2013-a.html Wed, 12 Jun 2013 22:31:41 GMT *Recap* More concern over the past 24 hours about the path of Fed policy when the FOMC meets next week which caused more selling in stocks, bonds... Recap

More concern over the past 24 hours about the path of Fed policy when the FOMC meets next week which caused more selling in stocks, bonds and FX markets and a generalised increase in volatility coming from fear of the unknown or should I say fear of the unknown market outcomes if the Fed tap is turned off.

Asian markets remain under pressure in a clear sign that capital is returning to the safety of home currencies which is helping the Yen, Euro and Pound but strangely putting the US dollar under a little pressure. Bonds remain under selling pressure too with the US 10 year at another 1 year high overnight.

It is another week before the FOMC meeting and it could be fraught with danger and uncertainty.

Stocks sell off again

Journo’s, pundits and blokes like myself are great for gather useless, but somewhat interesting markets stats sometimes and I picked up a cracker in a Reuters story this morning,

Quote:
The Dow on Wednesday swung more than 200 points for the seventh time in the past 15 trading days, going back to Ben Bernanke’s latest Congressional testimony on May 22.
Yep, its all about the Fed and its all about the drugs that the stock market is on and knows is the only thing keeping the market up. As you can see in this chart below which I used in my Free Weekly Newsletter first a month ago and then again on the weekend saying,



Quote:
What is clear is the relationship between the Fed buying bonds and the cash finding its way into stock prices.

As momentum built in April and May and as Abenomics was flooding the global economy with more cheap money the Fed has clearly made the decision that enough is enough and the cure of the GFC economic weakness disease should not include a new stock market bubble.
We’ll know more next week but in the mean time we have a bit of a vacuum where fear is trumping hope and stocks are under pressure.

Last night stocks were down from the get go in the US and just kept heading south. At the close the Dow was down 127 points and back below 15,000 at 14995. The Nasdaq was 1.08% lower and the S&P is once again closing in on critical support falling 13 points or 0.81% to 1613.



The trendline comes in tonight at 1607 in terms of the pricing on my VantageFX MT4 platform which is the level to watch. Notwithstanding the fact I respect trendlines until they break my process suggests a break of the line.

In Europe it was the weakness in the US that dragged stocks lower with the FTSE down 0.65%, the DAX off 0.97%, the CAC off 0.43% and stocks in Milan off 1.61%. Somehow stocks in Spain rose 0.43%.

FX markets still don’t like the US dollar

The US dollar was stronger until last week on talk of the Fed taper but now it seems that the resonance that this delivered for the Buck has faded since then as markets have become more unstable and stocks in the US have come under pressure. The Yen’s resurgence makes sense from where I sit both fundamentally nd technically but the Euro’s rally is harder to fathom but it just keeps on keeping on trading up to a high of 1.3359 overnight and it sits at 1.3338 as I write. GBP was also a little higher at 1.5678 and USDJPY continues to sell off within a wild range trading 95.13-97.02 in the past 24 hours and rests at 95.93 this morning.



The Aussie Dollar had a wild ride as well trading down to 0.9413 yesterday around lunch time before rallying strongly as Europe entered the fray yesterday afternoon/evening before making a high of 0.9563 before the sellers entered driving it back to 0.9470 this morning. The Aussie is trying to base but remains under pressure.

Commodities

Interesting night and I confess to not really being able to put the moves in context except to say that they were a result of a weaker US dollar. Indeed there was a huge and unexpected build in crude stocks in the US overnight but Nymex crude still managed to finish up 0.40% to $95.76 a Bbl. Gold was up 1.07% at $1388 Oz, Silver was up 0.70% and Dr Copper was 1% higher.

Interesting night.

Data

The US finally joins the fray tonight with jobless claims, retail sales, business inventories and export and import prices. But before that we see the release of the extremely volatile employment data in Australia with the punditry expecting a rise of 10,000 but the NAB business survey amongst others suggesting that the number might be undershot.

Thoughts, comments, queries together with frank and fearless feedback all welcome. I’m happy to answer questions or comments on the comment stream wherever I can.

NB: Please note all references to rates above are approximate and should not be used for trade reference ]]> The Analyst Arena Vantage FX Analyst http://forums.babypips.com/analyst-arena/54810-vantage-fx-stocks-us-dollar-down-again-risk-aversion-rises-13-june-2013-a.html Profitable Daily Trading Signal by CMAnalyst http://forums.babypips.com/analyst-arena/54799-profitable-daily-trading-signal-cmanalyst.html Wed, 12 Jun 2013 09:44:32 GMT A potential AB=CD pattern is forming on GBP/USD on the daily chart. The pattern is expected to complete around the price range between 1.5785 and... A potential AB=CD pattern is forming on GBP/USD on the daily chart. The pattern is expected to complete around the price range between 1.5785 and 1.5767. The 127.2% retracement of the the BC leg is at 1.5767 and AB=BC projection is at 1.5785.

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]]> The Analyst Arena CMAnalyst http://forums.babypips.com/analyst-arena/54799-profitable-daily-trading-signal-cmanalyst.html GBPUSD: Remains On The Offensive. http://forums.babypips.com/analyst-arena/54798-gbpusd-remains-offensive.html Wed, 12 Jun 2013 09:21:49 GMT GBPUSD: Our call for more upside offensive is underway as we look for GBP to take out the 1.5683 level and trigger further gains. This will pave the... GBPUSD: Our call for more upside offensive is underway as we look for GBP to take out the 1.5683 level and trigger further gains. This will pave the way for a run at the 1.5750 level followed by the 1.5800 level. Its daily RSI is bullish and pointing higher supporting this view. On the downside, the risk is for GBP to reverse its corrective recovery and return to the 1.5320 level, a tough call at its current price levels. Further down, support resides at the 1.5200 level and then the 1.5100 level. On the whole, GBP continues to retain its upside offensive.

]]> The Analyst Arena FXTechstrategy http://forums.babypips.com/analyst-arena/54798-gbpusd-remains-offensive.html USDJPY: Heading Back to 100? http://forums.babypips.com/analyst-arena/54788-usdjpy-heading-back-100-a.html Wed, 12 Jun 2013 02:51:16 GMT BK Forex Trading Room]]>

-- Boris Schlossberg, BK Forex Trading Room ]]> The Analyst Arena BKForex http://forums.babypips.com/analyst-arena/54788-usdjpy-heading-back-100-a.html