FXSignalZone?
June 11, 2007 11:00 AM New York
Outlook:
June 11, 11:00 AM New York: Volatility has subsided at the start of the week after last week?s fireworks as we look to get back on track with this service. Like a slow boat, the dollar still appears to be turning sessions after the bond market steered interest rates higher. We?ve identified CHF to be the weakest currency relative to its peers and will look to position on the long side here to take advantage of the positive carry. Meanwhile, we are also looking for UK inflation to knock the pound lower on reduced expectations of further BOE tightening and will look to position short against the surging yen. Last night?s improvement in GDP from Japan appears to be a sign of better news to come.
Current Trades:
Short GBPJPY @ 238.70; S/L @ 239.50 (shift to cost @ 238.50)
Long USDCHF @ 1.2410; S/L @ 1.2350 (shift to cost @ 1.2430)
Confidence Rankings:
1 USDCAD: Near Term: Bearish Medium Term: Bullish
2 USDCHF: Near Term: Bullish Medium Term: Bullish
3 USDJPY: Near Term: Bearish Medium Term: Bearish
4 GBPUSD: Near Term: Bearish Medium Term: Bearish
5 EURUSD: Near Term: Bearish Medium Term: Bearish
6 AUDUSD: Near Term: Neutral Medium Term: Neutral
USDCHF has broken a key technical resistance at 1.2330 and looks to confirm a reversal with a strong push above the 1.24 level. Given the limited impact of carry trade unwinding here, the relative CHF weakness and the positive carry, we have turned bullish and positioned this pair in the top 2 of our Confidence Rankings.
Short Term: Bullish
Medium Term: A breach of 1.2250 is needed to confirm a dollar bullish inflection after technical breakdown of the multi-week trendline resistance.
Trading Blotter:
Long USDCHF @ 1.2410; S/L @ 1.2350 (shift to cost @ 1.2430)