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Main » Articles » Currency trading

Timid start of the week
by Ralph Shell


EUR/USD Commentary and Trade Ideas

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Friday's worries receded as the CITI Group found a bridge load to avoid bankruptcy, sending timid investors back to the buy side of equities. The MCI World Index was up a respectable 0.9% overnight. The EUR took out last week's high, triggering stops, and is currently trading at 1.4232. The June 3rd high of 1.4338 is the next challenge for the bulls. The German PPI was anounced this morning and came in at -0.1 percent versus a forecast of +0.5%. and down 4.6% on the year. This shows a lack of pricing power by German products. The strengthened Euro will make the resumption of German exports more difficult, but for the moment this is of no concern for the Euro buyers. Since the trend is obviously higher, scalpers can try the long side of dips, however a trade under 1.4150 might change the trend.

Bias: Higher Bias Term: Medium Support: 1.4150 1.4060 1.3980 Resistance: 1.4260 1.4350 1.4490

 GBP/USD Commentary and Trade Ideas 

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After a modest retreat from the high last week, the pound started higher today trading up to 1.6550, but has since sold off to 1.6490. There is not a lot of news to propel the pound higher. It was reported the asking price of UK homes increased by 0.6% last month. Another report said the UK money supply contracted 0.2% last month, but neither are market movers. Perhaps a clue to the strength of the pound can be found in a line from and old Roger Miller song, "England swings like a pendulum do." Living conditions and opportunities in London are much more appealing than most Mid East cities, so the money flows into the UK. So far the pound has shrugged off last week's IMF report that expressed concern about the UK's debt burden. Maybe VP Joe Biden's advise, who says we have to keep spending to avoid bankruptcy, has crossed the Atlantic. The market acts like the Monday morning strength should be sold with a tight stop but I am not quite sure where to get involved.

Bias: Lower Bias Term: Medium Support: 1.6410 1.6280 1.6190 Resistance: 1.6520 1.6590 1.6640

USD/JPY Commentary and Trade Ideas 

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The futures COT report from the latest period reveals speculators continued to be massive buyers of the yen again last week. The recent run up in the dollar versus the yen during the past 7 days has hurt the spec positions. Could the long yen position be a hedge against a long equity position. Any sharp contraction in equity valuations would sent the yen higher as traders would move away from risk. The pair has moved back up after trading briefly under the 92 handle. There will come a point where this rally stalls, so let's try to sell this pair if it trades at 95.30 with a 100 point stop. The target for the trade would be a sell off down into the 93 area.

Bias: Higher Bias Term: Medium Support: 94.20 93.20 92.50 Resistance: 94.80 95.70 96.40

 USD/CHF Commentary and Trade Ideas

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This pair took out the old resistance at 1.07 and after trading as low as 1.0650 is nor at 1.0690. It is always questionable where strength in the franc will attract the attention of the SNB. The low on June 24, the day the SNB aggressively sold the franc and bought EUROS and Dollars was 1.0647. Will history repeat? Try the long side of the USD franc in the 1,0650 area with appropriate money management stop and see if we get a bounce.

Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0730 1.0820 1.0890

USD/CAD Commentary and Trade Ideas

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A report this morning shwed that 18.89 Billion CAD's was invest in Canadian Equities in the latest reporting month.  This oil and mineral rich country continues to receive global funds which certainly helps the CAD.  Higher oil, gold and equities also helped the CAD this morning.  After trading at 1.1019 bounced to a high of 1.1094 and is now trading at 1.1053.  The CAD was the quite firm this past week, but the rate of appreciation has slowed, making us think that a retrace back to the vicinity of 1.13 might happen.  This is a counter trend trade so keep stops close.

Bias:  Higher  Bias Term:  Medium  Support: 1.1020  1.0940  1.0820 Resistance: 1.1120  1.1220  1.13

AUD/USD Commentary and Trade Ideas 


Better attitude toward equities this morning carried the AUD higher this morning higher and we are currently trading at .8140. This pair has traded here numerous previous times and generally stalls above .81. Last month the Central banker was also a seller of AUD's on a rally, so we really question this market's ability to move substantially higher from here. We will watch developments for a trading opportunity.

Bias: Neutral Bias Term: Medium Support: .7969 .7850 .7670 Resistance: .8140 .8220 .8300

NZD/USD Commentary and Trade Ideas 

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Global equity strength has assisted the value of the Kiwi this morning and we are currently trading at .6540. We are back in an area where the market has stalled before, and are not inclined to be buyers at this level.

Bias: Higher Bias Term: Medium Support: .6510 .6420 .6300 Resistance: .6560 .6700 .6770
Category: Currency trading | Added by: forex-market (2009-07-19)
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