Yen

The Nixon Shock

The Nixon Shock

Have you looked at the market lately? The Dow is pushing 11,000. The S&P 500 has broken out above 1,150 and seems to be going to 1,220. Gold is at $1,346 per ounce, another all-time high. Silver is at prices not seen since the Hunt brothers tried to corner the market back in the 1970s. Oil is threatening to break out of its range… Aluminum, copper, tin, Molybdenum , nickel — all up! The price of cobalt has jumped from $24 to $40 per pound in the last three months. When pigs fly, pork bellies The prices of wheat, coffee, and pork bellies are going parabolic… “What’s going on?” you might ask. Could it be that investors are suddenly jazzed about tin, or think that hot dog sales will boom this Thanksgiving? No, of course not. The answer lies with our own happy Federal Reserve. Brian Sack, a senior official at the New York Fed, said this about quantitative easing in a recent speech: “Balance sheet policy can still lower longer-term borrowing costs for many households and businesses, and it adds to household wealth bykeeping asset prices higher than they otherwise would be.” Ponzi scheme In other words, the Fed is trying to prop up housing prices and the stock market (i.e. 401ks and other retirement plans) by keeping rates low, printing money, and destroying the value of the dollar. The fact that they admit this isn’t surprising… (It should be. I wish I was shocked, but I’m not.) The U.S. economy has been run like a giant Ponzi scheme since the Asian Currency Contagion of 1998. This was followed by a series of “crisis that will destroy the world economy”: Russian debt default, 9/11, Long Term Capital Management, dot-com bubble, housing collapse… Each one of these crises required the heroes at the Fed to step in and “save us” by printing money and creating the next bubble. This always reminds me of those Salvador Dali posters all the cool kids had in college: At some point, you have to pay the piper. Bills come due, and you can no longer prop up the empty corpse of the economy by adding another buttress. The flaming giraffe of debt will have his say. We wish, dear reader, that someone had the nerve to stand up in 1998 and let those who bet on LTCM take their lumps as a warning to the rest of the capitalist risk-takers. Make no mistake; the bailout of LTCM twelve years ago is directly responsible for the debt markets turning into a free-for-all five years ago. Heck, many of the same people were involved. And why not take risks? If the Fed can bail out Long Term Capital Management, they can bail out AIG. And Wall Street was correct in its assumption. Nothing has changed… No lesson has been learned. The currency war Right …

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Daily Forecast: October 01

Filed in euro, Gold, silver, Yen by on October 1, 2010 0 Comments
Daily Forecast: October 01

EURUSD Forecast The EURUSD was volatile but indecisive yesterday, formed A Doji on daily chart. The bias is neutral in nearest term but overall price still maintain its strong bullish outlook. We have a resistance around 1.3700 area. Break above that area could continue the bullish pressure testing 1.3800 – 1.3888. Immediate support at 1.3600 followed by 1.3550. Lower, 1.3500 could be a key support area at this phase. Correction is natural and always happen in the market but technically I do not expect any correction below 1.3500 for now unless we have a big negative fundamental surprise in the Euro zone or US which could create risk aversion sentiment and push the Euro lower. GBPUSD Forecast The GBPUSD made another volatile movement yesterday but this time with more bearish bias than what happened on Tuesday and Wednesday. Price slipped below the minor bullish channel and now struggling around the lower line of the channel as you can see on my h4 chart below. On another technical perspective, this high volatile movement created a broadening formation, where price make new highs and lows but show unclear direction. I will stay away from this pair for now. For me, EUR/USD is a better pair to be traded in this condition. A consistent move below the minor bullish channel and break below the lower line of the broadening formation and 1.5650 support area could trigger further bearish momentum, change nearest term bias to bearish but as long as price move inside the major bullish channel (white) the major bullish

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FX Traders Watching EU Yields

Filed in currencies, Debt, euro, Gold, Quantitative Easing, swiss franc, Yen by on September 30, 2010 0 Comments
FX Traders Watching EU Yields

The EURUSD has stayed surprisingly resilient despite the negative news surrounding the Euro in the last 24 hours. Moody’s downgraded Spain to Aa1 with the outlook at stable which did not provide much of a reaction. EU Commission President Barroso & German Chancellor Merkel’s strongly worded comments yesterday are still ringing in our ears which suggested that there are still significant risks in the Eurozone. Today’s heightened CDS pricing and widened yield spreads confirm this (although we are seeing some relief today due to a canceled Irish auctions catching dealers short). “We will pull the handbrake before the car rolls down the hill” Barroso proclaimed. He then proceeded to outline sanctions for countries which failed to follow the EU’s rules on deficit and public debt. Under the new program and under the blanket of the Stability & Growth Pact, member nations whose deficit climb above 3.0% and public debt larger than 60% of GDP could be made to cough up an additional 0.2% of GDP in interest bearing deposits. He went on the say that this new plan was “the biggest step forward on economic governance since the Stability and Growth Pact was introduced.” The step toward greater economic coordination among member states clearly unnerved Germany. Merkel was quick to respond that the EU’s proposal should be an “automatic” alarm that a “depoliticized” process was needed. In addition, she called for a change in the EU’s treaty which includes the suspension of voting rights for certain states and reiterated that Germany would not support any extension of Eurozone safely measures. Today German Finance Minister Wolfgang Schaeuble asserted that Germany “needs a broader sanctions mechanism to get the moral hazard problem in the Eurozone under control.” With prospects of decent growth in the peripherals and concerns about political backtracking on austerity measures, we don’t see a smooth exit from the current situation; in fact we see the Eurozone crisis is sliding deeper, albeit slowly. Ireland’s Central Bank announced today the much anticipated solution surrounding Anglo Irish Bank – the bank is now state owned. A total of € 29.3 billion (bn) in state raised capital would be needed and an additional €5 bn may potentially be needed should economic conditions deteriorate further. In a politely worded statement, the Irish Finance Minister foretold that the holders of subordinate debt would have to make large contributions to the bailout – translated into American English, this simply means they are about to take on some heavy losses. In Australia, economic data came in softer than expected. Building approvals fell -4.7% m/m vs. 0.0 expected while private lending growth rose to a weak 0.1% vs. 0.3% expected. Given the recent moderation in economic data and current macro landscape, we suspect that the RBA will hold off on reinstating their hiking cycle until at least November. Despite the short lived sell off in AUDUSD, we suspect that safe haven investors will continue to value Australia’s strong fundamental & conservative fiscal position – this in turn will keep the currency supported. For the Greenback, concerns over the potential size…

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Daily Forecast: September 30

Filed in Gold, Gold Bullion prices, lead, silver, Yen by on September 29, 2010 0 Comments
Daily Forecast: September 30

EURUSD Forecast The EURUSD had a moderate bullish momentum yesterday, topped at 1.3645 and closed at 1.3624. Overall we are still in strong bullish phase targeting 1.3700 – 1.3800 area this week especially if price make another breakout above 1.3645. As you can see on h4 chart below, CCI about to cross the 100 level indicates potential minor bearish correction testing 1.3550 – 1.3500 support area. In the last two weeks price bullish movement is characterized by breakout – consolidation – breakout patterns. So right now, with CCI start to show potential downside pullback re-testing zero level, we may be in another consolidation phase but short position is not recommended. Only a movement below 1.3500 and violation to the bullish channel could diminish the bullish outlook and trigger further bearish correction. GBPUSD Forecast The GBPUSD made another volatile but indecisive movement yesterday. The bias remains neutral in nearest term. We are still in strong bullish phase and I still prefer a bullish scenario but need a clear break above 1.5900 to continue the bullish scenario testing 1.6000. On the downside, key support level remains around 1.5728 and the lower line of the minor bullish channel (red). Break below that area could diminish the bullish outlook testing the lower line of the major bullish channel (white). USDJPY Forecast The USDJPY didn’t make significant movement yesterday but still able to stay below 84.00 and made a lower low on daily chart indicates the rounding top bearish scenario remains intact targeting 82.87. Another pullback above 84.00 could lead us to neutral zone as direction would become unclear but only a break above 84.82 could cancel the rounding top bearish scenario. Fundamental focus still about the potential intervention by the Japanese government to stop further Yen appreciation. USDCHF Forecast The USDCHF was indecisive yesterday, formed a Doji on daily chart. The bias is neutral in nearest term but still in the context of major strong bearish scenario targeting 0.9647 especially if break below 0.9730. I have made adjustment to the bearish channel. Immediate resistance at 0.9814 (yesterday’s high) and the upper line of the bearish channel. Break above that area could trigger further upside correction but as long as price stay below 0.9931 I think we are still in strong bearish phase. Have a great day!

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Daily Forecast: September 28

Filed in Gold, Gold Bullion prices, Yen by on September 27, 2010 0 Comments
Daily Forecast: September 28

EURUSD Forecast The EURUSD bullish momentum was paused yesterday after failed to make a clear break above 1.3500 resistance area. The bias is neutral in nearest term as price is consolidating. The strong bullish outlook remains intact but need a clear break above 1.3500 to continue the bullish momentum testing 1.3700. On the downside, immediate support at 1.3400 and the lower line of the bullish channel. Break below that area could diminish the bullish outlook. As you can see on my h4 chart below, CCI maintain above zero level during the strong bullish momentum. A violation to the bullish channel followed by CCI movement below zero level could trigger significant bearish pressure testing 1.3310 support area. On the other hand, another rejection to move below zero level followed by a clear break above 1.3500 could continue the bullish scenario. My fundamental focus today will be on German Prelim CPI and US CB Consumer Confidence. Risk aversion/appetite sentiment likely to drive the movement during the release so good numbers could continue the upside pressure while bad numbers could trigger downside pullback. GBPUSD Forecast The GBPUSD slipped above 1.5841 yesterday but further bullish momentum was rejected and closed lower at 1.5808. The bias is neutral in nearest term but overall we are still in strong bullish phase indicated by two bullish channels as you can see on my h4 chart below. CCI in neutral area indicates limited bullish pressure so far as price is consolidating. Immediate support remains around 1.5728 followed the lower line of the minor bullish channel (red) and 1.5650. Break below that area could be a serious threat to the current bullish outlook testing the lower line of the major bullish channel (white). On the upside, initial resistance which is also potential technical bullish target is seen around 1.5900 followed by 1.6000. Fundamental focus today will be on UK Current Account and US CB

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Forex: Speculators are long Euro positions for first time since December

Filed in British Pound, euro, Gold, Gold Bullion prices, swiss franc, US Dollar, Yen by on September 27, 2010 0 Comments
Forex: Speculators are long Euro positions for first time since December

By CountingPips.com The latest Commitments of Traders (COT) report, released on Friday by the Chicago Mercantile Exchange, showed that futures speculators increased their bets for the euro against the dollar for a third consecutive week. Non-commercial futures positions, those taken by hedge funds and large speculators, were net long the euro against the U.S. dollar by 5,097 contracts as of September 21st following net positioning of -9,644 contracts on September 14th. This is the first time contracts have been in positive territory for the euro since early December 2009 when net euro contracts were positive by 22,151. The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. Open interest is the number of open contracts that have not been closed by a transaction or by delivery. The British pound sterling was the only major currency on the short side against the dollar last week in the CME futures market while the euro, Australian dollar, New Zealand dollar, Japanese yen , Canadian dollar, Swiss franc and Mexican peso had a net positive amount of contracts. The British pound sterling short positions edged to -8,989 as of September 21st after being

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Daily Forecast: September 27

Filed in euro, Gold, Gold Bullion prices, lead, Yen by on September 26, 2010 0 Comments
Daily Forecast: September 27

EURUSD Forecast The EURUSD continued its bullish momentum on Friday, topped at 1.3494 and closed at 1.3488 after break out above my minor bearish channel indicating potential further bullish scenario especially if price able to make another strong break out ab0ve 1.3500 targeting 1.3700. Note that 1.3500 could be an important and strong resistance area at this phase since it is the 50% Fibonacci retracement of 1.5140 – 1.1876 , so I think we need a clear break above that area to continue the bullish momentum. Another bearish pullback after testing 1.3500 area on Friday is normal and another minor bearish channel could be formed, but overall we are still in strong bullish bias unless price break below the major bullish channel (white). Immediate support at 1.3438 – 1.3400. Break below that area could trigger further bearish pullback testing 1.3310 support area but I still prefer a bullish scenario at this phase. Although there are many who maintain their negative outlook on global recovery progress which should create risk aversion and push the Euro down, price action shows that market still have positive bias after FOMC meeting and some good fundamental data lately. Trade the facts, not the opinions. GBPUSD Forecast As I had expected, the GBPUSD made strong bullish movement after break above 1.5728, topped at 1.5841 and closed at 1.5821. This fact opens the door for further bullish continuation targeting 1.6000 region especially if price make another strong break out above 1.5841. Immediate support at 1.5728 (former resistance). Break below that area could lead us to neutral zone in nearest term but overall we are still in strong bullish phase and I still prefer a bullish scenario for now. USDJPY Forecast The USDJPY was technically a mess on Friday. Price slipped above 84.82, topped at 85.38 but quickly whipsawed to the downside and closed lower at 84.20. The way I see it, there are some forces in the market trying to go against the Japanese government acts to weaken the Yen and this is a very tricky situation. I will stand aside for now. Technically speaking, the bias is bearish in nearest term especially if price able to break below 84.00 re-testing 82.87 region. On the upside we need a consistent move above 84.82 to continue the bullish momentum testing 85.90 region and keep the upside outlook intact. USDCHF Forecast The USDCHF attempted to push lower on Friday, bottomed at 0.9778 but the bearish momentum was limited as price closed higher at 0.9828 and keep moving higher around 0.9858 at the time I wrote this comment. The bias is neutral in nearest term but still within the context of a major bearish scenario testing at least 0.9730 support area. Immediate resistance remains at 0.9931. Break above that area and violation to the upside of the bearish channel could lead us to neutral medium outlook. Have a great day!

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Daily Forecast: September 23

Filed in euro, Gold, Gold Bullion prices, lead, silver, Yen by on September 22, 2010 0 Comments
Daily Forecast: September 23

EURUSD Forecast The EURUSD continued its bullish momentum yesterday, topped at 1.3438 and closed at 1.3393 following a strong break out above the trend line resistance on Tuesday. The bias remains bullish in nearest term testing 1.3500 area before testing 1.3700. Immediate support at 1.3333 (former resistance). Break below that area could lead us to neutral zone in nearest term testing 1.3267 but overall we are still in strong bullish phase. Fundamental focus today will be on some Euro zone Flash Manufacturing and Services PMI data and US Unemployment Claims and Existing Home Sales. Risk aversion/appetite sentiment likely to keep driving the market so good numbers could trigger further bullish momentum while bad numbers could trigger some technical downside rebound. GBPUSD Forecast The Cable is the only major currency that fail to gain from broad Dollar weakness after FOMC meeting. On h1 chart below we can see price still able to move inside the minor bullish channel (red) indicates strong bullish view remains intact but we haven’t seen significant bullish momentum so far. The bias is neutral in nearest term and need a clear break above 1.5728 to continue the bullish scenario towards 1.5800 and 1.6000. Immediate support at the lower line of the minor bullish channel and 1.5625. Break below that area could trigger further bearish pullback testing 1.5586 but overall we are still in bullish phase. Fundamental focus today will be on UK BBA Mortgage Approvals and US Unemployment Claims and Existing Home Sales. Risk aversion/appetite sentiment likely to keep driving the market so good numbers could trigger further bullish momentum while bad numbers could trigger some technical downside rebound. USDJPY Forecast The USDJPY attempted to push lower yesterday after break below 84.82, but found support around the trend line resistance as you can see on my h4 chart below. A downside pullback testing the violated trend line often happen technically, but a movement back below the trend line could be a serious threat to the bullish scenario re-testing 82.87 as the rounding top bearish reversal scenario is now confirmed. However, like I said yesterday, any further Yen appreciation could trigger another intervention and this could be a psychological support. On the upside, another move back above 84.82 should keep

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Daily Forecast: September 22

Filed in euro, Gold, lead, silver, Yen by on September 21, 2010 0 Comments
Daily Forecast: September 22

EURUSD Forecast The EURUSD had a significant bullish momentum yesterday after market react positively on FMOC statement. Although most part of the statement didn’t show significant change from the previous releases, the Fed willingness to “provide additional accommodation if needed to support the economic recovery” triggered risk appetite and push Euro higher. This positive reaction on global recovery could remain stay in the market at least in nearest future and give further support to the Euro. On daily chart below we can see price made a strong breakout above the trend line resistance indicating potential bullish continuation testing 1.3500 region especially if price able to make another break above 1.3333 (August 06 high). Immediate support at 1.3250/00 area. As long as price stay above that area, technical bias remains strongly bullish. GBPUSD Forecast The GBPUSD also had a bullish momentum yesterday after FOMC statement triggered broad Dollar weakness. On h1 chart below we can see price is moving in a new minor bullish channel indicating potential bullish continuation, but still need a clear breakout above 1.5728 to continue the bullish scenario testing 1.5800 even testing 1.6000 psychological level. Immediate support at 1.5586 and the lower line of the minor bullish channel (red). Break below that area could lead us to neutral area in nearest term as direction would become unclear but as long as price still move inside the major bullish channel (white) we are still in bullish phase. USDJPY Forecast The USDJPY had a significant bearish correction yesterday on broad Dollar weakness and now struggling around 84.82 support area. On h4 chart below we have a rounding top formation, which is a bearish reversal pattern especially if price able to break below 84.82 testing 84.00 area even lower. However note that any further Yen appreciation could trigger another intervention by the Japanese government. On the upside, we still need a break above 85.90 to continue the bullish momentum testing 87.00. USDCHF Forecast The USDCHF continued its bearish momentum yesterday, bottomed at 0.9958. On h4 chart below we can see price is moving inside a new bearish channel (red) after violated the bullish channel indicating potential bearish pressure. The bias is bearish in nearest term especially if price able to break below 0.9931 region targeting 0.9870 before testing 0.9730. Immediate resistance at 1.0030 and the upper line of the bearish channel. Break above that area could lead us to neutral zone in nearest term as direction would become unclear but the major scenario remains bearish. Have a great day!

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Australian Dollar To Rise By 10% Against the Yen?

Filed in silver, Yen by on September 19, 2010 0 Comments

It’s another manic Monday Forex friends! In today’s FX feature I present to you the daily chart of AUDJPY. As you can see, the pair has recently broken out (upside) from a nice symmetrical triangle formation. This breakout could swing the pair towards its previous high near the 88.00 marker. Projecting the base of the Related posts: Australian Dollar’s Silent Rise Good day to you my fellow FX men and women!… Canadian Dollar Remains Weak Versus the Yen Despite BOC Rate Hike Good day FX peeps! To cap the week I present… Are the Pound Bulls About To Strike Back? – August 16, 2010 Welcome to another week of forex trading! In today’s FX… Related posts brought to you by Yet Another Related Posts Plugin .

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Chart of the Day – 9/17/2010 – GBP/JPY

Filed in Gold, ubs, Yen by on September 17, 2010 0 Comments

9/17/2010 – GBP/JPY – Price action on GBP/JPY (a daily chart of which is shown) as of Friday (9/17/2010) has retraced back up to the top resistance border of a key parallel downtrend channel extending back to the 2009 high, on the heels of this week’s yen intervention. This bullish retracement occurs after price was displaying bearishness off a breakdown below a rising wedge pattern within the downtrend. That bearishness dropped price down to key support around the 127.60 price region, forming a very rough double-bottom low, before Wednesday’s yen intervention pushed price back up to its current position right around the top border of the noted parallel downtrend channel. In the event that this trendline is broken significantly to the upside, price action could target the peak of the double-bottom in the 137.70 price region. In the event that resistance is respected, near-term downside support resides in the key 132.00 price region. James Chen, CMT Chief Technical Strategist FX Solutions IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. (Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.) Attached Images

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