Tag: downside

Watching Paint Dry

Watching Paint Dry

January Crude closes virtually unchanged on the day but as we’ve hinted in recent blogs we think there is more work to be done on the downside. The “whippiness” continues in Natural Gas with prices down 3.7% today. We’ve gone from bullish to bearish back to bullish and prefer the sidelines for clients in this indecisive environment. Though we’ve yet to get a clear signal, some of our more aggressive clients opted to get short the S&P today. We are not advising futures at this juncture, but our suggestion would be purchasing 75-100 point March ES put spreads. This may be premature, but if prices were to start rolling over, we think a quick 4-6% move lower could be captured. The 20 day MA continues to be the pivot point in the US dollar; in December that level is 79.70.We continue to suggest buying dips in the Euro, Pound and Swissie. Inside day in both Gold and Silver. For the first time in several months, we think the path of least resistance is lower in both precious metals. In February Gold our target remains $1330, and in March Silver $27. The USDA grain stocks report comes out tomorrow before the market open. Here are the average estimates in millions of bushels from one of our more informed floor traders: Corn 803, Wheat 849, and Soybeans 167. We advised most of our clients to lighten up in their profitable Corn positions. We remain bullish, but don’t like carrying trades into potentially market moving reports. The only real excitement in the softs sector was Lumber moving up limit, or 3.85% today. Nearly a 10% appreciation in the last three sessions. We feel there is more upside, but suggest waiting for a retracement if you are not already long. Risk Disclosure:

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Chart of the Day – 1/07/2011 – EUR/USD

Filed in Gold Bullion prices, o, target, ubs by on January 7, 2011 0 Comments

1/07/2011 – EUR/USD – Price action on EUR/USD (a daily chart of which is shown) as of Friday (1/07/2011) on the heels of the Non-Farm Payrolls report dropped to a low of 1.2934, establishing a new 3-month low, before rebounding back up to waver around the key 1.3000 psychological support/resistance area. This occurs at the tail-end of a very bearish first week of 2011. Having dropped to the current lows, price action is on the verge of breaking down below the consolidative trading range that has characterized this pair since the beginning of December. Although EUR/USD is finding some general support at the current lows, the overall directional bias continues to be to the downside. Further downside momentum on this week’s marked bearishness could soon potentially target key downside in the 1.2600 price region, which would confirm a continuation of the bearish trend initiated from the early November 1.4280 high. 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

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Chart of the Day – 10/19/2010 – EUR/USD

Filed in Gold, silver, ubs by on October 19, 2010 0 Comments

10/19/2010 – EUR/USD – Price action on EUR/USD (a 4-hour chart of which is shown) as of Tuesday (10/19/2010) has broken down below multiple static and dynamic support levels, and has gone on to breakdown below key support in the 1.3800 price region. This places the currency pair at a critical juncture, as price action below this level could signify that a bearish trend reversal is in the making. As there has been a strong breakdown below 1.3800, a rough head-and-shoulders pattern is now in play to lend further bearishness to a EUR/USD trend reversal scenario. If this is the case, an initial downside support target resides in the 1.3600 price region. Further to the downside resides key further support in the 1.3400 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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Chart of the Day – 10/18/2010 – USD/CHF

Filed in Gold, silver, ubs by on October 18, 2010 0 Comments

10/18/2010 – USD/CHF – Price action on USD/CHF (a 4-hour chart of which is shown) as of Monday (10/18/2010) has been making yet another bullish retracement beginning late last week, within the context of the strong bearish trend that has characterized this currency pair since early June. Price action hit a high around 0.9650 in early Monday trading before retreating back down to the 0.9550 support/resistance region. Despite this bullish retracement, the overall technical bias continues to be to the downside in line with the well-established bearish trend. Several triggers for potential short opportunities occur to the downside, most notably a breakdown below the bullish counter-trend retracement support line and a breakdown below the all-time low at 0.9463 established just last week. In the latter event, a longer-term downside support target resides in the 0.9100 price region, a key 261.8% Fibonacci extension. 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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Chart of the Day – 10/15/2010 – USD/CAD

Filed in Gold, Gold Bullion prices, ubs by on October 15, 2010 0 Comments

10/15/2010 – USD/CAD – Price action on USD/CAD (a daily chart of which is shown) as of Friday (10/15/2010) has shown some bullish correctiveness today after hitting parity (1.0000) on Thursday, but overall the pair still appears biased to the downside in line with the steep downtrend that the pair has been entrenched in since falling from key 1.0670 resistance in early September. Within this downtrend, a key downside support target resides in the 0.9930 price region, which represents a major low hit in April. If the downtrend continues with a breakdown below that support level, a key further downside support target resides in the 0.9700 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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EURO Climbs as Markets Wait for the ECB

EURO Climbs as Markets Wait for the ECB

The rout of the USD continued throughout the Asian session and the momentum isn’t letting up during the European. As stated yesterday, even though technical indicators are signaling that the USD is currently oversold, we are going to stick to our fundamental guns. Right now – fears of another round of global QE and endless liquidity are priming the risk-taking pumps and the market is clearly turning a blind eye to new sovereign risks coming out of the EU. There are significant fundamental risks still firmly entrenched in the Euro. Ireland’s credit rating was downgraded yesterday as Fitch lowered the Emerald Isle’s rating to A+, the worst assessment among the three major agencies. Further, the European Commission warned yesterday that ’06 – ‘09 Greek debt & deficit data would probably need to be revised higher in the near future. Even though Euro risk is steadily increasing – on the EURUSD pair, the USD remains the sell this week. USDJPY traded down to 82.25 with no harsh words from Japanese policymakers. Interestingly, selling pressure on USD vs. many Asian currencies saw another day of central bank intervention, albeit smoother than in previous days. The AUDUSD rallied higher past 0.9900 as a strong jobs report showed that full time employment gained 55.8k and total employment jumped 49.5k. Rate markets are now pricing in a full 25 bps hike as traders quickly adjust their calendars – expecting a nice gift from the RBA in December. Given the strong growth story in Australia, fuelled in part by commodity prices and domestic demand, the RBA may still have lots of work to do in 2011 which will give the AUD even more upside potential and increase yield differentials into the new year. On that note, commodities will continue to climb with base and precious metals leading the way. Gold is still the major story climbing to $1359.40 / oz at the time of writing, in the current environment, we’ll probably see $1400 before the end of the year. Copper and Zinc followed closely on Gold’s heels but with China still on holiday, Friday’s Asian open will likely introduce further upside due to pent-up physical demand. For the Bank of England, we suspect that it will be a non-event as a vote for no change …

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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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Exodus from USD Subsides

Filed in commodities, dividend, euro, Gold, lead, Quantitative Easing, Red Back, sov, sovere by on September 23, 2010 0 Comments
Exodus from USD Subsides

In FX, it’s all about the QE2. Tuesday’s FOMC meeting has clearly trigger a mass exodus from the USD. Yesterday’s Portuguese auctions were a situation of a cup half full, at best, with a healthy bid to cover ratio, yet at a high price and overall spreads between peripherals and bonds remain wide. In addition EU industrial new orders fell off a cliff, printing at -2.4% m/m vs. -1.4% exp. So far this EU sovereign risk / weakness has been completely overlooked as traders scramble over each other to exit the USD. Its also important that this is not just a normal rally in risk correlated trades as commodities (barring gold) have been relatively sideways and US stock markets closed lower yesterday. We suspect that the recent EURUSD move should be now considered overdone since we really have not gotten any new information from the FOMC (policy shifts or economic forecasts) that had not been anticipated. We have been slightly surprised by the markets violent reaction to the Feds language, suggesting preparedness to ease again. Of course they stand ready; Bernanke has never implied that he would take QE off the table, in fact significantly he has said the opposite. Let us not forget that there are still considerable problems in the EU, which have been …

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Daily Forecast : September 10

Filed in euro, Gold, Gold Bullion prices, lead by on September 9, 2010 0 Comments
Daily Forecast : September 10

EURUSD Forecast: The EURUSD slipped below my trend line support earlier today in Asian session as you can see on my h4 chart below. This fact could be seen as the end of technical bullish correction and trigger further bearish pressure testing 1.2588 and 1.2523 region. Immediate resistance at 1.2700. Break above that area and a movement back above the trend line support could lead us into neutral zone in nearest term as direction would become unclear even could produce a false breakdown scenario which could trigger upside pressure testing 1.2764 (yesterday’s high). Fundamental focus today is on French Industrial Production. A disappointing result could push the pair lower. On the other hand, a good result could give support to the Euro but overall I think Euro zone is still in negative territory and the major scenario remains to the downside. GBPUSD Forecast: The GBPUSD also had a significant technical move earlier today in Asian session, slipped below the bullish channel as you can see on my h4 chart below. This fact could trigger further bearish pressure testing 1.5340 and 1.5296 as the bullish correction could end here, especially if break below 1.5370. Another movement back inside the bullish channel could lead us into neutral zone as direction would become unclear, produce a false breakdown scenario and keep the bullish correction intact re-testing 1.5475 and 1.5531. Fundamental focus today is on the UK PPI Input. A disappointing result could push the pair lower. On the other hand, a good result could give support to the Sterling but overall the major scenario remains bearish. USDJPY Forecast: The USDJPY attempted to push lower yesterday, bottomed at 83.49 but closed higher at 83.77 and keep moving higher earlier today in Asian session, hit 84.28. Like I said yesterday, the rejection from 83.35 historical level could produce bearish exhaustion and price is making a new bullish channel after rebound from that support. The bias is bullish in nearest term testing 84.82 and the trend line resistance. Break above that area could be seen as a beginning of a new bullish phase at least in nearest term. On the downside, only a break below 83.35 could continue the bearish scenario. USDCHF Forecast The USDCHF bearish pressure was stopped and corrected

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Daily Forecast : September 07

Filed in Gold, lead, silver by on September 6, 2010 0 Comments
Daily Forecast : September 07

EURUSD Forecast: The EURUSD didn’t make significant movement yesterday, but we had bearish pressure earlier today in Asian session, hit 1.2789 at the time I wrote this comment. On h1 chart below we can see the bullish channel has been violated to the downside indicating potential bullish failure at least testing 1.2777 – 1.2740 support area. CCI in oversold area and heading up in h1 chart so watch out for potential upside pullback testing 1.2854 region. Break above that area could lead us into neutral zone as nearest term direction would be unclear. Above 1.2854, next resistance to be tested is 1.2930, which is my key level in medium term. GBPUSD Forecast: Overall the GBPUSD still move in choppy market in the last three weeks, but the main scenario remains to the downside. On h1 chart below we can see the bullish channel has been violated to the downside indicating potential bearish view but we have a good support at the trend line support (white) as you can see on my h1 chart below. We need a clear break below the trend line support to continue the bearish scenario testing 1.5250 region. CCI in neutral area on h1 chart. Immediate resistance at the minor trend line resistance (yellow) and 1.5415. Break above that area could trigger further upside recovery testing 1.5450 – 1.5487 area. USDJPY Forecast: The USDJPY didn’t make significant movement yesterday. Overall price has been indecisive since last week but the main scenario remains bearish. The bias remains neutral in nearest term as there is no significant technical move so far and we might see one if price break below 83.59 or above the trend line resistance. Break above the trend line resistance could be a beginning of bullish reversal in nearest term while break below 83.59 could trigger

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Daily Forecast : September 06

Filed in Gold, Gold Bullion prices, silver by on September 5, 2010 0 Comments
Daily Forecast : September 06

EURUSD Forecast: The EURUSD continued its bullish momentum on Friday after price break above the trend line resistance as you can see on my h1 chart below. This fact could trigger further upside pressure testing 1.2930 key resistance area like I said on my weekly summary. We are still in upside correction phase here. Break above 1.2930 could trigger further bullish momentum testing 1.3115. On the downside, immediate support at 1.2830 area. Break below that area and violation to the downside of the bullish channel could diminish the bullish outlook and keep the medium bearish outlook intact. GBPUSD Forecast: The GBPUSD had a bullish momentum on Friday after break above the triangle as you can see on my h4 chart below. This fact could trigger further upside correction testing the trend line resistance and 1.5525 – 1.5575 region in nearest term. Immediate support at 1.5420. Break below that area could trigger further bearish pressure testing 1.5350 area and keep the major bearish scenario remains strong. USDJPY Forecast: The USDJPY attempted to push higher on Friday, topped at 85.21 but whipsawed to the downside and closed lower at 84.41. This fact should keep the major bearish scenario intact with 83.59 as the nearest level to be re-tested. On the upside, only a move above the trend line resistance could be a serious threat to the

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EURUSD Weekly Summary: Testing 1.2930, the bearish outlook is in serious threat

Filed in Gold, silver by on September 3, 2010 0 Comments
EURUSD Weekly Summary: Testing 1.2930, the bearish outlook is in serious threat

EURUSD Weekly Summary: Testing 1.2930, the bearish outlook is in serious threat The EUR/USD had a significant bullish correction this week. On h4 chart below we can see price break above my minor trend line resistance (yellow) to the upside indicating potential further bullish momentum testing the key resistance level 1.2930 area. Break above that area could be seen as potential bearish failure and bullish reversal in medium term testing the major trend line resistance (red) and 1.3115 area which is the 38.2 Fibonacci retracement of 1.5140 – 1.1876. On the downside, only a violation to the downside on the bullish channel and bearish pullback below 1.2800 could stop the current strong bullish momentum and keep the medium term bearish outlook intact. Have a great weekend and see you guys next week.

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