Eur/Usd The four hour trend is short. The failure to hold above 1.4000 looked to be as much a Usd-desire story overall, rather than the usual 'Greece is sinking' headline that is becoming rather tiresome. The euro has hit the Bollinger Band center line, and is now looking to confirm direction. Near-term moves may not get too far ahead of the ECB rate decision on Thursday. Daily Chart: ATR is 135 pips. RSI is oversold. SMA is resistance.
Gbp/Usd The four hour trend is short. Gbp/Usd is still trading within a daily chart sideways channel that has held as support and resistance since May 2009. In the week of the Bank of England rate decision there is no reason to think that a break and hold will now happen, especially as price action is still very weak. The pair is back into the price points formed in early January, with a road-block of resistance all the way up to 1.6250. Daily Chart: ATR is 160 pips. RSI is moving under neutral. SMA is resistance. Stand aside ahead of the BoE.
Usd/Chf The four hour trend is long. The pair recently broke back higher, and back into the 4 hour chart channel that had been in place since September 2009. The near-term bounce off the 200-day simple moving average at 1.0535 was in reaction to Usd buying that was linked to Treasury note purchases. Daily Chart: ATR is 105 pips. RSI is heading towards over-bought. SMA is support. Favor a straddle.
Commodity and Yield Pair Review
Aud/Usd The four hour trend is short. The pair is oversold on the daily chart, and just signaled a short reversal on the 4 Hour chart Bollinger Band break of the center line. The pair had recovered in 36 hours what the RBA rate decision took in 1 minute to lose on Monday, and then gave most of that back again in one 4 Hour move on Wednesday. Daily Chart: ATR is 120 pips. RSI is heading to oversold. SMA is resistance. Favor an oversold bounce.
Usd/Cad The four hour trend is long. The pair reversed off the top of the 4 hour chart range, from an area that has sent price action lower on each test that has happened going back to Nov 2009. The last 4 trading sessions have been unable to move things too far past the 100-day simple moving average at 1.0560. The path of least resistance looks to be lower sideways ahead of Canadian employment on Friday. Daily Chart: ATR is 105 pips. RSI is backing off over-bought. SMA is support. Favor a straddle.
Usd/Jpy The 4 hour trend is short. The Usd/Jpy pair has been running sideways recently, with daily chart moving averages locking the pair in a tight channel. In doing so it has created a strange looking set of near-term charts. The pair moved higher in reaction to threats from the Japanese Finance Ministry that an over-valued Jpy will be addressed if the market does not adjust Usd/Jpy weakness, Daily Chart: ATR is 105 pips. RSI is at the neutral line. SMA is support and resistance. Favor a straddle.
Dollar, Equity, Commodity Review
The sideways crawl that has been the norm ahead of the first Thursday and Friday session of each month, followed through again on Wednesday, and the overnight session is unlikely to offer anything different. The first Thursday of each month normally brings the European Central Bank and Bank of England rate decisions, with the first Friday bringing the Canadian and U.S. employment reports.
The 4 Hour charts are easily holding a long-Usd trend, however, the sharp moves that hit as Wall Street absorbed macroeconomic data retain the pattern of having most of the year's moves housed in one extended 4 Hour candle in each 24 hour session. The market has found fair value, and it is on the long side of the dollar ahead of a wall of red flag releases.
Dollar Index. The 4 hour trend is long. The Usd has been bought in the move to the safety of Usd based Treasuries. Traders now have separation in regard to the differing percentage moves that are being made on each pair, as well as now needing to now carefully monitor the red flag economic releases that are likely to set the next substantial dollar based moves in play, as the global markets re-connect the dots and tenuously buy the Usd in-line with the selling of stocks and commodities. The 4 hour global market trends are favoring the short side of risk, and the long side of the dollar. Favor a straddle.
Equity Futures. The 4 hour trend is short across the global equity market. Wall Street stocks closed near to the low of the day, in a move that reflected a complete disregard for positive macroeconomics, and positive earnings reports, ahead of another huge week of red flag releases. The Usd is now moving up at the same percentage rate that stocks are moving down, ahead of the Friday Non-farm Payroll release. Favor a straddle.
Crude Oil. The 4 hour trend is short. Oil was recently trading at $77 per barrel after containing the buying seen in the previous sessions. Price action dropped down to test daily low at 76.50, but could not hold there. The long speculative interest in crude oil trade banked profit recently and in doing so aided the long side of Usd near-term buying. Favor a straddle.
Gold Bullion. The 4 hour trend is neutral. Gold Bullion has easily held below $1,125, however, the precious metal is easily holding 1105 support. Over the last week of trade, gold has regained $35, following the equity markets lower. To the downside, the next important support area is at $1195.00. Favor a straddle.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved.
Stocks Plunge Risk at Highest Since April 1984, Survey Finds
(Bloomberg) -- Expectations that U.S. stocks will tumble 10 percent or more rose to highest level since April 1984 this week, according to Investors Intelligence’s weekly survey of newsletter writers. The proportion of investment writers who anticipate a so- called correction climbed to 38.9 percent in the week ended yesterday, an increase from 36.7 percent in the period ended Jan. 27. The New Rochelle, New York-based company has tracked the projections of newsletters since 1963.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7MG6IzewL1E
Three Reasons to Buy Stocks
By: Robin Knight CNBC Assistant Web Producer
The stock rally of 2009 can continue this year as there are three key factors underpinning the market, Kevin Gardiner, head of investment strategy EMEA at Barclays Wealth, told CNBC Wednesday.
http://www.cnbc.com/id/35214204
Crude Volatility to Spike If Breaks $65-$85: Technical Analysis
(Bloomberg) -- Crude oil volatility, which has dropped to its lowest in two years, will stay at current levels until prices breach a “band” that surrounds them in the next couple of months, according to Hudson Capital Energy. Oil traded in New York will fluctuate by 25 to 35 percent until prices break free of the $65 to $85 a barrel range, said Clarence Chu, an options trader at Hudson Capital in Singapore. Crude prices, if able to successfully drive up to $90 a barrel or slide down to $60 in the next one or two months, would push implied volatility above 50 percent, he said. The $65-to-$85 “band” uses the highest and lowest prices of the front-month crude contract in the past five months, Chu said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aMzt7JsTf6j0
Loonie Confronts Greenback’s ‘Double Top’: Technical Analysis
(Bloomberg) -- The Canadian dollar may rally against its U.S. counterpart if it avoids over the next two weeks falling through the weakest level of its recent trading range, according to Royal Bank of Canada, the nation’s biggest bank. A close below support at C$1.0578 would indicate the U.S. currency’s advance is beginning to erode, George Davis, chief technical analyst in Toronto at RBC, wrote in a research note today. The greenback will have to surmount a “double top” above C$1.07 to advance toward C$1.0867, according to Davis. Support is a level where buy orders may be clustered.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSvSR98d2kzg
Gasoline Poised to Rise Past $2.19 a Gallon: Technical Analysis
(Bloomberg) -- Gasoline futures are set to rise past $2.19 a gallon after breaking through resistance at $2, according to a technical analysis by Newedge Group.The March contract “surged higher, pulverizing resistance,” said Veronique Lashinski, a senior research analyst for Newedge USA LLC. “It is positioned to continue higher,” and challenge resistance between $2.05 and $2.10.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azujVLnNsCzs
Dollar Gains Against Yen, Euro on Economic Recovery Signs
(Bloomberg) -- The dollar rose against the yen and the euro as a report showed U.S. companies cut fewer positions than anticipated two days before data forecast to show the economy added the most jobs in two years. The greenback gained against 14 of its 16 most-traded counterparts tracked by Bloomberg. The euro gained against the yen after European Union Monetary Affairs Commissioner Joaquin Almunia said the EU endorsed Greece’s deficit-cutting program.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atZO5lDVeml0
China Policy Risk Will Drive Steel Stocks Down, Deutsche Says
(Bloomberg) -- China’s monetary tightening will hurt steel stocks because traders will need to sell inventory to finance working capital, driving down metal prices, Deutsche Bank AG said.
China Stocks Drop ‘Speed Bump’ Before Rise, CLSA Says
(Bloomberg) -- The tumble in China’s stocks is a “speed bump” and won’t last for more than three months before rallying, said Christopher Wood, chief strategist at CLSA Ltd.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNpktSpEWUjk
Biggest Bubble in History Is Growing Every Day: William Pesek
(Bloomberg) -- Real estate, stocks, credit. China sure has its share of bubbles. Oddly, little attention is paid to the biggest one of all. China’s currency reserves grew by more than the gross domestic product of Norway in 2009. Its $2.4 trillion of reserves is a bubble all its own, one growing before our eyes with nary a peep out of those searching for the next big one.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4mPCXeGTl4Y
U.S. Stock Options With Biggest Changes in Implied Volatility
(Bloomberg) -- The following are the U.S. stock options that had the biggest percentage changes in implied volatility from the previous trading day as of 11:30 a.m. in New York. This {OSCH
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4Go_KX6qNy4
Using the Super Bowl to Predict Markets
http://www.marketwatch.com/video/asset/news-hub-using-the-super-bowl-to-predict-markets-2010-02-03/04998208-C320-4F26-A915-075FD16E6D3B
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