Update on G/J shows that a bounce down of 50 pips from 19950ish happened but not a larger swing down. The movement higher up shows a larger ABC up is completeing before a downswing as being the favoured interpretation. CAD/JPY has been driven up higher by the fall of U/CAD which fell more than the U/J rose... and did bounce down at about 100.00 but not more than about 20 pips. The trend direction on majors seems unfinished at the moment.
Canada's Dollar Rises Most in Three Months as Commodities Surge By Haris Anwar April 16 (Bloomberg) -- Canada's dollar rose the most in almost three months, nearing parity with its U.S. counterpart, as prices of the nation's commodity exports surged and global stocks gained. The Canadian dollar strengthened against all 16 of the most- traded currencies as crude oil set a record. Gold and copper also advanced. The appeal of oil and other commodities as a hedge against inflation grew as the U.S. dollar fell against the euro. Commodities account for about half of Canada's exports. Global stocks rose after better-than-forecast corporate earnings. ``From the fundamental point of view, most factors are supporting the Canadian dollar today,'' said Matthew Strauss, senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. ``Oil is hitting another record, base metals are rising and equities are strong. The environment is conducive for the currency.''
Au/U U/Ca (both short) Liquidated Aussie with small 30 - 40 pip, as said before it didn't look good (temporarily right on daily charts but against weekly trend) and it proved more or less a useful forecast. Liquidated Loonie at 1.0110 more or less all of my position, quite bad timming since it fell much further. Still got small profit. E/U (Short) Entered at 1.5840 (Looking for bearish divergence patttern on the daily charts, plus overboutht signs on monthly as price is way off upper monthly bollinger band) Stop: close to 15950 (upper daily bollinger or by the end of this week if prices don't come down, since next week there might be more room on the upside, in weekly charts) TP:Initially was trying to play the narrow range scenario (lower daily bollinger band) but now I'm jus figuring it is way strong on the bulls' side, so maybe going for a small profit or maybe even some losses. E/Au (short) Price action showing good signs of entering a narrow range situation, on daily charts. Have to see to which side it breaks (think it could happen next week, if not, probably in the next 2 weeks). Carry Trade (G/J, Ca/J) I exited my short position with about a 9 point profit on the S&P the day before yesterday (stopped out in US early trading). It was more or less predictable: we had double doji (Monday and Tuesday) plus a bullish signal from stochastics to get the attention of some. On top of all that technical analaysis we had good (with respect to analyst expectations) earnings new. Was watching Bloomberg Morning Call when Wells Fargo came out (not impressive at all but as or better than expected), also JP Morgan (bad results but in line with expectations), I'm thinking most might feel that all of this has been discounted already, concerning financials (the big catalyst for recent wave of bears). Anticipation for S&P. I'm looking for 3 points of significance resistance in technical terms: the 100-day SMA, 100 Week SMA, 200-day SMA. I may go for the up move in prices if it crosses the 100-day SMa looking to cash in on the 200-day SMA (risky one to me). On the short side: though I believe it could cross the 100-day SMA, really am into entering short on the 200-day SMa resistance. Other strategies might include range bound trading on daily charts, with a bias on the downside.
E/U (Short) Still waiting for the one-day down move that can enable profit-taking. Looking more like a narrow range trading scenario for next week, with daily bollinger band flattening (and their width is shortening). Also, price action is showing significant respect for the upper daily bollinger band (for the third consecutve day). The bearish divergence pattern (on stochastics) will be very imperfect (in case it happens). Cable (short) On the look out for some very short term opportunity from price action bouncing-off the upper daily bollinger band at around 2.075-2.0150 range. Expecting somewhere between 50- 100 pips from this potential trade. Carry Fundamentals Find it hard to anticipate any boom, looming soon. Housing may be showing signs of possible bottoming, but historically it has been fast to reach the bottom and not as fast to come back up (very much like stocks). If the Housing market takes its time in the bottom, would expect more spillover phenomena than currently anticipate. Credit Crunch. Am under the impression the worst is over, but still believe that the worsening of this crunch has a small chance of unfolding. Even if markets know that Central Banks will come to the rescue, CB's pockets have a limit and there is still the notion which arises very frequently during such events, that Governments tend to support those who performed less impressively. In the meantime, credit crunches are all about trust and there are 3 big destination for loans: Governments, Companies and Consumers. Credit card and consumer loan defaults numbers are not in good shape; Companies are finding harder to get money because the banking system (US and Europe) is busy cleaning up NPLs, tightening credit concession conditions and shoring up balance sheets (looking themselves not to lend more, but instead to borrow more, or raise capital); Governments are starting to take out all their tricks for avoiding economic collapse and in the US there is significantly fewer room left for spurring economic growth (we may not be flying on one engine, but we're still close to that). Finally what carefully look at as the possible next big headache: The commodities boom. Both of the circumnstances abovementioned may not be strong enough to give way for an economic collapse, but if inflation continues advancing at the current pace, it becomes ever more real the prospect of not an oil crisis but a whole commodities led crisis (specially those that relate most to basic household daily routine needs). We've had Orangejuice, then Corn, Wheat, Nickel, Soybeans, Milk (also had pork prices in China) and now Rice... in Grains it seems like we're running out of substitute candidates, furthermore, it is easier to substitute a metal for another one in a manufactuing process, but not so when we could be talking about whole country's cultural eating habits. Also, in commodities, demand is very flexible (consumer switching supplier costs are almost always getting lower), but supply augmentation is much less flexible. US economy. Growing through exports is not an "economic crime", but it makes an economy more dependant on overseas economic growth, instead of domestic internal capabilities. Also, the virtuous cycle, in my view, for any nation-economy is prolongued GDP growth accompanied by the strengthening of respective currency. Exports still need demand and with other economies talking about slowing growth and rising interest rates, exports appear to be underpinned by unreliable driving forces. (I started trading index stocks well before Fx, take both endeavours currently, so hope this fundamental stocks analysis can help u in carrytrade) Technical S&P milestones for the next week will be to test the three resistance points on yesterday's post. See if it goes for range-bound trading on daily charts. See also if we get renewed testing of March lows and if there will be a price break from range... Resistance: 200-day SMA and 100-week SMA Support: March lows (or January lows, double bottom) Expect Stochastics (533) bearish cross-over on daily charts by the start of next week. Enjoy ur Weekend & Hope we get more price action next week!
Distractions got the better of me this week again. There were some really nice swings although after the rise of the USD/JPY and JPY crosses some good retracements are likely due soon. I sold the USD/JPY at 104.48 and have taken some cash at 27 in case it climbs again before larger retracement which is possible given the Elliot Wave pattern. Larger trend will continue at some point so buying if U/J drops back down significantly makes the most sense at this point.
Starting Week Bell! E/U I've exited on Friday with that one day drop move I was expecting (around 80 pip profit). But still not good enough because I've experienced a 100 pip loss during the hold out time for this bet. Profitable but not convincing. Cable (short) Shorted just at start of trading action, Fx opening on Sunday, at around 1.9970. Close to upper daily bollinger, Slow stochastics bearish cross-over and also in tune with weekly trend (plus a recent rally over the greenback may be still facing some more days of profit taking, range bound trading and short-term uncertainty to continue dollar selling. PT: Expect to take part of profits at 20-day SMA and the other will go by free will or above entry price. Stop: Initially upper daily bollinger, but with the recent action on the pair, am thinking about a stop at entry price lvl or even lower. Carry Trade It's going to be an interesting week: If stocks go further up, S&P will meet resistance right above 1400 at 100-week SMA (a strong milestone to me). Witnessing some carry trade movement coming back in force (specially last 2 weeks). To do carry trade one needs a destination for the money and stocks seem to be so much in favor, above all other assets. Week ahead Some housing data coming out this week: curious to see if we can follow up on talk about bottoming. Rate decision for Canada and retail sales, UK retail sales and GDP, some PPIs on EU plus, retail activity in Japan and several country trade reports, including Switzerland. U/J Bear slide may be over but would still need clearer definition to assume that with more confidence. But then again, if it's right it, a long position that catches aturning point on this one can yield wonderfully (turning points, "where fortunes are made"). There are still a lot of resistande hurdles for stocks (both fundamentally and technically). Kick start the week, leaving all unnecessary distractions aside!
Selling the U/J was good. Took the rest off at 104.02 and if it drops much more than current price of 103.15 I'll be attempting to pinpoint a buy up for larger swing. GBP/JPY came up in an ABC from 204.30 and is trending down again for possible double bottom of 204.28 or lower. The larger pattern there seems to be upward to so we'll see if the U/J is the driving force of direction as it often is or G/U...
EUR/JPY seems nearing a bouncepoint at 165.00 area on larger scale or may have hit at 164.75 but I'll wait for a daytrade sell attempt a bit higher if all signs seem to remain affirming. USD/CAD seem like it may be a good buy for a swing trade if it comes down below 1.000 again, target could well be 1.0400 conservatively. AUD/USD seems headed for double top or better on larger scale that being about 9500. Currently 9420.
USD/CAD dropped after spiking and was a good sell for a daytrade from 0150. I missed that point but bought at 0025 and exited at 0053. The larger swing concept up from below 1.000 is the one I'll continue to watch for as the large scale Elliot Count still seems to indicate a probable impulse wave up, possibly this week. EUR/JPY was a good sell at above 165.75 for a large swing attempt down... Target 163.60ish
EUR/JPY dropped nicely and I was able to take some profit. USD/CAD didn't drop quite as much as I thought it might ideally, now it's risen on news and will likley work higher although a significant retracement may occur at about 0225. And the AUD/USD rose as news continues to be positive enough. I bought after news yesterday and took a few pips although could have held longer.