Before anything, tnx for the excellent postings! Loonie I concur that fundamentally, there ought to be some adjustments to current prices: oil prices haven't got much further to go, because i think US recession is a fact, right now, and not a potential event. In commodities what really moves is demand and weather to which I add geopolitical issues, in the case of energy-related commodities. The reason i'm willing to go against long-term trend is that the system i'm currently using is focused on lower leverage trading daily timeframe (since i'm not yet full time and can't trade unless at home, to trade shorter timeframes). Also I have an opinion that fundamentals awareness take time to be incorporated in prices. Like u said before, their greatest use is in predicting the strength of a trend. So fundamentals matter but still fx is so technical (unlike stocks) that i rather follow technicals (trending vs ranging), accompanied by fundamental anaylisis to understand when turning points (V.Sperandeo:"Change of trend, where fortunes are made") occur and if they are reliable or merely "traps", besides ranging interpretation and trend stregth. In essence it is a true technical system that will follow market behavior meticulously, based on the assumption that in the end all factors interpreted by the masses are incorporated in price behavior. Eur/Usd Here's a good example of fundamentals vs market participants expectations. Fundamentals should be enough to range or even start reversing the trend. But a hell-bent central bank governor (Trichet) and general unawareness of economic trends (as in Europe many economists are already declaring that the EU economy has reached its peak for the current cycle), have made the continuing of trend possible and very real (i'm long!). I still believe this bull ride has legs to reach 1.54-1.55.
As we near 9:00 Eastern Time, North America, the GBP seems to be strugling to finish the last of its 5 wave set up and may fail near current price of 2.0084 or rise a bit more to reach over 2.0100 in which case I'll contemplate a sell for an ABC down of 75-100 pips possibly. Will watch for a confirmed downtrend if the ideal top isnt reached soon. After a Swing down then higher hights are expected unless overwhelming fundamentals stall the larger pattern. There is nothing that I am currently aware of that will do that. AUD/JPY appears low and might present a buy of as low as 95.75ish later today unless fundamentals cause it to stretch in and extended Elliot wave pattern down lower, then up for a large ABC of 50-75 pips depending on pattern. U/J is low and nearing a bouncepoint although could soften a bit below 103 prior to an ABC up before final pulse down in larger picture that may take it below 102.75
EUR does show an unfinished upward Elliot pattern ideally when looking at minute charts. For what it's worth I concur with your targets especially the first. Currently it's stalling as is the G/U though. News is worth watching closely for at this stage if one has the time. U/Cad may drop a bit as outlined in previous analysis but is ready or almost ready for some appreciation... unless hit with contraindicating news. That would delay it's rise. Perhaps the technicals are telling what the news is likely to be/not be.
U/CAD has pushed up with target of 9890 realistic for the short term, then down in ABC then up further is my best guestimate.
AUD/J did bounce at 70-75 enought to take some profit and move stops to zero however the donwtrend is extending although almost ready for another bounce at 95.45-50ish CAD/JPY was a good sell in direction of trend as it ABCed up to 104.50 with enough movement down now to have close stop, target 104.25, probably driven by more U/CAD appreciation. GBPUSD is not softening and finally showing slightly more interest in rising at the moment although no breakout as of yet... Bias is up for a short trade finsihging upward move from this morning in my opinion. Less than ideal trade though, prefer to wait until bouncepoint down and catch the correction or if it doens't rise catch the breakdown when confirmed. Same on EUR/U although upward pressure seems a bit more established there.
Whew, busy day. Too many distractiosn however did get a bounce of 24 pips up on AUD/J from 9425, was wrong earlier on the bouncepoint by 20 pips as it shot down past 9445. AUD is relentless today. JPY near turnaround at 102.70 so A/J could jump nicely as AUD/U climbs and U/S climbs
Significant move on U/J past triple bottm of 102.60, now 55 CAD/JPY is developing into a nice swing as predicted although I missed the ideal entry earlier due to other distractions. Target now practically complete as a secondary target, Elliot wave shows bounce up soon at 103,90 baybe down to 75-80 Trend traders are doing well today with U/J and crosses.
U/J still shows more to go but probably will bounce at 10250-55 and do an abc up seen on 5 minute charts before proceeding lower. A multiyear bottom/support seen at about 101.50-75 about 100 pips lower. Havn't had time to read fundamentals or about market sentiment yet today.
I see the typo... U/S was supposed to be U/J. In other worse the two majors AUD/USD and USD/JPY are both probably going to retrace taking the AUD/JPY up quite a bit. AUD/USD at .9265 x USD/JPY at 102.56 = AUD/JPY at 95.02
TOKYO (Thomson Financial) - The Bank of Japan will need to keep a close eye on downside risks to the Japanese economy given continued instability in the international financial markets, which is posing a threat to global economic growth, central bank governor Toshihiko Fukui said Friday. Fukui stressed that the Japanese economy remains on a recovery path from a long-term point of view. But he warned against leaving interest rates at levels that do not reflect economic fundamentals for too long. 'While the global economy continues to expand, though at a slower pace, downside risks, led by the US economy, are growing stronger,' Fukui told a news conference. The news conference followed a BoJ meeting during which the central bank's nine-member board voted unanimously to leave the overnight call rate unchanged.