Suspence is over

Suspence is over :-)

now we may getting a correction rally in USD...

Yen is uuuuuuuuuuuuuup today, 100+ pips on most of the currencies, but AUD is the leader - 200+ pips.

Stocks sell-off indexes 1+ % down, mostly for the yenn, and higher dollar.

Gold stands @ 790 USD. Looks like carryes sold all gold they have month ago.

Yen raise

GBP/JPY:

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EUR/JPY:

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AUD/JPY:

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Yen index:

AUD/JPY better go up now.

AUD/JPY better to go up, else carry trade will unwind, and idiots will receive margin calls, then they will begin liquidate their portfolios. And becuse the can't sell the junk, they will sell Gold and Energy stocks. This may affect the dollar, which may go up.

P.S. Additionaly we may have double top forming...

AUD/JPY update

AUD/JPY daily chart. Soon we can do long.
(post is from yesterday)

AUD/JPY update

AUD/JPY - mess is full. Targer is down. Stay aside.

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If you looking for EUR/USD view for week SEP/10/2007 click on it.

Interest Bulletin

Interest Bulletin

AU - 6.50% (hold)
CA - 4.50% (hold)
UK - 5.75% (hold)
EU - 4.00% (hold)
US - pending

EUR/USD view for week SEP/03/2007

I. Important news from the week:

1. Mortgage crisis - Bernanke said FED will 'act as needed'. He also said FED will cut the discount rate again, if necessary. More general info here

2. Half hour later, Mr. George W. said that US government need to do something for the fellow Americans who are "in trouble", but will not help the speculators.

3. After FED and Bush speeches, Gold was 10 USD up to ~670 USD, US Stocks was up, lenders Freddie and Fannie are up 4% each. EUR was unexpectedly down.

4. Many analysts such Puru Saxena and Robert Chapman believe that FED will lower the rate.

5. BOJ (Bank of Japan) could raise rates - more info at Reuters

5. US mortgage crisis, have one rather funny effect. People from Florida speaking about lot of mosquito, comes from the pools from foreclosed houses. The sanitary inspections thinking about to fix the problem :-) . The live truly give us interesting stories :-)

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II. The wedge in USD index:USD index is half way down the long term wedge. Actualy nothing new here, picture is unchanged, and is bearish for USD short term.

Before, I wrote following, and once again I copy/paste it:

For first-time readers, and those who do not know, the
wedges are reversal patterns. This wedge is bullish for USD index, no matter
what people say for US economy, debt bubble etc. I am sure that at the end of
the year, the USD will be lower, but wedge suggest we will have one bounce
before that.

This is still valid, but probably we will first see USD index down to the support, and then another rise, probably will break the wedge top.

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III. Wedge in EUR/USD:

EUR/USD 3 days chart:This chart is similar to the weekly chart, but is better as time frame. We see same wedge as in USD index. EUR currently rising to upper boundary. We had some drop Friday, but this is something that occurred before too. The wedge is bearish for EUR, but it must first go to the top.

EUR/USD 4 and 1 hour charts:
I decided to do one and same trendlines on 2 different charts, so to be more comfortable when analysing them.

4 hours chart:
1 hour chart:
Ok, what we have - "Big" channel made in brown. "Small" channel, shown only on 1 hour chart - blue top and brown bottom line.

We have a resistance on 1.36.80 - yellow. It was broken Friday, just price to go down to the support 1 hour after that. May be this line is not important anymore.

There may be a accending triangle - yellow and bottom brown line, or we may even have simetric triangle, shown on 4 hours chart - pink line and bottom brown line.

The picture is still bullish for EUR, and we must see EUR raice to ~1.37.50 area.

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IV. Summary:

EUR continue to rise, USD to fall.

Caution is warranted, since most of annalists are very bullish to USD right now!!!

Happy week and trade!!!

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III. Carry trade with AUD/JPY:

See the post here: AUD/JPY update

AUD/JPY update

There could be a triangle - brown line - top, pink bottom.
If it gets broken from downside, say hello to 84 level.
However (low possibility) if is broken from upside, we may see 108 again.

AUD/JPY fail...

Latest AUD/JPY developments - resistance test, fail, down, not test #2 in progress :-)
Support level is unclear.
Stay aside.

EUR/USD view for week AUG/27/2007

I. Important news from the week:

1. Most stocks, commodities and everything is rebound, from fall previous week.

2. First bank went bankrupt, because of sub-prime mess (not quite sure in this, may be they are in process to bankrupt)

3. USD fall sharply in Friday hitting 1.36.80

4. Many annalists believe that FED will cut rates in September. This is rumor, not a news.

5. RIP Aaron Russo, one of the few American Patriots, which even I admire. (I, who have nothing to do with USA)

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II. The wedge in USD and EUR index:
USD index now heading down, and is 1/2 down the road to bottom (support) line of the wedge.

The target is below 80 (again). Note that even (for some reason) USD go down, only to the pink line, it still have some way down, so is safe to speculate as "dollar bear".

Before, I wrote following:

For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.

This is still valid, but probably we will first see USD index down to the support, and then another rise.

EUR index:
Because USD index is dominated from EUR-o currency, and EUR index is dominated from USD currency, the EUR index looks like mirror of USD index. Same wedge, same raise.

EUR index : USD index ratio:The ratio show same wedge, and once again suggest EUR will go up, USD - down.

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III. Wedge in EUR/USD:

EUR/USD 3 days chart:
Our favorite chart. It is like the EUR/USD weekly chart. Wedge is shown once again, and EUR is half the way up. Target is somewhere about 1.40. I will calculate exact target later in the week. Once again, EUR - up, USD - down.

EUR/USD 1 hour chart:

UPDATE: SOMETHING IS WRONG WITH THIS CHART, BUT THE CONCLUSION IS STILL CORRECT. WILL REPOST TOMORROW THE CORRECT CHART!!!
This is speculative chart. It shows the upper channel of EUR/USD. We have 3 parallel lines. Currently, EUR may found support at what supposed to be resistance some time ago - brown line. Direction - either UP, or down to the support (blue) - 1.35.90, and then UP.

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IV. Summary:

EUR continue to rise, USD to fall.

Continue to watch what the JPY will do in general, even I do not think it will affect EUR/USD.

Caution is warranted, since most of annalists are very bullish to USD right now!!!

Happy week and trade!!!

Rest in peace Aaron Russo!!!

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III. Carry trade with AUD/JPY:
I did not followed this market for some time, but looks like, there are some exiting developments here. In case AUD break the bottom brown line, then there will be nothing to stop the AUD to raise at least to upper brown line, or even higher.

Wait, Passions is everything ;)

JPY view for week AUG/20/2007

Last week the Japanese Yen raised against most of the currencies. This was devastating for the markets world-wide, even Bulgarian stock market (BSE) was down.

As I already wrote in my post here , JPY is the fuel for carry traders, usually gigantic US hedge funds. And any substantial raise of JPY against USD or different currencies they use, go to big loses. That is why last couple days they selling like crazy. And because they are using big leverage, like 10:1, in order they to get out $ 1,000.00 out of the stock market, they need to sell stocks for $ 10,000.00 . And because they can not sell the "toxic" sub-prime bonds and stocks, they selling whatever they can - energy, gold, silver, technology etc.

However, there are lot of other sources where you can read about it. Here I write about currency speculations, so this is enough for the moment. (Even I will copy / paste same in my EUR/USD report later today :-) )

So lets take a look on JPY charts.
(Yen index chart not shown, but I think it not need to)

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AUD/JPY 1 day chart:
Tragedy is full :) , a wedge, a fall from the wedge. Currently we have some support, but we will see.

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EUR/JPY 1 day chart:
Wedge, fall from it, then a parallel channel from a while, then fall from the parallel channel.

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USD/JPY 1 day chart (GBP/JPY is same):
Something like a wedge, but actually a rising parallel channel (brown). Then, parallel downtrend channel (pink). Finally a drop from downtrend channel.

Here, in USD/JPY, we still have hope that this is false break, and JPY can go back in the channel. But anyway, the channel in question is downtrend anyway.

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Summary:
Note all this is not a technical analysis, at least I do not look at it as it is, because I am checking just a 1 day chart.

From what I see, I believe this will have not negative, nor positive effect on EUR/USD trading.

the JPY - up = the other currencies - down
the JPY - up = carry trade - down
carry trade down = stock market - down

and if you add panic,
stock market panic = all derivatives, commodities, metals and energy down

Stay aside :-)

Bau! AUD crash...

AUD/JPY: The power of the wedge...
1 day VAPORIZE everything since March.2007.

Some extremely important charts...
(updated 15.AUG.2007, 17:00 GMT+2)

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GBP/USD - 2 days:
GBP falling, probably there are a parallel channel, and we are near bottom.

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EUR/USD - 3 days:
Wedge almost completed. If price fall to 1.34.50, I will consider the downtrend is complete.

Do not forget that this wedge is bearish pattern. This means, if wedge is "over", the USD may rally very hard to let say 1.28.00. If you think this is too much, think again. 2 weeks ago I said EUR/USD will be 1.34 soon, and nobody from friends believed :)

Some analysts (http://www.deltastock.bg/) suggest target is ~1.33.50. Looks like they believe the brown line is more important than long term support. We will see.

DON'T BE GREEDY, STAY ASIDE!!!
(and do not play EUR bull either)

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AUD/JPY - 1 day:
AUD/JPY going down...

Probably, a bullish wedge is forming, but is too early to say.

We expect BOJ (Bank of Japan) to *cut* rates (yes, cut), or to do something else to stop the soaring of JPY, but we will see.

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Happy (not) Trading :-)

This week the fall in EUR/USD continue, but in Friday a strong rally happened. Let see the charts again :)

I. Wedge in USD index and EUR index:

USD index began to raise, enter the wedge again, then fall again outside it. May be, the support no longer is as is on my chart, but some points below, where the last bottom were.

EUR index:

EUR index - no big change, except raise from Friday. However, the raise is inside the wedge, also we saw such raises before - see yellow marks. Same situation is in EUR/USD.

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III. Wedge in EUR/USD:

1 week chart:
Similar to EUR index, no big change - the raise is inside the wedge, and there were similar raise before (yellow mark).

I still believe the way of EUR/USD is down, but we may see some more raise.

1 day chart:
This chart is added only because of brown line. I can not be sure if the line is correct, we will see this tomorrow, but if the line is correct, this will finaly prove that EUR/USD falling.

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IV. Summary:

If you are not in the market, do not enter in any way, stay aside.

Caution is warranted :-)

Happy trading :-)

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V. AUD/JPY watch:

No change from last week. We are on some support, but may be some more downside will come first.

Stay aside :)

This week the fall in EUR/USD began.

I. Wedge in USD index and EUR index:

USD index:
The raise of USD bring back the USD index inside the wedge. Currently it will raise to the upper boundary. Then, it could break upper boundary (resistance), or fall again to the support.

EUR index:
EUR index is oposite of USD index, and falling. Currently old high from April act as a support, but it will be broken soon. Fall will go to the support and then support will be broken, or raise will begin to the upper boundary (resistance) again.

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III. Wedge in EUR/USD:

3 days chart:
3 days chart is similar to weekly chart. Currently price fall, and is near 50% fall (according the wedge). The fall will continue to the support level.

As I said, the support may hold or may be broken (because wedge is bearish pattern).

16 hours chart:
Here, you can see the different supports that may be in play during the fall...

1 hour chart:
This chart is shown in order to see the parallel channel in which EUR/USD falling down. It means that even if we see 1.37.20, the fall will continue.

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IV. Summary:

EUR/USD will fall first to about 1.36.10, and later to about 1.34.

Caution is warranted :-)

Happy trading :-)

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V. AUD/JPY watch:

AUD/JPY fall off the wedge. The support levels are with brown. Since overnight interest is really high, stay aside for now. Because of same reason we may be will skip these analysis next 2-3 weeks until AUD begin raise again.

Another good week :-)

This week was very interesting too.
EUR/USD hit new high - 1.38.42.
The EUR/USD bears made money, the bulls made money too. We hit 100% profit, then we had some lost (unclosed), so profit now is about 90-95% (could be less).

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I. Wedge in USD index.

USD index forming a wedge, and broke below support level. I think this is false break and USD index will bounce very soon from the support, see the EUR index and EUR/USD below.

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II. EUR (XEU) watch.

The EUR index forming a wedge. Because USD index is dominated by EUR currency and EUR index is dominated by USD currency, this wedge is corresponding to the wedge in USD index. In fact chart is almost opposite.

It still not reached the resistance yet. However, it is too close to the resistance, so it may begin to fall any moment now.

The ratio between EUR index / USD index shows same wedge again. The wedge is completed, and fall may start any moment.

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III. Wedge watch in EUR/USD.

EUR/USD 4 days chart:

This chart is similar to weekly chart. There are same wedge. The wedge is not completed. However, EUR/USD hit new high - 1.38.42. This is probably enough for the wedge, and now price must begin fall to the target price of 1.34.00.

EUR/USD 8h chart:

A rising channel, but resistance is just above (not shown)

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IV. Summary.

EUR/USD will begin to fall.

Check previous week EUR/USD view here, because the situation remains the same.

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V. AUD/JPY watch.

AUD/JPY went to upper boundary of the wedge, and currently dropping to ~105.60. Probably it will bounce from the support.

Is too expensive to play against AUD, and now we need to wait the fall, and then we need to check if is too risky to play the raise of AUD.

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Happy week and happy trading :-)

Yesterday, I conducted following AUD/JPY "carry trade" experiment - real money, but educational purpose :)

In 23:55, I bought 200,000.00 AUD/selling ~21,512,000 JPY.
For the operation, my broker blocked ~1,276.00 EUR from my account.

In the midnight, I received carry trade interest of 2,520 JPY.
This is 23.42 AUD or 14.94 EUR, or 1.17 % of the blocked money for 1 day only.

Later on, I closed the possition, and I had my ~1,276.00 EUR unblocked.

For EUR/USD expanded weekly view - click here

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A raising wedge, currently it going to the upper boundary. After such bearish wedges, we have BIG FALL :)

I wrote:
I WILL NOT PLAY THIS, since, the range is very close ~ 2 cents (104.50 - 106.50).

Now, it looks like the wedge is not so thin, and the yellow mark show what were good buying opportunity, which we missed because traded heavy EUR/USD. Nice strategy would be to wait for such drop next days and to enter.

I. Wedge watch in USD index.

We continue to watch the wedge in USD index.

Because stockcharts.com do not show realtime chart, which made me to loss big profit last week, I am beginning to use INO.com chart from now one.

Also from now one, I will skip XEU chart, because is almost the same as USD chart, and surely it put some "respect" to the analysis :-), but it does not really need it.

So back to the USD index:

Currently, the index is trying to break the support from the previous low (brown line). Support surely will be broken beginning of the next week, and then it will fall to the wedge support. Wedge will hold, so this is the target - less 80.80 - 80.90. This I think correspond to EUR/USD - 1.40

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II. Triangle watch in EUR/USD.

3 weeks chart - still shows the wedge, and EUR raising. The triangle was broken last week.

16 hours chart - shows the broken triangle. We have the long term support from the triangle @ 1.3350, but we have now, a new raising short term support @ 1.3525. I expect the price to fall more or less to this level, before a raise to level over the last top will occure - was 1.3680 I think.

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III. Summary.

EUR/USD raising... :)

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IV. Carry trade using AUD/JPY


A raising wedge, currently it going to the upper boundary. I WILL NOT PLAY THIS, since, the range is very close ~ 2 cents (104.50 - 106.50). After such wedges, we have BIG FALL :)

Unfortunately, due to huge interest rate difference, I do not recommend the oposite play eighter.

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Happy week and Happy and Profitous trading!

I. Wedge watch in USD index.

we continue to watch the wedge in USD index.

As FED kept the interest rates unchanged, and continue to print money, the USD index continue to fall. USD index is near week support just 0.1-0.2 points below (not marked on the chart) see the spike - the small "umbrella" candle. The uptrend is broken, and we have falling to 81 area.

Does this mean we need to buy EUR @ current levels - I am still not sure.

The EUR index (XEU) chart, show same like USD index chart, but inverted. We have same short term resistance (the spike).

This is becasue USD index is dominated by EUR currency, and the EUR index is dominated by USD currency.

This chart is the ratio between EUR index and USD index. Ratio raise and there is *NOT* this short term resistance (support for USD). So may be the spike is related to JPY or some other currency from the index basket.

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II. Triangle watch in EUR/USD.

The huge raise in Friday was rather unexpected. I believed that the EUR will fall before final raise. Anyway, the raise I am expecting must be 1.36 - 1.38++, so we saw nothing yet :)

4 day chart is similar to what we have on EUR index chart - a wedge. Note there are different resistance level, which I am marking on next chart.

1 day chart (because of bug in my charting software, I must say this may be 20hours or 30 hours chart).
Here we have the triangle, and what I thought is upper boundary (brown line), is broken now. There are a resistance level (horisontal pink line). I made freehand line (upper blue line), which now, must be the upper boundary of the triangle - Because is freehand, I can not say if the triangle is broken or not. I am going to wait till Monday morning (EU time), before I decide what to do. Is quite possible, the price to fall to ~1.3420. Unfortunately, is quite possible, the price to go even down to ~1.3380 or even to ~1.3320. We will see.

The 12 hour EUR/USD chart - it gives us misc signals. We could see a fall to upper blue line - old resistance, now probably support.

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III. Summary.

EUR/USD will raise. I still think a pullback to 1.34 or lower is possible. We will see how it will open tomorrow, before find entry level.

*** DO NOT SHORT EUR/USD :-) ***

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IV. Carry trade using AUD/JPY [new]

As I promise, I began to watch AUD/JPY now, and it will be included every week from now one.

1 day chart - AUD bounced from the support line, now it will go up to the resistance line. Note the strong support at ~105.20. We may have one more pullback to the support line.

4 hours chart - we clearly see the resistance, now, eighter up or down.

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V. AUD/JPY Summary.

Wait for Monday open, if everything is fine:

Buy at ~102.40 :-)
More unpasioned traders may buy at 103.00, and incrementaly to add more AUD's until 102.

*** This is not a trading advice ***