A Broad Look At the Currency Markets

Interesting attemp to technically clear the USD index...

A Broad Look At the Currency Markets

EUR/USD view for week FEB/18/2007

I. Notes:

Because the market is real mess now, this time I will do some long term view, and will give no special recommendations :)

I also will include USD/JPY, because at this point this couple is more clear for trading.

---

II. USD index:

Weekly:This picture is unchanged for monts. Upper blue line is long term resistance. Brown line is old wedge support. The second blue line is probably the support of the USD downtrend. I say "probably" because is not clear where exactly this line must be placed, also there is no confirmation for exact same line in EUR/USD. The pink line is short term support.

Daily:The pink line from weekly chart is the support here, shown in blue. The figure looks like a triangle, so the price may fall much next weeks. However this is unclear.

---

III. EUR/USD weekly:
Same wedge/parallel channel here. The resistance is not shown, but is there :-)
Note the pink line. EUR raised 3 times, but was unable to break it.

---

IV. USD/JPY 2 days chart:
On USD/JPY front, we see that the USD decline since several weeks. Channel is almost perfect. At the moment USD raising to the upper boundary of the channel. However it may be a wedge too. In order to go long, we will need to see break on pink line, which will indicate there is NO wedge.

---

V. Summary:

This is almost the same as I wrote 3 weeks ago:

I believe FED will cut more, US stockmarket, Gold, Oil, EUR will raise. However in short term we will could see a dollar rally.

I still think EUR is just a paper, but as I said before, FED is in panic mode now and will sacrifice the dollar, in order to save stockmarket and to avoid recession and deflation. Of course I do not believe we will see deflation except in housing sector, I also believe the US will fall into a recession anyway. But I still believe US stockmarket will raise in USD terms because of inflation and money printing.

Happy week and happy trade!

GBP/JPY

As per old broken wedge, now first target is 222, then if not bounced, much lower...

More dodgy business with GBP/JPY

A wedge is broken, on the correct side.
Currently we are on the parallel channel, which may be will be broken too.
From the other side, the JPY falling against everything,
so the rally in GBP is not a surprise.

Dodgy business with GBP/JPY

GBP/JPY 1 week chart:
H&S formation still here, however due to high volatility and extremly high carry-trade interest (paid 70 EUR for 150K per day last week) - do not enter short.

---

GBP/JPY 4h chart:

a wedge is formed, also is broken to the "correct" side. Now - 237 - 238 is the target. Once again - do not trade it, do not trade it, do not trade it :)

Marc Faber videos.

http://cmd-chart.blogspot.com/2007/04/marc-faber-video.html

Marc Faber videos. I do not like his view right now.

p.s. Actualy second video is very good.

EUR/USD view for week NOV/19/2007

Not much things changed since last week...

I. Important news from the week:

1. Gold correcting ($785)

2. Market correcting, while JPY raise (unwinding carry trade).

---

II. As I wrote before:

FED blew it!!! They totally destroyed the dollar in long term. I think they will inflate now, and stock market will go higher and higher, but only in nominal terms.

GOT GOLD :-)

---

III. The parallel uptrend (old wedge):

EUR/USD 1 week chart:
No change, price is inside the channel, probably will go down. In case it go up, it will not show some significant new high.

EUR/USD 4 hours chart:
For the moment this is just a potential H&S, but we will see.

EUR/USD 1 hours chart:
Here is the "speculative" chart. This chart was done Friday.

Blue channel down - target is 1.46, because there we have longer term support (pink), then up.

Currently EUR/USD open up, with 20 pips gap. It is above the channel, but I think soon it will fell inside. I am still unsure if I will trade this gap. Better wait 1.46 and go long

---

IV. GBP/JPY H&S:

GBP/JPY 1 week chart:
No chart, but we still have huge H&S formation. Target is under 200.

Do not trade GBP/JPY. It is extremely volatile.

---

V. Summary:

I can say absolutely the same as previous week:

Generally USD will rise / NEUTRAL now, EUR to fall, but play carefully.

There is one very important thing that helping USD - everybody is against it, even supermodels like Gisele who demanded her contract to be in EUR :-)

Remember EUR is just a worthless paper as the USD is. Eurozone has own problems too. The only reason EUR go up against the USD is because Eurozone and ECB do not inflate as much as FED. Or may be they do now. Who knows. The inflation we see now, is actually from money supply increased 6 mo ago. So we do not know if ECB printing money or not.

There is only one real currency and is called GOLD. As you can see, gold rising against all currencies, not only against the USD. This may mean only one thing - inflation rising. Actually some people believes gold is bubble, but this is wrong opinion (will explain why I thing that some other time).

Happy week and trade!!!

GBP/JPY

I will never ever trade this again,
a stupid currency vs yet another stupid currency.
Every day you may expect 100 pips up, then 200 down, then another 300 up :)

Currensies

EUR/USD - down for now, will see how much, probably 1.45.90.
But I think we will need to wait for US data in couple of hours.

GBP/JPY - down, but hit our stop, so we end up to only 70 EUR profit
three days lost... whatever, at least is profit :)

GBP/JPY and EUR/USD update

GBP/JPY 1hHere we have broken uptrend, current direction is probably down...

---

EUR/USD-30 minHere we have uptrend or wedge, currently the brown channel is in play. The purple candle is added soon after I captured the chart. We will need to wait how the things will develop.

GBP/JPY update

The blue channel is not channel at all, but a wedge.
However we may see some more downside next few days.

EUR/USD view for week NOV/13/2007

I. Important news from the week:

1. EUR/USD hit 1.47.50, Gold passes 845 USD, CAD now "costs" 1.10 USD, GBP/USD = 2.10.

2. JPY rising against everything, but mostly against GBP and EUR.

3. "If USA want to debase their currency, we will respond" - French president Sarkozy said.

---

II. As I wrote before:

FED blew it!!! They totally destroyed the dollar in long term. I think they will inflate now, and stock market will go higher and higher, but only in nominal terms.

GOT GOLD :-)

---

III. The parallel uptrend (old wedge):

EUR/USD 4 days chart:
What we have here? Price go to upper channel line, even broke it for 1-2 hours, but then fall inside the channel.

Note (not shown) EUR is overbought on both weekly and monthly chart.

EUR/USD 1 days chart:
Here we have the channel I show last week. Price remained inside the channel ALL the time, even when hit 1.37.50. Now EUR need to go down at least to 1.46. If this level is broken, next target is brown line - 1.41

EUR/USD 4 hours chart:
Here is "speculative" chart. Unfortunately not so speculative right now. Target is 1.46. There are also a bearish wedge (not shown), with target down to about 1.45-1.42 - never checked exact target, but wedge is there.

---

IV. GBP/JPY H&S:

GBP/JPY 1 week chart:
I usually do not trade GBP, even it is probably better than EUR.
However, now we see something interesting here:
Here we have huge H&S formation. Target is under 200.
In case you play this, note you will pay huge ammount of overnight interest every day to your broker.
Note GBP/JPY and EUR/JPY open with a gap, I will probably trade it.

---

V. Summary:

I can say absolutely the same as previous week:

Generally USD will rise now, EUR to fall, but play carefully.

Remember EUR is just a worthless paper as the USD is. Eurozone has own problems too. The only reason EUR go up against the USD is because Eurozone and ECB do not inflate as much as FED. Or may be they do now. Who knows. The inflation we see now, is actually from money supply increased 6 mo ago. So we do not know if ECB printing money or not.

>>> I will add that French president Sarkozy said "If USA want to debase their currency, we will respond".
We still not know what this response will be, but is easy to imagine what he means.
Note I respect Sarkozy for what he done for Bulgarian doctors in Lybia, but we will see.

There is only one real currency and is called GOLD. As you can see, gold rising against all currencies, not only against the USD. This may mean only one thing - inflation rising. Actually some people believes gold is bubble, but this is wrong opinion (will explain why I thing that some other time).

Happy week and trade!!!

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:

---

EUR/JPY:

---

AUD/JPY:

---

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)

Investment Flash: Hyper-Bearish

Investment Flash: Hyper-Bearish by Paul Lamont
http://www.safehaven.com/article-8486.htm
A strange article, I can not understand :)

AUD/JPY update

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

---

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

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 :-)

---

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.

---

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.

---

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!!!

---

III. Carry trade with AUD/JPY:

See the post here: AUD/JPY update

BOJ will raise rates?

BOJ will raise rates?