Wednesday, April 28, 2010

Focus Remains on Greece/Eurozone Developments - FOMC moving into focus for tonight

Briefing
The dollar eased back from early highs against the euro as the single currency managed a weak bounce off lows. Euro-dollar led the way higher with a mild rebound back through $1.3200, having touched a session low at $1.3144, although the gains were limited to $1.3218. The recovery seen as regional bourses moderated losses with comments from EU Von Rompuy suggesting negotiations with Greece were well on track and was convening a meeting on May 10.

Dollar-yen was trading at Y93.20, close to the middle of a fairly narrow Y93.00 to Y93.37 range and was seen shrugging off strong retail sales data, though base effects were said to have diluted the positivity.

Cable extended its corrective pullback to $1.5225 (NY low $1.5240) with recovery efforts in Asia holding well below $1.5300. Sterling was also seen a victim of the move away from risk.

The Aussie was boosted by release of strong CPI data, increasing speculation for another rate hike next month. Meanwhile, the Kiwi was firm, aided by a strong business confidence number.

Greece/eurozone developments remain in focus, with FOMC tonight moving into view.

Euro
Euro-dollar opened Asia around the NY session lows of $1.3166, the rate reeling in Tuesday's session on the back of S&P downgrades to Portugal and Greece. Rate came under fresh sell pressure into early Asian dealing, extending the pullback base to $1.3144, triggering an option barrier at $1.3150 in the process, as risk aversion carried over into this session. As equity markets moderated losses so the euro began to recover, the move up aided by today's meeting of the German parliament with the IMF with ECB Trichet in attendance (news was around Tuesday but excited Asia as viewed as an emergency meeting).

Rate initially edged into a $1.3165/85 range as market watched the GS proceedings. An FT article suggesting increased aid to Greece provided further upside pressure, along with reported comments from EU president Von Rompuy that he is convening a meeting on May 10. Euro-dollar pushed to $1.3218 before reported offers toward $1.3220 countered. Rate dropped to $1.3185/80 ahead of Europe, snapping back to $1.3215 as market reacted to Greek regulator banning short selling of Greek shares until June 28.

RES 4: $1.3725 Current top of Bollinger band
RES 3: $1.3692 High 12 Apr
RES 2: $1.3420/50 High 22 Apr, 21-day moving average
RES 1: $1.3275 5-day moving average

CURRENT LEVEL: $1.3206

SUP 1: $1.3147/55 Hourly lows, Base of the daily Bollinger band
SUP 2: $1.3128 50% projection level
SUP 3: $1.3096 Support line from 18 Feb
SUP 4: $1.3057 38.2% retracement of $0.8232 to $1.6039


Yen
Opened in early Europe around Y93.11 and Y122.90 Dollar-yen was heavy Tuesday as cross-yen sales weighed on the pair despite some very large buy orders going through. The pair traded down to Y92.81 in New York trade but has spent the Asian session consolidating ahead of the Y93.00 level with a range top at Y93.37. Traders note dollar-yen appears to be taking a breather before another leg lower.

Euro-yen had been under pressure in early Asian trade taking out the New York low and trading down to Y122.37. The dip was bought into as intra-day spec accounts looked to benefit from the recent volatility, the cross bounced and traded up to Y123.33 before more exiting longs came in and took the opportunity to exit. Traders note that the crosses are still very sensitive to any negative news out of the Eurozone and expect any rally to be used as an opportunity for stale longs to bail.

RES 4: Y95.05/09 High 24 Aug, Res line 7 Jan, high, 61.8% of 2009 decl
RES 3: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 2: Y94.37 High 26 April
RES 1: Y93.40/60 21, 5-day moving average

CURRENT LEVEL: Y93.13

SUP 1: Y92.98 Tenkan line of the Ichimoku cloud
SUP 2: Y92.65 Near-term 61.8% retracement
SUP 3: Y92.37 Minor support line 4 Mar
SUP 4: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar to 2 Apr rally


Cable
Cable finally gave way to the recent weak daily signals and slipped below the 21-day moving average, which turns initial resistance and risks a bear-cross with the 5-DMA at $1.5335/50. The close below here turns bear's focus towards Fibonacci retracements at $1.5163, $1.5078.

Euro-sterling daily studies remain weak after turning lower from within neutral territory. This still leaves bears pushing for a re-test of the stg0.8604 lows to maintain the falling channel in place from the start of March.

RES 4: $1.5620/30 50% of 2010 decline, 100-day moving average
RES 3: $1.5580/93 High 23 Feb, 38.2% of Nov/Mar move
RES 2: $1.5510/22 Bollinger band, High 15 Apr
RES 1: $1.5335/50 21, 5-day moving average

CURRENT LEVEL: $1.5272

SUP 1: $1.5227 Hourly low
SUP 2: $1.5163 50% retracement, Bollinger band
SUP 3: $1.5130 Low 6 Apr
SUP 4: $1.5078 61.8% retracement of April recovery 


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Tuesday, April 27, 2010

Markets Are Still Focusing on Developments in Greece

Briefing
Monday's late recovery tone in euro-dollar extended in early Asian dealing with the early market taking the rate from opening levels of $1.3385 to a high of $1.3417 as reported stops above $1.3420 attracted buyers.

Asian equity markets were pressured lower, led by the Shanghai Index which was trading off 2.4% by lunchtime as market reacted to talk of possible capital requirements on property developers, which in turn weighed back on euro-dollar. Strong sales of euro-dollar and euro-yen saw market move into a risk-off tone, taking euro-dollar back to $1.3364, while euro-yen squeezed down to Y125.34 from early highs of Y125.97.

Aussie-yen was sold lower by Japanese names despite release of better than forecast Australian PPI data, and a report in the Asahi press that Japanese Post will look to invest part of an investment portfolio of Y10tln overseas (though no time frame given). NZ Fonterra increased milk payments but slip in risk countered any positive Kiwi react.

Greece developments remain in focus. The BOK was also noted intervening to buy dollar-won earlier with expectation of euro-dollar demand later.

Euro
Opened Asia around $1.3385 with early demand continuing late NY's short squeeze, which had seen rate recover off a late Europe dip of $1.3299. Rate moved above $1.3400, meeting US investment and Nordic bank supply around $1.3405, but buy interest overwhelmed with reported stops above $1.3420 targeted. Sell interest ahead of this level capped move at $1.3417. The corrective pullback picked up momentum on risk aversion, prompted by losses in Asian equity markets, with a major French name a noted seller from around $1.3390.

Added sales in euro-yen squeezed rate to a low of $1.3364. Hedge fund demand ahead of $1.3360 provided a decent cushion, allowed rate to recover to $1.3385 ahead of the European open, easing back to challenge the overnight lows in early European dealing, extending the base to $1.3358 (50% $1.3399/1.3417). Rate currently trades around $1.3364. A break below $1.3358 to open a deeper move toward $1.3345/40 ahead of $1.3327 (76.4%). Resistance remains toward $1.3420, with stops reported above. Further stops above $1.3430. Offers then seen at $1.3450, with more stops on break.

RES 4: $1.3819 High 17 Mar
RES 3: $1.3705 Current top of Bollinger band
RES 2: $1.3692 High 12 Apr
RES 1: $1.3470 21-day moving average

CURRENT LEVEL: $1.3385

SUP 1: $1.3420 Base of the daily Bollinger band
SUP 2: $1.3201 Lows 22, 23 Apr
SUP 3: $1.3128 50% projection level
SUP 4: $1.3103 Minor support line from 18 Feb


Yen
The yen opened in early Europe around Y93.87 and Y125.59 vs the euro. Dollar-yen some decent flow going through in Asia both sides as Japanese exporters sold the pair down to Y93.73. Traders reported decent demand on the dip from a Trust Bank name speculating that the flow is related to the current round of Toushin launches, dollar-yen firmed as the bids soaked up the exporter supply and rallied to Y94.04 (the high) late in the Asian session.

Cross-yen was a little more volatile although again in a tightish range, euro-yen traded Y125.34-Y125.97 in Asia. The cross opened ahead of Y126.00 where offers at this level said to be for a mix of accounts but Japanese exporters included in those capped and the market pushed to the low Y125.34. With a lack of news and events the cross was confined to the range looking to the European session for some fresh impetus.

RES 4: Y95.09 61.8% retracement of 2009 decline
RES 3: Y95.05 Minor resistance line from Jan high. High 24 Aug 2009
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y94.37 High 26 April

CURRENT LEVEL: Y93.91

SUP 1: Y93.35/65 21, 5-day moving average
SUP 2: Y92.95 Tenkan line of the Ichimoku cloud
SUP 3: Y92.26 Minor support line 4 Mar
SUP 4: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar to 2 Apr rally


Cable
Cable continues to hold above the 21-day moving average, now at $1.5330 as daily studies sit in neutral territory. This level should continue to be in focus as bears seek a close below, which could turn focus towards Fibonacci retracements at $1.5163, $1.5078.

Euro-sterling daily studies remain weak after turning lower from within neutral territory. This still leaves bears pushing for a re-test of the stg0.8604 lows to maintain the falling channel in place from the start of March.

RES 4: $1.5645 100-day moving average
RES 3: $1.5620 50% of 2010 decline
RES 2: $1.5580/93 High 23 Feb, 38.2% of Nov/Mar move
RES 1: $1.5522 High 15 Apr, Bollinger band

CURRENT LEVEL: $1.5456

SUP 1: $1.5330 21-day moving average
SUP 2: $1.5163 50% retracement
SUP 3: $1.5130 Low 6 Apr
SUP 4: $1.5078 61.8% retracement of April recovery 


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Monday, April 26, 2010

Focus Remains on Greece Developments

Briefing
The dollar was mixed in Asia, marking modest gains against the yen on firmer yen crosses but remained almost flat on the euro.

Euro-dollar lost ground at the start of the morning's session with a German name selling from $1.3381 to a $1.3317 low, before bids from Japanese accounts then appeared, from $1.3320, and sparked a modest short-covering bounce to a $1.3398 high. Euro-dollar eased as offers at $1.3400 capped its rebound, and traded between $1.3365 and $1.3380 ahead of the European open, currently around $1.3372.

Dollar-yen ran into some early profit-taking interest at Y94.00 at the start of the day, although the retreat was limited to Y93.93. The pair marked a Y94.37 morning high, but was then limited by sell orders from corporate accounts spotted just ahead, from Y94.50 to Y94.80.

Sterling retained its recent buoyant tone through Asia, extending its recovery off Friday lows of $1.5295 to $1.5468, and holding just off highs into Europe.

It is a very light data calendar today with attention remaining on Greek developments. FOMC on Wednesday is the next major point of interest ahead of US GDP Friday.

Euro
Euro-dollar closed NY Friday at $1.3372, having traded to a recovery high late in that session of $1.3400 on optimism over the proposed Greek loan provision. Rate came under early downside pressure into Asian trade, a major German name linked to heavy sales that took the rate down to a session low of $1.3317 before running into suggested option related demand. One trader notes decent sized option maturities for today with strikes at $1.3325, $1.3300 and $1.3280, possibly linked to the demand interest. Spec shorts covered back, with the same German name a noted buyer as the rate edged back above $1.3340, gaining pace ahead of the Tokyo fix and topping out at $1.3398 before easing back to $1.3360.

The euro managed a quick recovery to $1.3380 ahead of the European open, but fresh sell interest quickly emerged to knock rate back to $1.3350 into the session. The euro currently trades around $1.3358. Offers are seen placed towards $1.3400, with talk of stops on a break of $1.3410. Mix of offers and stops noted at $1.3440, the sell interest said to extend to $1.3450. Support noted from around $1.3320 (Asia low $1.3317), through to $1.3280, with one trader noting stronger interest begins from below $1.3295. Stops noted on a break of $1.3280.



RES 4: $1.3819 High 17 Mar
RES 3: $1.3710 Current top of Bollinger band
RES 2: $1.3692 High 12 Apr
RES 1: $1.3475 21-day moving average

CURRENT LEVEL: $1.3367

SUP 1: $1.3201 Lows 22, 23 Apr
SUP 2: $1.3111/28 Minor support line from mid-Feb, 50% projection
SUP 3: $1.3054/57 Supp line from Feb 2002, 38.2% of $0.8232 to $1.6039
SUP 4: $1.3022 Projection calculation from Dec, Jan downmoves


Yen
It was a moderate session for yen overnight with dollar-yen opening initially off of Friday's high levels and trading down to Y93.85. The dip was bought into and dollar-yen traded up to Y94.37 on cross-yen demand. Traders are wary of the weekly Ichimoku cloudline at Y94.28 level and note that Friday was the first time the pair had traded above the weekly cloud since August 2007. Offers are said to be stacking up ahead of Y94.50 through to Y95.00 whilst bids are building around Y93.80 area.

Cross-yen tested higher once again overnight after initially trading down to Y125.30 as traders looked at the Greek rescue package with a slight negative view. Traders note a lack of detail on the deal and questioning whether or not this will resolve Greece's problems long-term adding to the euro's woes. The weakness was short lived and a spike above Friday's high to Y126.30 ensued, offers capped and the cross moved back sub Y126.00 to open Europe around Y125.89 level.



RES 4: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 3: Y95.04 Minor resistance line from Jan high
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y94.35 Hourly high

CURRENT LEVEL: Y94.22

SUP 1: Y93.30/60 21, 5-day moving average
SUP 2: Y92.95 Tenkan line of the Ichimoku cloud
SUP 3: Y92.15 Minor support line 4 Mar
SUP 4: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar to 2 Apr rally


Cable
Opened Asian trade around $1.5380 and was initially pressed back to lows of $1.5365 as rate tracked euro-dollar's early fall. However, sterling retained its recent underlying buoyant tone which allowed rate to rebound, the move back up aided by sterling-yen demand. Rate met resistance around $1.5440 before edging on to $1.5468 ahead of the European open. Rate has been pressured back to $1.5425 into early Europe, traders noting macro supply hitting the early market.

Traders make note that ongoing dividend linked demand from a UK oil company expected again today, with talk also that a UK clearer has similar interest for its dividend needs. Cable currently trades around $1.5445. Offers seen placed from around the overnight high at $1.5468 through to $1.5476 (April 22 high), with stops above $1.5480. A break here to open a move toward $1.5500/10 ahead of $1.5525. Support $1.5325/15.



RES 4: $1.5650 100-day moving average
RES 3: $1.5620 50% of 2010 decline
RES 2: $1.5580/93 High 23 Feb, 38.2% of Nov/Mar move
RES 1: $1.5522 High 15 Apr, Bollinger band

CURRENT LEVEL: $1.5432

SUP 1: $1.5310 21-day moving average
SUP 2: $1.5163 50% retracement
SUP 3: $1.5130 Low 6 Apr
SUP 4: $1.5078 61.8% retracement of April recovery

Friday, April 23, 2010

Euro Continues Getting Hit By Greece Concerns

Briefing
The dollar was mixed in Asia Friday, gaining on the euro but lower against the yen.

Euro-dollar ran into heavy selling pressure at the start of the session, hurt by renewed concerns about Greece. Euro-dollar sank below the overnight $1.3257 low, with German name sales providing the main weight to take the rate through the reported option barrier at $1.3250. Stops were triggered through this level, which took the rate to fresh lows doe the year of $1.3201, meeting further barrier protection ahead of $1.3200.

The euro has since has been penned in by $1.3205/40, trading around $1.3232 in early Europe.

Dollar-yen this morning has weakened marginally, as yen crosses declined in a "risk-off" environment. The pair traded down from a high of Y93.64 to Y93.31 and now ttrades around Y93.40 into Europe. Euro-yen was also trading heavy though off Thursday's lows of Y123.32, Asia contained by Y123.41/124.25, around Y123.58 into Europe.

Euro
Euro-dollar was already slipping back off a late NY recovery to $1.3320, having seen lows in the session of $1.3257, easing under $1.3300 into the Asian session before coming under strong sell interest from around the $1.3280 area. A major German was linked to pressing rate to an initial low of $1.3265, before another wave of strong sales took out the NY base, then the barrier at $1.3250. Stops were triggered below this level to take rate to $1.3228. Support didn't last long before sales from Japanese names and a US investment bank targeted the next barrier at $1.3200. Defence of this level cushioned the move at $1.3201, with the rate then settling back into a $1.3205/40 range, currently around $1.3235 into early Europe.

Option linked demand remains ahead of $1.3200, one trader noting barrier interest down to $1.2800. Below $1.3200 expectation of further demand toward $1.3190, a break here to expose main stops, which if triggered to take rate down to $1.3165/60 area ahead of $1.3140. Resistance $1.3240, stronger between $1.3255/65. A break here to allow for a move back toward $1.3320/25. Traders also report Asian sovereign demand interest seen in place between $1.3220/10. Barrier interest is also seen placed every 50 pips down to $1.3000, one trader reports.

RES 4: $1.3720 Current top of Bollinger band
RES 3: $1.3692 High 12 Apr
RES 2: $1.3470 21-day moving average
RES 1: $1.3360/80 5-DMA, Short-term channel top

CURRENT LEVEL: $1.3209

SUP 1: $1.3118/28 Minor support line from mid-Feb, 50% projection
SUP 2: $1.3057 38.2% of $0.8232 to $1.6039
SUP 3: $1.3022 Projection calculation from Dec, Jan downmoves
SUP 4: $1.2993 76.4% retracement of the post-Oct 2008, 61.8% projection


Yen
Opened in early Europe around Y93.38 and Y123.62 Another relatively quiet session for dollar-yen overnight trading a Y93.31-Y93.64 range. Despite the general risk off moves going on dollar-yen holds up well and is still trading in the all too familiar Y92.50-Y93.80 range. Talk demand for the Toushin launches one reason why dollar-yen holds up as well as a Moody's downgrade for a major Japanese car manufacturer.

Cross-yen has been consolidating overnight ahead of the Y123.15 support level, traders reporting stops starting to build below this level with very large stops said to be sub Y123.00 whilst offers at Y123.80 cap the topside. With all the problems in Greece investors are looking to exit any risk trades put on earlier in the week. After yesterdays choppy session traders expect similar today with any bad news expected to impact the cross-yen markets.

RES 4: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 3: Y95.02 Minor resistance line from Jan high
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y93.53/61 Minor res line from 2 Apr, High 22 Apr

CURRENT LEVEL: Y93.43

SUP 1: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar to 1 Apr rally
SUP 2: Y91.30 55, 200-day moving average
SUP 3: Y91.05 100-DMA
SUP 4: Y90.67/90 61.8% of 4 March rally, Top of the Ichimoku cloud


Cable
Recovery off fresh lows of $1.5315 extend to $1.5355 as traders note PM Brown to give a press conference following release of UK GDP data. This event sparks suggestions that the GDP could be on the better side of expectations. Rate currently trades around $1.5352. Offers seen at $1.5365, stronger toward $1.5380.

Bids seen placed toward $1.5300, with stops now seen placed on a break of $1.5290. Earlier talk suggested demand interest to be in place between $1.5290/80.

ES 4: $1.5620 50% of 2010 decline
RES 3: $1.5580/93 High 23 Feb, 38.2% of Nov/Mar move
RES 2: $1.5547 Former channel support, Bollinger band
RES 1: $1.5522 High 15 Apr

CURRENT LEVEL: $1.5366

SUP 1: $1.5280 21-day moving average
SUP 2: $1.5163 50% retracement
SUP 3: $1.5130 Low 6 Apr
SUP 4: $1.5078 61.8% retracement of April recovery

Thursday, April 22, 2010

Highlights: UK Retail Sales and Euro PMI

Briefing
The dollar was mixed in Asia Thursday, as weaker yen crosses dragged dollar-yen lower, although the dollar held firm on the euro.

Dollar-yen was last at Y92.85, having eased from early highs of Y93.19 (NY close). Euro-dollar is currently at $1.3398 in early European trade, after extending a tight Asian range of $1.3373/97 to $1.3401. Euro-yen wilted on a combination of weak euro sentiment and worsening risk appetite, with some traders highlighting an Asahi News article suggesting Japan could be close to an end to QE. This news weighed on the Nikkei, with knock on effects seen across other equity markets and adding to the risk-off tone.

Official activity seen again in local Asian currencies, which could prompt further euro-dollar demand on intraday dips. Sterling remains favoured, supported by ongoing dividend demand from a UK oil company expected during the day, with a UK clearer expected to have similar interest Monday for its dividend. Key resistance at $1.5446 is seen coming under pressure into early Europe. Stops are noted on a break of $1.5450, which if triggered to open a move on toward $1.5470/80. Talk suggests Asian sovereign sell interest to be seen at this latter level

Eurozone flash PMI's and UK retail sales provide this morning's highlights.

Euro
Euro-dollar opened Asia around $1.3392 and initially edged up to mark session highs at $1.3397 before meeting strong headwind sell pressure from early euro-yen sales. The rate was pressed back to $1.3373 before meeting support, the rate then gradually correcting higher through a mainly subdued session toward the early highs. Early Europe added further demand interest, probed for stops above $1.3400, taking the rate to $1.3403 but momentum quickly faded as rise quickly attracted sellers, profit taking as well as positioning ahead of stops said to lie at $1.3405/10.

The euro currently trades around $1.3395. Picking up talk of further sell interest placed between $1.3415/25, with further stops noted on a break of $1.3430. Further offers are also seen towards $1.3450 with more stops noted on a break of $1.3455. Support remains toward $1.3370, with option linked demand expected to emerge if the $1.3350 level seen threatened. Asian cenbank activity overnight in local currencies expected to produce demand from this sector into any dips, Asian sovereign names the main noted names that cushioned Wednesday easing at $1.3358. Stops below $1.3350, more through $1.3330.

RES 4: $1.3915/25 100-day moving average, 50% of 2010 range
RES 3: $1.3819 High 17 Mar
RES 2: $1.3680/92 Current top of Bollinger band, High 12 Apr
RES 1: $1.3485 21-day moving average

CURRENT LEVEL: $1.3390

SUP 1: $1.3350 Former resistance line 3 Dec
SUP 2: $1.3270/80/90 Low 25 Mar, 8 Apr, Bollinger band
SUP 3: $1.3246/50 Low 6 May, 50% projection level
SUP 4: $1.3057 38.2% of $0.8232 to $1.6039


Yen
Cross yen came under early sell pressure into Asian trade Thursday, with traders linking the move to a press report that the BOJ is likely to raise its growth and inflation forecasts in its outlook report next week. Japanese exporters led the selling, with Japanese trust banks also noted in the mix, taking euro-yen down from early highs of Y124.78 to Y124.05, with dollar-yen dragged lower from Y93.19 to Y92.74. Demand interest placed ahead of Y124.00 provided a cushion and allowed rate to recover back to the Y124.30/40 area. Dollar-yen was also trading off overnight lows into early Europe, currently trading around Y92.90.

Dollar-yen demand said to stretch from Y92.50 to Y92.20 expected to provide decent support, while main offers remain in place on approach to Y93.50 (NY high Weds Y93.45), though one trader suggests sell interest covers an area from Y93.30 through to Y93.80. Euro recovery efforts remain muted by the ongoing eurozone debt concern, primarily focused on Greece, with Portugal and Spain in the background, with traders looking to fade rallies. Euro-yen offers seen toward Y124.80, more at Y125.20/50.

RES 4: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 3: Y95.00 Minor resistance line from Jan high
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y93.34/56 Minor res line from 2 Apr, High 21 Apr, 61.8% retrace

CURRENT LEVEL: Y92.87

SUP 1: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar to 1 Apr rally
SUP 2: Y91.30 55, 200-day moving average
SUP 3: Y91.00 100-DMA
SUP 4: Y90.67/90 61.8% of 4 March rally, Top of the Ichimoku cloud


Cable
Cable opened Asia around $1.5415 and initially edged up to $1.5430, as early traders probed for stops above the NY recovery high at $1.5426. Rate slipped back to $1.5400 on cross yen sales, but strong underlying demand interest for sterling through straight cable (ongoing dividend linked demand by a UK oil company expected to be seen again Thursday, interest said to roll on to Tuesday, with traders also noting similar interest from UK clearer for Monday, as well as M&A Deutsche Bahn buying of UK Arriva approx stg1.5bln), as well as pressure on euro-sterling with the UK currency expected to be a major beneficiary of euro woes, as well as the mentioned M&A flow.

HSBC and GS have put out sell recs for the cross and seen adding weight. Cable recovered through the Asian session, pushing above Monday's high at $1.5435 and on to pressure the key $1.5445/50 area. Area held on first challenge, giving way on the second with triggered stops through $1.5455 taking it on to $1.5476. Asian sovereign sell interest has been suggested in place between $1.5470/80 though no reports received so far to confirm.

RES 4: $1.5620 50% of 2010 decline
RES 3: $1.5580/93 High 23 Feb, Bollinger band, 38.2% of Nov/Mar move
RES 2: $1.5522 High 15 Apr
RES 1: $1.5511 Former channel support

CURRENT LEVEL: $1.5431

SUP 1: $1.5365 5-day moving average
SUP 2: $1.5260 21-day moving average
SUP 3: $1.5163 50% retracement
SUP 4: $1.5130 Low 6 Apr

Wednesday, April 21, 2010

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Focus on UK Job Numbers and Greek Spreads



Briefing 

The dollar spent a fairly subdued Asian session holding steady against the yen and edging higher on the euro.
Dollar-yen was last trading at Y93.16, having traded a Y92.97/Y93.28 range in Asia almost flat from where it had ended in New York trade.

Euro-dollar was last at $1.3424, after a $1.3397/1.3466 overnight range, but down from where it had ended in New York around $1.3445.

The euro ran into renewed selling pressure, with some players initially taking aim at the overnight $1.3428 low and stop-losses said to be placed below $1.3420. Rumored sovereign demand at $1.3400 and larger buy orders in the $1.3390/85 region cushioned the downside, allowing the pair to inch its way back higher. Euro-yen provided some early downside pressure with strong sales noted into the Tokyo fix, which were said to be linked to French bond redemptions due early next week. The cross traded to a low of Y124.65, bouncing above Y125 into early European dealing.

Sterling has proved more resilient, cable edging back toward $1.5400 in early European trade.

Today sees a light data calendar with UK employment and BoE Minutes at 0830GMT being the highlights. Greek bond spreads also remain in focus.

Euro
Euro-dollar opened Asia around $1.3435, just off NY pressured lows of $1.3428. Rate initially edged up to mark session highs at $1.3446 before coming under strong headwind sell pressure via euro-yen sales. Talk of French bond redemptions into early next week cited as euro-yen was sold off, the move taking euro-dollar down to retest the NY low. The break below triggered stops that provided the added weight to take it down to initial lows of $1.3405. Move ran into Swiss name demand ahead of $1.3400, with some traders noting Asian sovereign demand interest into the dip.

Rate bounced back to $1.3425, settling for a while within $1.3415/25. Further sales in pre Europe open trade targeted stops below $1.3400, the rate touching a low of $1.3397 before profit take demand quickly emerged following the pressured move. Rate has since recovered to $1.3440, currently around $1.3435. Talk of Asian sovereign demand to be seen between $1.3400/1.3380, with minor stops mixed in from below the figure and extending down to $1.3370, larger below this latter level. Main offers seen up at $1.3480/00.



RES 4: $1.3925 50% of 2010 range
RES 3: $1.3819 High 17 Mar
RES 2: $1.3692 High 12 Apr, Current top of Bollinger band
RES 1: $1.3580 5, 21-day moving average

CURRENT LEVEL: $1.3415

SUP 1: $1.3368 Former resistance line 3 Dec
SUP 2: $1.3270/80 Low 25 Mar, 8 Apr, Bollinger band
SUP 3: $1.3246/50 Low 6 May, 50% projection level
SUP 4: $1.3057 38.2% of $0.8232 to $1.6039


Yen
The yen opened in early Europe around Y93.18 and Y124.89 vs the euro. Dollar-yen traded up to Y93.39 in New York last night taking out the stops placed between Y93.25-35 and then spent the Asian session in a Y92.97-Y93.28 range. Dollar-yen appears to have broken back into the recent range after taking out some stops sub Y92.50 over the last few sessions, exporters were noted sellers of dollar-yen on the rally and the crosses as they take advantage of the bounce. Also taking advantage of the bounce were retail investors who took the opportunity to book some profits in the crosses.

With all the selling dollar-yen dipped sub Y93.00 to Y92.97 however the dip was bought into and the pair recovered to Y93.20 area at the European open and onwards to Y93.28 during early European trade driven by cross-yen demand which looks set to continue, traders note offers around Y125.50 area in euro-yen with stops beyond Y125.70 level.



RES 4: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 3: Y94.99 Minor resistance line from Jan high
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y93.26 Minor resistance line from 2 Apr high

CURRENT LEVEL: Y93.19

SUP 1: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar rally
SUP 2: Y91.25/30 55, 200-day moving average
SUP 3: Y90.90 100-DMA
SUP 4: Y90.67 61.8% of 4 March rally, Top of the Ichimoku cloud


Cable
Opened Asia around $1.5365 and initially edged up to $1.5379, in line with euro-dollar, before reversing lower as move met strong cross yen sales. Rate pressed down to lows of $1.5332 but met willing buyers into the dip. Rate recovered, pushing up to session highs of $1.5386, extending on to $1.5413 into early Europe, as euro-sterling pressed down to stg0.8721. Cable currently trades around $1.5390. Sterling continues to enjoy risk demand interest, benefitting from concerns toward the euro.

Support seen in place between $1.5380/70, a break to open a deeper move toward $1.5350. One major Swiss bank in a morning note sees $1.5335 as a pivot. Offers seen place at the recovery high at $1.5413, with further interest positioned from around Tuesday's high of $1.5435, strengthening toward $1.5445/50. UK employment data and BOE Minutes due for release at 0830GMT.



RES 4: $1.5620 50% of 2010 decline
RES 3: $1.5580/93 High 23 Feb, Bollinger band, 38.2% of Nov/Mar move
RES 2: $1.5522 High 15 Apr
RES 1: $1.5375 5-day moving average

CURRENT LEVEL: $1.5367

SUP 1: $1.5235 21-day moving average
SUP 2: $1.5163 50% retracement
SUP 3: $1.5130 Low 6 Apr
SUP 4: $1.5078 61.8% retracement 

Tuesday, April 20, 2010

Dollar Trading Flat to Modestly Higher Against Majors

Briefing
The dollar is trading flat to modestly higher against the majors into early European trade Tuesday, llittle changed form late NYC levels against the euro and sterling, although has eked out modest gains against the yen.

Dollar-yen was last at Y92.60, the upper end of the session's narrow Y92.39/71 trading range as Goto-bi Day demand flows were seen at the fix. Flows overall though were described as muted, with traders reporting offers layered from Y92.75 to Y93.00.

Euro-dollar was last at $1.3470, just off the overnight lows of $1.3467, with players awaiting further concrete news out of Greece.

Sterling was little changed, with polls still pointing to a hung Parliament in the UK. Cable was under pressure in early Europe, breaking out of its overnight range of $1.5315/43, currently around $1.5307.

Euro
Euro-dollar opened Asia around $1.3485, just off NY high of $1.3488. Euro-yen Goto-bi Day demand into the Tokyo fix provided the rate with the lift to move above $1.3500, with traders noting a major Swiss name as prominent in the buying. Rate touched a high of $1.3502 before meeting decent supply from a US investment bank, denying pressure on reported stops above $1.3510. Release of hawkish RBA Minutes had provided risk with an early boost, only to be countered by reports that China could impose further curbs on the property market. Euro-dollar slipped back to $1.3466 before picking up fresh demand interest, edged back to $1.3485/90 ahead of the European open.

Early Europe sold into the recovery, easing the rate through the overnight pullback lows to $1.3457. Rate currently trades around $1.3460. Support seen in place around $1.3450 ($1.3449 61.8% $1.3416/1.3502), a break below to open a deeper move toward $1.3435/30 ahead of Mondays low at $1.3416. Resistance remains at $1.3500/10, with mentioned stops above. Further stops noted on a break of $1.3520/25.

RES 4: $1.3925 50% of 2010 range
RES 3: $1.3819 High 17 Mar
RES 2: $1.3692 High 12 Apr, Current top of Bollinger band
RES 1: $1.3535 5-day moving average

CURRENT LEVEL: $1.3484

SUP 1: $1.3416 Low 19 Apr
SUP 2: $1.3270/80 Low 25 Mar, 8 Apr, Bollinger band
SUP 3: $1.3246/50 Low 6 May, 50% projection level
SUP 4: $1.3057 38.2% of $0.8232 to $1.6039


Yen
The yen opened in early Europe around Y92.63 and Y124.89 vs the euro. Dollar-yen traded steadily higher in the US session and this continued into early Asian trade as the pair traded up to Y92.71. Traders note stops were triggered around the Y92.70 area and it reached this level on good buying for the Tokyo fix, traders also reported larger than usual fix demand as it was a "Goto-bi Day". Traders go on to note more stops around Y92.80 and Y93.00 on the downside talk of weak longs exiting on a move back through Y92.30 area.

Cross-yen was also trading higher overnight helped by risk on trade post the RBA minutes, however euro-yen stalled running into decent supply around the Y125.00 area as traders took the rally as an opportunity to sell and the cross moved lower to Y124.60 and lower still into the European open. Traders note that the risk off dips provide decent opportunity to sell yen as Japan still has very low rates and as of yet no sign of an exit strategy.

RES 4: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 3: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 2: Y93.20 Resistance line from 2 Apr high
RES 1: Y93.00 21-day moving average, Tenkan line

CURRENT LEVEL: Y92.64

SUP 1: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar rally
SUP 2: Y91.20/30 55, 200-day moving average
SUP 3: Y90.90 100-DMA, Top of the Ichimoku cloud
SUP 4: Y90.67 61.8% of 4 March rally


Cable
Opened Asia around $1.5335, having seen a recovery high of $1.5341 in late NY, off earlier European session lows of $1.5192. Rate initially pushed up to retest the NY high, extending the recovery topside to $1.5343 in early cross yen driven trade. Rate drifted lower after the Tokyo fix, which had seen Goto-bi Day linked demand, easing off to session lows of $1.5315. Rate recovered to $1.5330 ahead of the European open only for the rally to offer better short entry levels for early Europeans.

Rate was pressured through the overnight base to $1.5290, with recovery efforts so far remaining shallow. Bids are seen placed between $1.5290/85 ($1.5285 38.2% $1.5192/1.5343), with stronger interest noted from around $1.5265 to $1.5250. Resistance noted at $1.5330 ahead of $1.5340/50, with stronger interest seen at $1.5370/80. UK inflation data at 0830GMT the morning's highlight. Rate currently trades around $1.5295.

RES 4: $1.5620 50% of 2010 decline
RES 3: $1.5580/93 High 23 Feb, Bollinger band, 38.2% of Nov/Mar move
RES 2: $1.5522 High 15 Apr
RES 1: $1.5380 5-day moving average

CURRENT LEVEL: $1.5330

SUP 1: $1.5210 21-day moving average
SUP 2: $1.5163 50% retracement
SUP 3: $1.5130 Low 6 Apr
SUP 4: $1.5078 61.8% retracement

Wednesday, April 14, 2010

Risk Appetite Boosted By Intel Numbers

Briefing
The dollar was lower against the euro in Asian trade Wednesday though little changed against the yen, as Asian players took Tuesday's news of the successful Greek auctions as a big tick for the single currency.

Risk was given a further boost by the overnight release of strong Intel earnings, which in turn boosted equity markets into Asia. The strong release in Singapore growth data, with the resulting MAS adjustment to the NEER currency band, also allowed for a gradual appreciation in the Sgd.

Japanese and Korean stock markets opened in positive territory and prompted early demand for yen crosses, with the Aussie also making decent gains. Australian consumer confidence index retained a robust tone in the face of recent rate hikes, losing just 1-pt to 116.1.

The euro was last trading at $1.3650, just shy of the session high $1.3665, having ended the NYC session just below $1.3600. However, traders say flows have been light, with some sellers emerging ahead of the European session. Dollar-yen traded a tight Y93.17/35 range, with trade dictated by cross action.

Euro
Euro-dollar opened Asia around $1.3614, edged to $1.3617 before easing back to mark lows at $1.3603 before picking up fresh demand interest. Risk appetite into the Tokyo open was boosted as Japanese and Korean opened in positive territory, taking its lead from the strong earnings report from Intel overnight. A major Swiss name was cited for driving the rate up to $1.3640, as risk was further boosted by the release of strong Singaporean growth data which led to the MAS adjusting its NEER band, recentring and shifting to a modest and gradual appreciation of the Sgd. Euro-dollar continued to push higher, extending recovery to $1.3666.

Rate eased off highs but found support between $1.3650/45, currently around $1.3655. Asian traders have noted that the Swiss private bank was showing demand interest early on around the $1.3620 level. A break below here to open an easing back toward the overnight lows, with bids noted between $1.3605/00. Resistance $1.3666, a break above to open a move toward Monday's highs at $1.3692, with offers seen from here and extending toward $1.3700.

RES 4: $1.3912/25 Implied target, 50% of 2010 range
RES 3: $1.3819 High 17 Mar
RES 2: $1.3710 Current top of Bollinger band
RES 1: $1.3692 High 12 Apr

CURRENT LEVEL: $1.3650

SUP 1: $1.3499/05 Intraday gap, 21-day moving average
SUP 2: $1.3270/80 Low 25 Mar, 8 Apr
SUP 3: $1.3246/50 Low 6 May, 50% projection level
SUP 4: $1.3057 38.2% of $0.8232 to $1.6039


Yen
Opened in early Europe around Y93.24 and Y127.33 Dollar-yen had a relatively quiet session overnight trading Y93.16 - Y93.37 in Asian trade despite the general risk on theme to the session. News of the successful Greek auction helped investors confidence and this saw demand for cross-yen. Euro-yen managed to rally from Y126.78 to Y127.46 after yesterdays whippy trade saw stops taken out on both sides of the range.

However the cross once again stalled ahead of the Y127.50 area as some of the longs took profit, but this level finally gave way in early European trade as follow on buying took out the offers. Dollar-yen too pushed higher in early European trade taking out resistance at the Y93.40 area as the risk on theme continues. Better than expected GDP out of Singapore overnight helping to boost risk appetite.

RES 4: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 3: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 2: Y93.80 Tenkan line of the Ichimoku cloud
RES 1: Y93.15 5-day moving average

CURRENT LEVEL: Y93.24

SUP 1: Y92.55/57 21-day moving average, Low 13 Apr
SUP 2: Y92.23/27 38.2% of 4 Mar, Support line 4Mar,50% of 18 Mar rallies
SUP 3: Y91.35/45 200-day moving average, 50% of 4 March rally
SUP 4: Y90.95/00 Top of Ichimoku cloud, 55-day moving average


Cable
Opened Asia around $1.5380 and initially eased back to mark session lows at $1.5371 before picking up fresh demand as risk appetite received a boost, Asian equity markets opening firm following strong Intel earnings figures after the bell. Risk appetite gained a further boost as Singapore growth data beat all forecasts, prompting the MAS to recenter the Sgd in its NEER banding. Cable recovery moved above $1.5400, extending to $1.5427 in this session, with added demand into early Europe taking it on to $1.5440. Rate currently trades around $1.5425.

Cable offers now seen from around that failed high, with interest extending toward Tuesday highs at $1.5450, a break to open a move on toward $1.5460/65 ahead of Monday's high at $1.5486. Offers noted from this latter level, extending toward $1.5500. Support seen at $1.5405/395 ahead of $1.5375/70, with stronger interest remaining in place toward $1.5350.

RES 4: $1.5620 50% of 2010 decline
RES 3: $1.5580 High 23 Feb
RES 2: $1.5530 Current top of the daily Bollinger band
RES 1: $1.5486 High 12 Apr

CURRENT LEVEL: $1.5405

SUP 1: $1.5370 5-day moving average
SUP 2: $1.5180 21-day moving average
SUP 3: $1.5145 50% retracement (valid while $1.5486 remains the high)
SUP 4: $1.4820 Current base of the daily Bollinger band

Thursday, April 8, 2010

Euro Remains Under Pressure

Briefing
The euro remained under pressure through the Asian session Thursday, the single European currency still pressured by concerns over Greek debt but the downside still cushioned by reported Asian sovereign demand. Some suggest this demand is linked to a $1.33/1.36 option range play.

Euro-dollar squeezed to an extended low of $1.3314 (NY low $1.3326), then trading around $1.3326 into early Europe.

The Yen sees pressure on both sides, with Geithner's reported detour to China next week further sparking speculation of yuan appreciation, with the yen seeing proxy demand.

The Aussie was boosted overnight on the release of jobs data, coming in at the expected level but enough to prompt further demand.

UK Halifax housing data at 0800GMT, UK IP at 0830GMT followed by eurozone retail sales at 0900GMT provide the morning's highlights ahead of the BOE and ECB rate announcements at 1100/1145GMT. No change widely expected in both with 1230GMT comments from Trichet being the main interest.

Euro
Euro-dollar opened Asia at $1.3345 and managed to edge to $1.3348 to post session highs at $1.3348 before reversing lower on fresh euro-yen sales. Rate pushed through Wednesday's lows at $1.3326 to extend recent pullback to $1.3314, but move lower again was seen meeting decent Asian demand that cushioned the rate ahead of $1.3300. Continued talk suggesting that a $1.33/1.36 dnt option structure is in play and held by a major Asian sovereign.

However, with ongoing concern toward Greek debt, and yen demand seen as a proxy for speculated yuan appreciation via euro-yen, seen providing the main weight with a break of $1.3300 expected to allow for a quick dip down to $1.3270/65. Some reports suggest demand in place from the overnight low at $1.3314 through to $1.3250 with main stops below. Resistance noted at $1.3350, more from around $1.3370 through to $1.3420 with stops placed on a break of $1.3425, larger ones above $1.3450. Rate currently trades around $1.3330 into early Europe.

RES 4: $1.3800/19 Current top of Bollinger band, High 17 Mar
RES 3: $1.3650 55-day moving average
RES 2: $1.3591 High 1 Apr
RES 1: $1.3520/29 21-day moving average, Channel top 3 Dec

CURRENT LEVEL: $1.3328

SUP 1: $1.3270 Low 25 Mar
SUP 2: $1.3246/50 Low 6 May, 50% projection level
SUP 3: $1.3210 Current base of the daily Bollinger band
SUP 4: $1.3122 61.8% projection level


Yen
Euro-yen sales again provided the early lead into Asian trading, the move down from early posted session highs of Y124.59 taking the rate through the NY base at Y124.49 and on to lows of Y124.19. The euro still seen reeling on the back of Greek debt woes, with sales of euro-yen seen as yen demand seen as a proxy bet for speculated yuan appreciation. Dollar-yen was pulled down to an early low of Y93.17 (NY low Y93.15), the rate again seen meeting decent demand placed ahead of Y93.00 which cushioned.

Yen pairs were provided with a reprieve as Aussie-yen demand was prompted by the release of Aussie jobs data, confirming strong forecasts. A Japanese security house was a noted strong buyer of dollar-yen in the recovery, cited for taking the rate up to highs of Y93.45. Euro-yen has struggled to recover, with offers toward Y124.50 seen providing resistance, with stops below Y124.00 possibly seen as an enticing target. Downside stops in dollar-yen noted on a break of Y92.90 but importers likely to have further demand interest toward Y93.00 ahead with Y93.04 seen as their average rate for year end.

RES 4: Y97.52/79 76.4% retracement, High 7 August
RES 3: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y93.50 Tenkan line of the Ichimoku cloud

CURRENT LEVEL: Y93.22

SUP 1: Y92.86 38.2% retracement of 18 Mar advance
SUP 2: Y92.23/27 38.2% of 4 March and 50% of 18 March rallies
SUP 3: Y92.00 21-day moving average
SUP 4: Y91.40/67 200-day moving average, Support line 4 Mar


Cable
Close NY at $1.5248 and was on a downward track into early Asian trade Thursday. Sterling sales gathered pace as early market reacted to a Telegraph piece noting the BIS warning over UK debt. Rate pushed down to a session low of $1.5212 before meeting profit take demand into the dip. Further sales into early Europe has taken rate through $1.5200, extending the corrective pullback to $1.5176, currently trading around $1.5185.

Bid interest noted from around $1.5165, with interest extending to $1.5150, a break to allow for a deeper move toward $1.5130. Hearing in early Europe that stops are seen building in the area between $1.5130/25. Resistance $1.5220, more toward $1.5235. BOE rate decision today though no change expected. Ahead of this event we will see the release of Halifax house price data at 0800GMT and UK IP data at 0830GMT.

RES 4: $1.5420/22 61.8% of Feb/Mar decline, 38.2% of 2010 decline
RES 3: $1.5410 Current top of the daily Bollinger band
RES 2: $1.5382 High 17 Mar
RES 1: $1.5320 High 5 April

CURRENT LEVEL: $1.5225

SUP 1: $1.5125 21-day moving average
SUP 2: $1.4840 Current base of the daily Bollinger band
SUP 3: $1.4783/98 Recovery low 1 March, Low 25 Mar
SUP 4: $1.4619/59 Low 29 Apr, High 23 Feb

Wednesday, April 7, 2010

Ongoing Concerns Over Greece - IMF In Athens Today

Briefing
Ongoing concern over Greek sovereign debt, along with increased speculation that China is laying the groundwork for a yuan revaluation, continued to apply downside pressure on euro-yen into early Asian trade Wednesday, as the Japanese currency, seen as a proxy for the Chinese yuan, strengthened.

Risk-aversion also allowed the dollar to trade with a firmer tone, despite last night's FOMC Minutes tending to lean toward the dovish side.

This early tone in euro-yen reversed later in the session on reported demand for Aussie-yen, said to be linked to Sumitomo Chemical buying of a 20% stake in Australian Nufarm (A$611mln), taking the rate from lows of Y125.22 to Y126.16, trading around Y125.80 into early Europe.

Euro-dollar saw early highs of $1.3409 before being pressured to lows of $1.3371, while cable was trading soft, off Asian highs of $1.5277 (NY $1.5281) after the market reacted to weaker than expected BRC data.

Euro
Euro-dollar opened Asia around $1.3398, off NY lows of $1.3355 with recovery seen as market reacted to 'dovish' FOMC Minutes. Rate slipped back to early lows of $1.3373 as euro-yen came under early sell pressure, linked to ongoing concern over Greek debt and speculation that China is laying ground work for yuan appreciation. Rate recovered with euro-yen but ran into willing sellers positioned around $1.3390. Rate began to slip lower again in late Asia, the move down gathering pace as Europe added weight, the move down filling reported Swiss private bank demand in the area between $1.3370/65 before meeting stronger Asian demand placed between $1.3360/50.

Rate currently trades around $1.3366. A break of $1.3350 exposes further demand seen at $1.3345, with stops suggested on a break of $1.3340. Below here and rate can ease on toward $1.3325/20. Resistance remains at $1.3390/00, more toward $1.3410 with stops above. A break here to open a move toward $1.3440, with offers noted from here and extending toward $1.3460, with reports of stops mixed in on a break of $1.3452.

RES 4: $1.3925 50% retracement of Jan/Mar decline
RES 3: $1.3819/30 High 17 Mar, 9 Feb, Current top of Bollinger band
RES 2: $1.3591/10 High 1 Apr, 61.8% retracement of late March pullback
RES 1: $1.3540/47 21-day moving average, Channel top 3 Dec

CURRENT LEVEL: $1.3385

SUP 1: $1.3355 Low 6 April
SUP 2: $1.3270 Low 25 Mar
SUP 3: $1.3246/50 Low 6 May, 50% projection level
SUP 4: $1.3122 61.8% projection level


Yen
Risk aversion into early Asia, linked to ongoing concern toward Greek debt as well as speculation that China is laying ground work for yuan appreciation, acted to weigh on euro-yen to take it to session lows of Y125.22. Model sellers were noted selling as rate broke below Y125.40. Move dragged dollar-yen to early lows of Y93.56. Japanese assets managers were noted buyers into the dollar-yen dip, the demand able to lift rate back up to Y94.27.

Euro-yen tracked the recovery, aided by decent demand for Aussie-yen, with short covering taking it on to Y126.16. Dollar-yen seen holding back around Y94.00 into early Europe, while euro-yen trades around Y125.65 as the euro comes under early pressure into European trade. Dollar-yen support seen at Y93.50 with minor stops on a break of Y93.40. Resistance toward Y94.30 ahead of Y94.50.

RES 4: Y97.79 High 7 August
RES 3: Y97.52 76.4% retracement
RES 2: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 1: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April

CURRENT LEVEL: Y94.19

SUP 1: Y93.57 Low 6 April
SUP 2: Y93.20 Tenkan line of the Ichimoku cloud
SUP 3: Y91.90 21-day moving average
SUP 4: Y91.53 Support line 4 Mar, 200-day moving average


Cable
Opened Asia around $1.5262 and edged up to mark session highs at $1.5277 before reversing on general cross yen supply in early Asian dealing. Rate eased to a low of $1.5235. Rate recovered in line with yen crosses, faltering around $1.5265 before settling between $1.5240/60 ahead of the European open.

Rate came under stronger sell pressure into early Europe, as rate tracked euro-dollar slippage, extending the intraday lows to $1.5227 before settling back into a $1.5235/50 range. Rate currently trades around $1.5237. Support seen at $1.5225/20, more toward $1.5205, with demand interest said to be dotted down to $1.5190. Resistance $1.5250/55 ahead of $1.5270/80.

RES 4: $1.5420/22 61.8% of Feb/Mar decline, 38.2% of 2010 decline
RES 3: $1.5410 Current top of the daily Bollinger band
RES 2: $1.5382 High 17 Mar
RES 1: $1.5320 High 5 April

CURRENT LEVEL: $1.5259

SUP 1: $1.5110 21-day moving average
SUP 2: $1.4830 Current base of the daily Bollinger band
SUP 3: $1.4783/98 Recovery low 1 March, Low 25 Mar
SUP 4: $1.4619/59 Low 29 Apr, High 23 Feb

Ongoing Concerns Over Greece - IMF In Athens Today

Briefing
Ongoing concern over Greek sovereign debt, along with increased speculation that China is laying the groundwork for a yuan revaluation, continued to apply downside pressure on euro-yen into early Asian trade Wednesday, as the Japanese currency, seen as a proxy for the Chinese yuan, strengthened.

Risk-aversion also allowed the dollar to trade with a firmer tone, despite last night's FOMC Minutes tending to lean toward the dovish side.

This early tone in euro-yen reversed later in the session on reported demand for Aussie-yen, said to be linked to Sumitomo Chemical buying of a 20% stake in Australian Nufarm (A$611mln), taking the rate from lows of Y125.22 to Y126.16, trading around Y125.80 into early Europe.

Euro-dollar saw early highs of $1.3409 before being pressured to lows of $1.3371, while cable was trading soft, off Asian highs of $1.5277 (NY $1.5281) after the market reacted to weaker than expected BRC data.

Euro
Euro-dollar opened Asia around $1.3398, off NY lows of $1.3355 with recovery seen as market reacted to 'dovish' FOMC Minutes. Rate slipped back to early lows of $1.3373 as euro-yen came under early sell pressure, linked to ongoing concern over Greek debt and speculation that China is laying ground work for yuan appreciation. Rate recovered with euro-yen but ran into willing sellers positioned around $1.3390. Rate began to slip lower again in late Asia, the move down gathering pace as Europe added weight, the move down filling reported Swiss private bank demand in the area between $1.3370/65 before meeting stronger Asian demand placed between $1.3360/50.

Rate currently trades around $1.3366. A break of $1.3350 exposes further demand seen at $1.3345, with stops suggested on a break of $1.3340. Below here and rate can ease on toward $1.3325/20. Resistance remains at $1.3390/00, more toward $1.3410 with stops above. A break here to open a move toward $1.3440, with offers noted from here and extending toward $1.3460, with reports of stops mixed in on a break of $1.3452.

RES 4: $1.3925 50% retracement of Jan/Mar decline
RES 3: $1.3819/30 High 17 Mar, 9 Feb, Current top of Bollinger band
RES 2: $1.3591/10 High 1 Apr, 61.8% retracement of late March pullback
RES 1: $1.3540/47 21-day moving average, Channel top 3 Dec

CURRENT LEVEL: $1.3385

SUP 1: $1.3355 Low 6 April
SUP 2: $1.3270 Low 25 Mar
SUP 3: $1.3246/50 Low 6 May, 50% projection level
SUP 4: $1.3122 61.8% projection level


Yen
Risk aversion into early Asia, linked to ongoing concern toward Greek debt as well as speculation that China is laying ground work for yuan appreciation, acted to weigh on euro-yen to take it to session lows of Y125.22. Model sellers were noted selling as rate broke below Y125.40. Move dragged dollar-yen to early lows of Y93.56. Japanese assets managers were noted buyers into the dollar-yen dip, the demand able to lift rate back up to Y94.27.

Euro-yen tracked the recovery, aided by decent demand for Aussie-yen, with short covering taking it on to Y126.16. Dollar-yen seen holding back around Y94.00 into early Europe, while euro-yen trades around Y125.65 as the euro comes under early pressure into European trade. Dollar-yen support seen at Y93.50 with minor stops on a break of Y93.40. Resistance toward Y94.30 ahead of Y94.50.

RES 4: Y97.79 High 7 August
RES 3: Y97.52 76.4% retracement
RES 2: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 1: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April

CURRENT LEVEL: Y94.19

SUP 1: Y93.57 Low 6 April
SUP 2: Y93.20 Tenkan line of the Ichimoku cloud
SUP 3: Y91.90 21-day moving average
SUP 4: Y91.53 Support line 4 Mar, 200-day moving average


Cable
Opened Asia around $1.5262 and edged up to mark session highs at $1.5277 before reversing on general cross yen supply in early Asian dealing. Rate eased to a low of $1.5235. Rate recovered in line with yen crosses, faltering around $1.5265 before settling between $1.5240/60 ahead of the European open.

Rate came under stronger sell pressure into early Europe, as rate tracked euro-dollar slippage, extending the intraday lows to $1.5227 before settling back into a $1.5235/50 range. Rate currently trades around $1.5237. Support seen at $1.5225/20, more toward $1.5205, with demand interest said to be dotted down to $1.5190. Resistance $1.5250/55 ahead of $1.5270/80.

RES 4: $1.5420/22 61.8% of Feb/Mar decline, 38.2% of 2010 decline
RES 3: $1.5410 Current top of the daily Bollinger band
RES 2: $1.5382 High 17 Mar
RES 1: $1.5320 High 5 April

CURRENT LEVEL: $1.5259

SUP 1: $1.5110 21-day moving average
SUP 2: $1.4830 Current base of the daily Bollinger band
SUP 3: $1.4783/98 Recovery low 1 March, Low 25 Mar
SUP 4: $1.4619/59 Low 29 Apr, High 23 Feb

RBA Hikes Rates with 25 bps to 4.25%

Briefing
The RBA hiked rates 25 bps to 4.25% adding that it was appropriate for rates to rise closer to average and the Aussie bounced to $0.9231, having earlier in the session been pressuring reported stops sub $0.9160, registering a low of $0.9165.

The reaction to the rate move also saw Aussie-Kiwi post fresh 9-year highs of NZ$1.3130 (NZ$1.3152 Nov14 2000).

Risk aversion was the main play during the overnight session, with strong sales of euro-yen from Japanese exporters leading a move into yen and dollar. This triggered stops through Y94.00, which took dollar-yen to lows of Y93.89, while euro-dollar was pressured to lows of $1.3414, from earlier highs of $1.3497, with negative reports on Greece, including an MNI story providing the main weight.

Greek government sources tell us that the Greek government wants to amend the aid accord to bypass the IMF. The government fears that tough conditions imposed by the IMF could cause social unrest. The sources said there is "a strong chance" Greece will have to request aid, despite recent avowals of self-sufficiency. The Greek government wants a clearer, speedier, European aid plan with more lenient conditions for triggering aid.

Euro
Euro-dollar opened Asia around $1.3485, having eased off Monday's US highs of $1.3529. Rate initially edged up to mark session highs at $1.3497 before reversing lower as strong euro-yen sales from Japanese exporters weighed. Negative news surrounding Greek debt problems also sapped risk appetite and pushed the euro lower.

The break below $1.3450 ($1.3461 NY low Monday) provided the impetus to take rate to lows of $1.3414. The hike in Australian interest rates provided some respite from risk aversion trades, allowing rate to edge back to $1.3435, but move has only presented bears with better levels to sell, with rate currently trading around $1.3420. Bids $1.3415/00, $1.3380. Offers $1.3435, $1.3450/60.

RES 4: $1.3925 50% retracement of Jan/Mar decline
RES 3: $1.3819/30 High 17 Mar, 9 Feb, Current top of Bollinger band
RES 2: $1.3591/10 High 1 Apr, 61.8% retracement of late March pullback
RES 1: $1.3550/65 21-day moving average, Channel top 3 Dec

CURRENT LEVEL: $1.3421

SUP 1: $1.3393 61.8% retracement level
SUP 2: $1.3385 Low 31 Mar
SUP 3: $1.3246/50/70 Low 6 May, 50% projection, Low 25 Mar
SUP 4: $1.3122 61.8% projection level


Yen
Dollar-yen faced strong selling pressure via Japanese exporter sales of euro-yen during overnight trade in Asia, with traders seeking to take profit on dollar-yen's rise to Y94.52 overnight in the U.S. The rise in risk aversion weighed, sparked by renewed concern over Greece, taking dollar-yen to lows of Y93.89, after opening near session highs of Y94.38, while euro-yen was sold down to Y126.05, having seen early highs of Y127.35.

The decline however failed to trigger stop-loss orders cited around Y93.90/85, and that gave way to some short-covering, which allowed dollar-yen to stabilize around Y94.20 ahead of the european open, but again seen under pressure into early Europe, currently resting on Y94.00. Euro-yen currently trades around Y126.25/30. Most yen crosses were also trading lower, with Aussie-yen getting a late lift after the RBA hiked rates.

RES 4: Y97.79 High 7 August
RES 3: Y97.52 76.4% retracement
RES 2: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 1: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April

CURRENT LEVEL: Y93.96

SUP 1: Y93.90 5-day moving average
SUP 2: Y92.55 Tenkan line of the Ichimoku cloud
SUP 3: Y91.75 21-day moving average
SUP 4: Y91.39 Support line 4 Mar, 200-day moving average


Cable
Opened Asia around $1.5297 and initially edged up to mark session highs at $1.5307. Pressure on the euro from negative reports on Greece, along with general yen demand, worked to pressure cable lower, the rate easing to initial lows around $1.5225 before pressing on to $1.5212 in late Asian dealing.

Rate recovered to $1.5235 as the Australian rate hike provided some respite to the general risk aversion moves, but move provided better levels to sell and eased rate back to retest the overnight lows. Rate currently trades around $1.5230. Resistance seen at $1.5235, more toward $1.5250. Support $1.5212 through to $1.5200 ahead of stronger interest toward $1.5180.

RES 4: $1.5420/22 61.8% of Feb/Mar decline, 38.2% of 2010 decline
RES 3: $1.5400 Current top of the daily Bollinger band
RES 2: $1.5382 High 17 Mar
RES 1: $1.5320 High 5 April

CURRENT LEVEL: $1.5214

SUP 1: $1.5100 21-day moving average
SUP 2: $1.4820 Current base of the daily Bollinger band
SUP 3: $1.4783/98 Recovery low 1 March, Low 25 Mar
SUP 4: $1.4619/59 Low 29 Apr, High 23 Feb

Thursday, April 1, 2010

Dollar Hits Three Month High Against Yen

Briefing
The dollar traded firmer in Asia Wednesday, hitting a three-month high against the yen. The euro slid back below $1.3400 while dollar-yen jumped above Y93.00.

Dollar-yen broke through last night's Y93.02 high, after opening in Asia around Y92.76, triggering large stop-loss orders at Y93.10, dealers said. The pair then struck a new 3-month high of Y93.60 as fixing demand (stronger US yields) and strong yen crosses pushed the pair along. With year-end trade completed Tuesday. Traders said there was little ahead of offers at Y93.75 and Y94.00.

Euro-dollar, meanwhile, eased back this morning, as risk sentiment faded and attention appears turned toward Ireland with Greece currently now on the back burner, though still potentially influential. The pair made a brief rise to $1.3438 before specs slammed it back to $1.3405, easing to an eventual low of $1.3384. Rate currently trades around $1.3410.

Release of disappointing Australian retail sales and buildings approvals have pared rate hike expectations, and weighed against the Aussie as month end fixings move into focus.

Euro
Euro-dollar opened Asia around $1.3416, off Tuesday's lows at $1.3395, and edged up to mark session highs at $1.3438 on early demand for euro-yen, with talk around, from the US session, of sovereign demand interest placed below the figure. This early recovery proved short lived as the release of disappointing Australian retail sales and building approvals weighed back on the Aussie, as traders pared back rate hike expectations, with rate dropping back to $1.3405 before breaking under the figure to post lows at $1.3384 ahead of the European open.

Move down seen mainly cross driven, with continued talk of sovereign demand providing a cushion. Rate recovered back above $1.3400 into early Europe, touching a recovery high at $1.3410/15 before pivoting back around the figure. Rate currently trades around $1.3405. Rate seen in balance with Irish bank woes/IMF cutting German GDP forecasts for this year, as well as IMF comments on Italy's deficit weighing, but meeting the reported sovereign demand as well as expected interested to buy euro-dollar at today's end month fixings.

RES 4: $1.3819 High 17 Mar
RES 3: $1.3610/37 61.8% retracement, Channel top 3 Dec
RES 2: $1.3575 21-day moving average
RES 1: $1.3535/45 High 30 Mar, 50% retracement of decline from 17 March

CURRENT LEVEL: $1.3406

SUP 1: $1.3385 Hourly low
SUP 2: $1.3246/50/70 Low 6 May, 50% projection, Low 25 Mar
SUP 3: $1.3122 61.8% projection level
SUP 4: $1.3057 38.2% of $0.8232 to $1.6039


Yen
Opened in early Europe around Y93.23 and Y125.02 Dollar-yen broke through last Tuesday's Y93.02 high after opening in Asia around Y92.76, triggering large stop-loss buy orders at Y93.10, dealers said. The pair then struck a new of Y93.60 stalling ahead of Y93.75 the years high seen on 7th January as fixing demand and strong yen crosses pushed the pair along.

With year-end trade completed Tuesday, traders said there was little ahead of offers at Y94.00 and went on to note there is ongoing Japanese investor demand as the new financial year brings fresh investment from Japanese accounts. Cross-yen also rallied in Asian trade with euro-yen retesting the Y125.50 area and again failing as the cross pulls back to Y124.90 level just ahead of the European open. Traders note the market is fixated with the Y125.50 level and this area is said to hold the key to unlocking more gains in the cross.

RES 4: Y94.72 76.4% retracement of Aug/Nov decline
RES 3: Y94.08 Triangle implied target
RES 2: Y93.78 High 7 Jan
RES 1: Y93.66 61.8% of Nov/Jan projection

CURRENT LEVEL: Y93.36

SUP 1: Y92.70 5-day moving average
SUP 2: Y91.40/45 Tenkan line, 200-day moving average
SUP 3: Y91.05 Top of the Ichimoku cloud
SUP 4: Y90.60/82 21-DMA, Support line 4 Mar, Base & Kijun line


Cable
Cable is pressuring the 21-day moving average at $1.5065 as the daily stochastic study sits on the verge of a bull-cross. A break and close over here would improve recovery hopes, although momentum remains in negative territory and while Tuesday's rally pushed over the 50% retracement level, further Fibonacci resistance is nearby at $1.5159.

Euro-sterling slips below the 100-day moving average at stg0.8916 but now faces MA and Fibonacci support to stg0.8850 as daily studies seek a near-term base.

RES 4: $1.5382 High 17 Mar
RES 3: $1.5300 Current top of the daily Bollinger band
RES 2: $1.5244 76.4% retracement
RES 1: $1.5128/59 High 30 Mar,61.8% retracement of 17 Mar decline

CURRENT LEVEL: $1.5086

SUP 1: $1.4980 5-day moving average
SUP 2: $1.4820 Current base of the daily Bollinger band
SUP 3: $1.4783/98 Recovery low 1 March, Low 25 Mar
SUP 4: $1.4619/59 Low 29 Apr, High 23 Feb


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