The Advisor Weblog

Majors’ perspective for U.S. session

Valeria Bednarik — Fri, 20 Nov 2009 14:34:53 +0000

Here is the hourly report, with charts for majors. Enjoy!

http://www.fxstreet.com/technical/analysis-reports/currency-majors-technical-perspective/2009-11-20.html

Gold bounces up

Valeria Bednarik — Fri, 20 Nov 2009 14:05:25 +0000

And dollar bounces down. EUR/USD is testing the 1.4850 area, unable to break lower, while GBP continues under heavy pressure and can’t regain the upside. I will wait for U.S. opening now, as seems the mood is a bit “violent” a this point.

I’m ignoring on purpose Japanese Yen: I can’t see it going nowhere, yet EUR/JPY is back on the daily 200 SMA in the daily, that has been offering strong support since past May. Seems is not going to be today, the breaking lower day, so maybe we are about to see some JPY depreciation against major rivals.

Anyway I will wait U.S. opening!

Best pair to trade now: AUD/USD

Valeria Bednarik — Fri, 20 Nov 2009 13:31:24 +0000

Here is my choice for today:

http://www.fxstreet.com/technical/forex-strategy/the-best-pair-to-trade-now/2009-11-20.html

Half an inch away

Valeria Bednarik — Fri, 20 Nov 2009 12:21:48 +0000

We are half an inch away of some panic profit taking in markets, with dollar winning across the board, even against Japanese Yen, Euro at 1.4810, Gbp 1.6450, Aud under 0.9100 and Swissy trying to break 1.0200. Stocks are down gold is down (that’s halting any attempt of appreciation for the Japanese currency) and we could see some rebounds from current levels. Watch gold: a break under $1130/oz, yesterday’s low, could well be the trigger market is waiting for.

AUD/USD testing daily trendline

Valeria Bednarik — Fri, 20 Nov 2009 11:56:41 +0000

Is not just gold; profit taking is hitting hard specially commodity currencies, and AUD/USD is the one suffering the most. Pair has hit a daily ascendant trend line at 0.9100 and remains close to it, and seems we are going to break it trough. We have quite a support at the very close 0.9080, so I suspect under that level, we may have a good number of stop losses, that if triggered, will send the pair quickly lower to the 0.9030 area. Resistances from current price, lie at 0.9120 0.9150 and 0.9200.

Pound falling big

Valeria Bednarik — Fri, 20 Nov 2009 11:25:50 +0000

Following yesterday’s comment, Pound extended the fall after being unable to overcome the Fibo level at 1.6840, and is testing right now the key 1.6520 support level. I see the 200 EMA in the 4 hours charts around 1.6490, so I would love to see some technical confirmation under 1.6480 before calling for further falls. Next supports come at 1.6440 and 1.6385. Resistances from here, lie at 1.6550, 1.6600 and 1.6640/60 strong zone.

Eur/Usd technical perspective

Valeria Bednarik — Fri, 20 Nov 2009 10:11:27 +0000

Bad news for my Euro falling theory: you know that Euro tend to strengthen at this time of the year, because is typically when European financial firms repatriate their overseas investments ahead of the year end? It is, so keep that in mind. Anyway, and taking a look at the 4 hours charts, pair is falling quickly in the last hour or so, supported by gold that is slightly negative today. Approaching to yesterday’s low at 1.4840 area, that’s our first support level for next hours, followed by strong 1.4800/10 level. Under that, pair has an ascendant daily trend line around 1.4750, so that’s the level to watch for longer term definitions. With flat indicators and under 20 SMA still with bearish slope, upside likely remain limited, with resistances today at 1.4890, 1.4930 and above the 1.4960/70 zone.

Deflation: next enemy

Valeria Bednarik — Fri, 20 Nov 2009 09:21:03 +0000

I have been talking about this a lot, I know, still i do believe will play a big role in currency markets. I went to Wikipedia to find a definition of deflation, and it says:” is a decrease in the general price level of goods and services Deflation occurs when the annual inflation rate falls below zero percent (a negative inflation rate), resulting in an increase in the real value of money - allowing one to buy more goods with the same amount of money”, and it also says “deflation is also linked with recession, and prevents monetary policy from stabilizing the economy because of a mechanism called the liquidity trap” (in two words, a liquidity trap is falling into a spiral that leads to monetary policy unable to stimulate the economy).

Anyway, deputy Prime Minister Naoto Kan said Friday that the Japanese economy has slipped into a state of deflation, putting BOJ under pressure to take country out of it. You can read the whole article following this link: http://mdn.mainichi.jp/mdnnews/news/20091120p2a00m0na015000c.html

But the unspoken word in Europe, should start to be taking into account: as reported by the Federal Statistical Office (Destatis), the index of producer prices for industrial products (domestic sales) for Germany fell by 7.6% in October 2009 from the corresponding month of the preceding year. In September 2009, the annual rate of change was -7.6% too.
Same data for euro zone show that in September 2009 compared with September 2008, industrial producer prices dropped by 7.7% in the euro area and by 7.3% in the EU27 (these figures come from Eurostat, the Statistical Office of the European Communities). I will stop here with stats not to make anyone crazy, yet we are at -7.6% and -7.7%.

I won’t be extending with any Keynesian theory of economics, I will just ask you, what should happen both with Euro and Japanese Yen?

Yesterday I was laughing alone at home as several news services where publishing a big banker from Saudi Arab was saying that is true American economy is in bad shape, but so are all the rest. Exactly the same i have been saying for the last 3 months.

Anyway, as I also say, we should trade what it is, and not what we think it should be. At current levels, and from a technical perspective, there is no signs of change in both Yen and Euro bullish trend. Although is too late to get into them, is still too early to go against.

Ok! enough philosophy for one morning! too early to think this, really! I will start now with the more humble intra-day technical views. Enjoy!

Majors’ sentiment for today:

Valeria Bednarik — Fri, 20 Nov 2009 08:39:36 +0000

Here is majors’ sentiment for today:

Eur/Usd: Neutral

Gbp/Usd: Bearish

Usd/Chf: Neutral

Usd/Jpy: Bearish

Eur/Gbp: Bullish

Starting the day

Valeria Bednarik — Fri, 20 Nov 2009 08:37:39 +0000

Hi everyone and welcome back to this blog. Majors are barely changed from past American session close, as well as gold, quoting where I left it at the beginning of Asia at $ 1144/oz. Yesterday’s strong risk aversion run triggered by stocks and commodities, had not enough strength to follow trough, particularly in European majors, as both stocks and commodities managed to bounce back. With no much macroeconomic data for today, but a couple of speeches, for CHF and EUR, seems market will again depend on stocks and gold to find a direction. Anyway, I will add more technical stuff today, as my younger girl don’t let me sleep (is 5 a.m. in Buenos Aires) and better do something useful if i’m up right? Here is the link for today’s calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

Have a great day!