Thursday, March 18, 2010

Thursday morning thoughts.

Some people reading this blog are going to wonder what the heck I am doing somedays, like yesterday.  I have a bias towards a stronger dollar and weaker indices and so somedays, like yesterday, I am riding the ripples and not the waves.  One day those ripples will become the big wave but it wasn't yesterday.  That's trading.

EURUSD is still a range trade with a top at 138 and a base around 135.50.  If it breaks below 135 this time I think the rounded bottom is negated and I might try and hold it short for a re-test of the lows.
Sterling on the other hand looks set to rally and correct further.  EURGBP has broken down support and this will help.  Although I am short some sterling I think it will break up through the daily trendline and we will see a test of 157.30 before cable falls off again. 

Daily chart, weekly looks set to be a bearish engulfing. 
A good short entry would be a re-test of 90.00 if it gets back up there with a target of 88.50 / 88.30

Commodity currencies are all strong, CAD & NOK strongest, AUD weakest.  They are all grinding their way higher and pretty safe buys on pullbacks.

Of the continental currencies CHF is strongest against the dollar.  The only thing that makes me hesitate about trading it is looking at where EURCHF is.  I can't believe the SnB are happy about this and if they intervene then they don't always just buy EUR vs CHF, they buy USD vs CHF to leg into EUR also.  This inevitably gets you spiked out of your trade before it all goes back to where it was which is annoying.  Anyway I might be brave and take USDCHF if the dollar continues to rally.

Here is EURCHF monthly chart, right down there in the weeds heading for 143:

S&P is finally having a breather to let some more get on the northbound train.  Resistance becomes support at 1155 & 1147 and if it gets below that 1139 and 1124.50.  This is an hourly chart (because thats how hard you have to look for a pullback).

USDJPY is set to breakout of this wedge.  It is March when yens are repatriated so I would not buy this until end of next week but if it breaks short I like it.  4hrly chart:

The GBP/EUR/CHF JPY's all look bearish and set to breakdown too.  Here is EURJPY,  a break here lines up a retest of the lows (500 pips away).

GOLD and SILVER are mid range in a tightening triangle and too hard to call either way tonight.  Despite my holding a short (countertrend) it looks bullish and I expect a test of the upper line before the lower one.

CRUDE.  Crude is bullish but at strong resistance and should really pullback before you can buy it.  My efforts to short it have not been very succesful lately.

I also like AUDNZD short, GBPAUD long, AUDCHF is a nice counter-trend short from the top of the range (I guess I don't like AUD).  Also USDNOK short (if USD continues to fall off).

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