Wednesday, April 28, 2010
It is very hard not to fall in love with the downside after a day like today, and the closes were very strong, it looks likely to continue but it is not a trend change yet ... yet. We are due for our sixth "Greece is saved" rally any time now.
The Nikkei is dropping tonight, having been closed before the fun started today. Normally the Nikkei falling is downward pressure on yen crosses and it is certainly holding back any bounce so far.
Gold was the star performer of the day at a new 2010 high. Every time the vix has risen hard and stocks have fallen hard Gold has gone up despite silver and all other commodities falling in line with the rising dollar.
Tomorrow is the FOMC statement where the market is looking to the Fed to remove the "lower for longer" language in anticipation of a rate hike sooner rather than later. If this language is removed signalling perhaps some tightening combined with uncertainty in other markets Gold could fall off from its perch.
AUD has broken the equal triangle / wedge to the downside and signals more losses to come. Today's fall took out three weeks of lower wicks!
AUD and NZD are very risk sensitive (both today fell further than the Euro in percentage terms) so much will depend on stocks and risk appetite. With USDJPY in a broad trading range and moving with risk appetite AUDJPY will follow AUDUSD. I am looking for price action in the 92.50 / 0.93 to perhaps sell again.
Same as AUD, I am selling rallies. The Kiwi looks set to test the bottom of a bearish rising channel. It is well supported by moving averages but a break below changes the game and sets up a retest of 68 and lower. I would sell a break of the low or look for a retracement to 0.7175-7190
I am tentatively short for a short term retracement trade but seeing where this goes. It was interesting this could not make a new high and USDCAD is normally my bellwether. I am watching to see what happens at the 50fib at 1.007 or the bottom of the wedge to see where we go next.
Cable is almost as disliked as the Euro with its big debts and prospects of a hung parliament but before todays big sell off the chart was bullish so we will see how the week ends. For now the descent was stopped at the trendline support and you either buy here off this trendline or you wait for price action at 1.5350 / 1.54 Fib cluster or perhaps 1.5411 breakout level to sell again.
After a 150pip move in one day it might have a quiet day tomorrow but I would not be surprised to see resistance off the old descending trendline and a continuation down to 1.31. I like the fib cluster at 1.3270/80 and I am looking for price action there to short.
I really like this one, its the inverse of EURUSD. If it gets that far I would look for price action to buy at 1.07 or 1.0650. If it doesn't stop there then we could go back to the rising daily trendline support.
I see this pair as on its way back lower in a descending channel / possible bullflag. I know the market is heavily long USDJPY but I am waiting for a drop to 90 area to buy. For now this pair trades with stocks ... I am looking at 93.70 for a turn lower again to the 0.9150 area.
The spread between US crude and Brent has just got much wider. US crude normally trades at a premium to Brent but this is reversed. The last few weeks has shown a big build in supply at Cushing and crude inventories are today. I am long for a retracement but looking to short again at 82.90/83 or 83.30