 Market
Talk Daily Forcast
by
Dale J Pinkert
Thursday Apr 22nd 2010
Greek debt news rattled the Equity and FX markets early in the U.S. session
and as the S&P shrugged it off FX markets recovered as well though settling
lower on the day with stand-out weakness in EURUSD.
From today's lows we expect a 2 to 4 day rally in FX which could take the GBPUSD
towards 1.56 to set up shorts for the next move under 1.50 into the UK elections
May 6th.
After this expected bounce in most pairs with the USD we expect a sharp thrust
up in the DXY (Dollar Index) towards the 84-85 zone so long dollar positions
is how we plan to position ourselves next week including buying into potential
new lows in USDCAD and shorting strength on the AUDUSD.
This burst or thrust expected will finally take the EURUSD to it's long touted
1.3100 objective.
The USDJPY completed a shallow setback of 70 pips and now has destiny to challenge
recent highs of 94.70 with our longstanding target of 95.50 still viable.
Wednesday Apr 21st 2010
As mentioned yesterday the USDCAD made a new low and as forecast it was short
lived at .9929 cleaning out stops under .9957 then reversing sharply maintaining
the integrity of the hourly and daily momentum divergences, now posting a reversal
day and trading back above 1.00. We also noted that although USDCAD was pressing
new lows that the AUDUSD was still tading 50 pips under it's high of last Sunday
evening of .9383 setting up a failing rally to be sold into, now trading .9266
50 pips lower on the day.
The USDJPY is ripe for a break back to 92.50 and hourly divergences, plus a
reversal day to the downside increase our confidence in the aforementioned scenario.
The GBPUSD is still displaying relative strength compared to EURUSD and still
may be seeking the 1.56 level. We also are coming to the conclusion that the
EURUSD could surprise to the upside towards 1.3750 to 1.3800 just too many bears
growling!
Tuesday Apr 20th 2010
The EURUSD displayed relative weakness compared to GBPUSD today making it more
vulnerable to downside surprises, we remain neutral as of this writing.
The USDCAD broke viciously and although we called for a wave 2 pullback it
was deeper and impulsive so new lows under .9957 would not surprise us now and
would set up yet another momentum divergence.
The USDJPY kept marching along already 180 pips off of our identified weekly
support at 91.50 and the case continues to build for a 95.50 upside objective.
The AUDUSD is still 70 pips under last weeks high of .9383 and we still give
the downside priority for shorting opportunities.
Monday Apr 19th 2010
Following last Sunday night's gap lower opening we experienced gap lower openings
last evening leaving most pairs fighting their way back to recover from opening
losses.
We tip our hat to the USDJPY as being the most dynamic, rebounding sharply
from previously forecast weekly support at 91.50 to close at 92.40 we favor
buying setbacks with a belief that USDJPY still may have destiny at 95.00 to
95.50.
USDCAD has begun to correct our identified bottom at .9950 ish and is a buy
on fib retracement pullback for wave two.
The inverse holds true for AUDUSD as we look for failing rally's around .9270-80.
Since GBPUSD had the most dramatic gap lower opening of 100 pips we view it
may be a likely shorting candidate against 1.5420 should that level be penetrated
GBPUSD 1.56 becomes likely.
We are neutral EURUSD going home tonight.
Friday Apr 16th 2010
The call for a major low in USDCAD was fulfilled in all time frames, hourly,
daily and the icing on the cake weekly! This signal is a weekly key reversal
as we took out last weeks low early in the week and last weeks high today. In
candlestick terms this is a bullish engulfing candle.
The AUDUSD gave up the ghost today as well, but not to the same degree, so
as USDCAD outperformed to the downside compared to the upside of AUDUSD so it
will lead in relative strength to the upside, it is the leader!
The USDJPY did nothing right again this week and looks destined for 91.50.
Cable is showing decent relative strength compared to EURUSD and should the
USD next week give back some of it's bid then GBPUSD would be the favored pair
over EURUSD for long side scalps.
Thursday Apr 15th 2010
Our forecast for a major low and Buying opportunity in the USDCAD at .9940
came close enough for government work yesterday at .9953 with momentum divergences
confirmed on both hourly and daily charts. The last piece of evidence needed
to declare the low is a weekly reversal to the upside and we are only a stones
throw away.
The AUDUSD put in a lower high as USDCAD was making lower lows. As of writing,
we are short from yesterday with buy stops at BE at..9354.
The EURUSD also is under pressure today as it eats into Sunday night's breakaway
gap and if filled then becomes a sign of exhaustion.
The USDJPY though range-bound, our bias is to look for long entries, with the
belief that 95.50 is still a viable objective.
Monday Apr 12th 2010
Today's price action is a classic study in two types of gaps, a potential breakaway
gap in the EURUSD and possible exhaustion gaps in GBPUSD & AUDUSD.
The EURUSD had the most powerful gap and as of this writing has failed to close
it. We can interpret this as a breakaway gap occurring closer to an initiation
of the move which began last Thursday at 1.3280 ish. This gap implies that we
are only half way through this move to the upside from Friday's close which
will target 1.3710 as minimum objective as long as the gap at 1.3490 remains
unfilled.
The GBPUSD gaped up, but failed to follow through closing the gap and trading
just slightly higher on the day a sign of exhaustion for this pair.
The biggest giveback occurred in the AUDUSD which had the smallest gap of the
three pairs mentioned here, it then preceded to fill it and not only continue
lower on the day, but actually challenged the previous day's low. This signal
at the very least happening near the tail end of this bull run smacks of exhaustion
with the potential for both daily key and weekly key reversals to the downside.
We are looking to sell into strength around .9320-30 with .8500 as intermediate
term targets.
The USDJPY held Thursday's low, but we still expect 92.50 to be achieved to
the downside and then one more push towards 95.50 Also mentioned last week,
as the AUDUSD pushed to successive new highs the USDCAD has held previous lows
a bullish tell potentially.
Tuesday Apr 6th 2010
The AUDUSD achieved our objective of .9280 cited weeks ago, we are now alert
for topping action as the burning question is can this run extend to .9400 to
clear out the last long term bear in this pair.
The EURUSD traded close to the golden ratio of 78.6 back from it's 320 pip
recovery going into the the NFP last Friday and we still have conviction a higher
low is at hand above 1.3266.
Today's low of 1.3355 may have been it or just a shade underneath is also possible
with 1.3670 upside target if equal to last rally phase or 1.3880 if the1.618
money wave takes place.
GBPUSD still outperforming EURUSD on the upside and the USDJPY is finally beginning
to show cracks in momentum so we are alert for a major shorting opportunity
with long term objectives under 84.00
April 1st 2010
Dollar weakness persisting today builds the case that this multi-week correction
to the downside in the USD has commenced.
One potential trading scenario that could set up on a strong jobs number (NFP)
tomorrow in the U.S. is a bout of dollar strength on the number correcting the
gains in the EURUSD potentially back to 1.3434 a number where the vultures cleaned
out stops and a fib retrace from the EURUSD's 300 pip rally from last Friday's
low of 1.3266.
A higher low could then set the stage for a move back to 1.38-40 going into
late May. stay tuned.....
We've noticed more chatter about a number we bandied about in the AUDUSD at
.9288 and believe this level to be a major shorting opportunity.
USDCAD has set it's sites on parity and most likely trades above it before a
major low become a reality.
Despite the power and strength of the upside move in the USDJPY our monthly
charts open us to the potential of a short with at the minimum a sizable pullback
and potentially a target of 80.00
long term. We believe holding positions prior to big numbers like tomorrows
is roulette, a black or red bet. We prefer to speculate not gamble!
March 31st
After today's bout of Dollar weakness the scenario of one more push up in the
DXY to 82.80-83.10 looks less likely and we have to be open to the possibility
that a multi-week correction in the USD to the downside is underway.
The rubber will meet the road after Friday's NFP number although expectations
were dampened a bit by today's ADP report showing job losses not gains. You
may ask why we are flipping here. I can answer that by first noting we did not
short the EURUSD based upon yesterdays commentary. The setup changed exceeding
fib retracement zones. It also showed no weakness by only retracing 13 pips
and did not return to the central pivot.
Also a market wizard W.D. Gann once said "if you don't learn how to change
your mind you won't have any change left" There are times, usually during
an interruption or transition from the dominant trend when things get murky.
It's sometimes appropriate to say "I don't know" or "I'm neutral"
when a trade or forecast doesn't pan out. Sometimes the best trade is no trade.
During these environments tread lightly with the confidence that the fog will
lift and conviction will return. Being flat the market can be a great strategy
for detaching and seeing the forest from the trees and this is how we are positioned
for now.
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