Friday, January 13, 2012
Tuesday, January 10, 2012
FOREX: Dollar Weakness to Continue, Merkel / Lagarde Meeting on Tap
The US Dollar (ticker: USDollar) traded broadly lower in overnight trade, down as much as 0.3 percent on average against its leading counterparts, as gains on Asian stock exchanges sapped demand for the safe-haven currency. The MSCI Asia Pacific regional equity benchmark index rose 1.1 percent after US Consumer Credit rose to $20.4 billion – the highest in at least 4 years – while Chinese Imports grew at the slowest pace in 26 months. The former release suggested demand was picking up in Asia’s go-to export market while the latter hinted Beijing may press forward with additional reserve ratio requirement cuts after reducing the rate to 21 percent in December. Not surprisingly, the stocks-correlated Australian, New Zealand and Canadian Dollars outperformed.
Looking ahead, the economic calendar is quiet in European hours. Greece will sell €1.25B in 182-day bills, but the short tenor of the securities on offer and the already well-established predicament facing Athens at least over the near term is likely to keep the outcome from being particularly market-moving. Indeed, Eurozone debt crisis have been focused on larger economies (Spain, Italy and to some extent France) too big to be bailed with existing rescue facilities, of which Greece is clearly not a part. A meeting between German Chancellor Angela Merkel and IMF Managing Director Christine Lagarde may prove to be more interesting. The German leader met with her French counterpart yesterday, where the two said they may complete new budget rules for the Euro area by the January 30 European Union summit, one month ahead of schedule.
On balance, while yesterday’s Merkel/Sarkozy meeting was not a game-changer in that traders learned little in terms concrete policy prescriptions for containing the debt crisis, the outcome likewise didn’t add anything substantially more negative into the equation. Expectations of a similar outcome to the Merkel/Lagarde outing combined with hopeful sentiment ahead of the fourth-quarter corporate earnings reporting season against a backdrop of improving US economic data appear to be fueling profit-taking on risk-aversion bets. This seems likely to continue weighing on the US Dollar over the near term after net speculative long positions on the go-to safe haven currency held near the highest in close to three months last week. Indeed, S&P 500 stock index futures are pushing firmly higher in late Asian trade, hinting the pick-up in risky assets is likely to continue.
By Ilya Spivak, Currency Strategist
Saturday, January 7, 2012
My Monthly trading plan
- Monthly on going to complete wave E
- Not follow only these directions what is monthly shown
- Just trades what is weekly would be & close week by week
- follow chart partten & price actions
-I am weekly trader!!!
Friday, January 6, 2012
US Dollar Surges on Nonfarm Payrolls, Europe – Can it Rally Further?
The US Dollar (ticker: USDOLLAR) surged against the Euro and other major counterparts, fueled by deterioration in Euro Zone tensions and unexpectedly strong US economic data. The domestic labor market unexpectedly added 200k jobs through the month of December, sending the unemployment rate to fresh multi-year lows and inspiring confidence in US growth. Momentum favors further Greenback strength, but extremely one-sided trader sentiment warns that any Euro/US Dollar corrections could be fierce in another week full of key event risk.
A relatively empty US economic calendar means that traders will focus on developments out of Europe, but traders should not ignore any fresh rhetoric from US Federal Reserve officials or late-week Advance Retail Sales data. The safe-haven US Dollar traded sharply higher on Friday despite a simultaneous rally in the negatively correlated S&P 500 and improvements in financial market risk sentiment. Why exactly?
We believe the US Dollar benefited from an important improvement in US Federal Reserve monetary policy expectations. The better-than-expected payrolls growth eases pressure on the Fed to enact further monetary policy accommodation. Such developments suggest the US Dollar could benefit from further improvements in labor market data and special focus remains on upcoming Fed rhetoric. The minutes from December’s Federal Open Market Committee (FOMC) meeting disappointed dollar bulls as the Fed struck a relatively dovish note on policy. Yet it will be important to watch how members react to December’s NFP data and its implications for employment trends.
US Dollar focus otherwise remains squarely on the Euro Zone and its many fiscal crises. It can’t be a coincidence that the EURUSD traded to fresh lows as the spread between Italian and German 10-year bond yields traded near fresh Euro era highs. CFTC Commitment of Traders data shows that speculators are their most net-short Euro against the US Dollar in history. Commercial traders are their most net-long, and it’s clear that positioning is dangerously one-sided. Yet what could happen to force an important EURUSD reversal?
It’s obvious that initial euphoria over previous European summits and fresh bailout plans was very short-lived, and traders need more than rhetoric to lift the Euro higher. At the heart of the issue is the lack of sustainability in sovereign debt loads. Very few are willing to buy Italian and Spanish bonds—especially as both countries have significant bond redemptions and funding needs in the first 3 months of the year. The uncertainty is driving the Euro sharply lower at the expense of the safe-haven US currency. As long as such flows continue, expect the EURUSD to hit fresh depths.
There are few important technical levels in the way of further Euro weakness, and indeed the next reaction low suggests the EURUSD could hit $1.2590 until a bounce. Of course, such incredibly one-sided sentiment warns that any short-covering rallies could be quite fierce. It will be critical to watch how the US Dollar trades into Sunday and through Monday’s close. Typically the first day of the trading week sets the pace for subsequent days, and high reversal risk puts special focus on early trading. – DR
By David Rodriguez, Quantitative Strategist
Australian Dollar 10200 Serves as Pivot
Ultimately, a corrective wave is probably underway in the AUDUSD from the November low (9663) but a drop below 10200 would trigger the above count and shift focus towards the December low (9863). What’s more, that rally on 1/3 feels like exhaustion. Action may get choppy in the 10175-10215 area (61.8%-50% retracement, former pivots, and channel line) but a break below would probably see acceleration towards 10043. 10300 is resistance Friday.
Prepared by Jamie Saettele, CMT
Prepared by Jamie Saettele, CMT
fiber..What've saw on weekly
Soros says EU break-up would be catastrophic: report
(Reuters) - A collapse of the euro and break-up of the European Union would have catastrophic consequences for the global financial system, billionaire investor George Soros was quoted as saying.
"Today, the euro is potentially endangering the political cohesion of the European Union," the Business Line newspaper cited Soros as saying in the south Indian city of Hyderabad.
"If the common currency were to break down, it will lead to the break up of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system."
The euro zone crisis is "more serious and more threatening than the crash of 2008," the Economic Times reported, quoting Soros.
In the near term, some of the euro zone countries may have to take more austerity measures because of the imbalances between the "creditor and the debtor countries," Soros said at a business school event, the Mint newspaper reported.
"Unfortunately, they haven't yet solved the acute financial crisis and that is causing the situation to deteriorate...and (it) is not at all clear it will have a solution," he said.
(Writing by Sumeet Chatterjee in MUMBAI; Editing by Ranjit Gangadharan)
