FX Comments 12/03/2010

Good afternoon,

What a market! Volatility is pretty huge and we just had US unemployment numbers which were awful.
Since yesterday's ECB presss conference, EURUSD has been climbing up to 1.3370.
Mr Tichet hasn't told us anything new on the bond purchase program, except that it was not quantitative easing and the ECB has been seen purchasing a lot of paper which gave the strong tone to this EURO.
Now what? We are back at the high post Irealnd bailout (1.3350-60) and it will be interesting to see what will happen from here.
Either the market forgets the mess of the Europan sovereigns and we could continue to correct quite sharply, either they wont be such short minded and use this area as a perfect sell level. (I would prefer the latter..)

In terms of technicals, 1.3380 area is the 50% retracement from 1.3785 down to 1.2965.

Good luck,

FX Update 12/01/2010

This isn't going anywhere at mom. I am hearing that a few stop losses are placed on the upside and I wouldn'tt be surprised if the market takes them later this afternoon.
I am thus closing temporarily the position at cost and will try to reenter on better levels.

FX Comments 12/01/2010

Good morning,

A correction is currently unfolding in EURUSD, we went as high as 1.3092 this morning and we currently trade around 1.3075-80 as I write.
I think this upmove represents a correction within the bear trend and if you are bearish it should be worth selling into it. Ideally we should not break 1.3100 but there should be some big resistance up to 1.3130 also (200 day MA).
Looking at different press articles, we have a risk that ECB announces more quantitative easing by the ECB tomorrow and that should not help it.

Good trading,

FX Update 11/30/2010

Price actin is going our way but since there is no follow trough on this 1.3020-25 lvl, I suggest to either put a close stop on the short position @1.3065-70, either take 20/25 points profit.

Tomorrow is another day.

Have a good evening,

FX Update 11/30/2010

The area where we stand is the 1st resistance that I can see on my charts 1.3040-50.
I think we should try to sell some EURUSD for a target 1.2950-60.
A clear break on the upside would imply  a slightly stronger correction that could drive us back up to 1.3130-50

FX Update 11/30/2010

Profit taking target @ 1.3030-40 attained on rumors that France might be downgraded by S&P.
I just bought back my shorts for the moment. I think around 1.3100 should provide resistance now.

FX Comment 11/30/2010

Good morning,

Quiet price action ovenight after a very busy day yesterday that took EURUSD down to 1.3067 after reaching 1.3350 on the Irish bailout announcement.
The market has decided to continue to attack the EURO and now Portugal and Spain credibility are the targets.
I have resistances in the 1.3115-25 area to start with with 1.3150-60 thereafter. On the downside, supports are around 1.3070-80 area before 1.3015-35.

I have gone short on the first resistance levels with a target of around 1.3030.

Have a good day,

FX Update 11/29/2010

Despite attaining new lows, EUR doesn't show any sign of strength at the moment and it still trades quite heavily.
I just sold my longs for a 10 points loss since I have the impression of trying to catch a falling knife.
I will update later if I have any interesting ideas..

FX Update 11/29/2010

Euro tested briefly 1.3300 this morning and is back on the support levels I mentioned in my morning commentary.
For those who are short, I think trying to cover is not a bad idea.
For those who would like the contrarian side, I think it s a good level to try the long side to target 100 pts on the upside. A stop loss below 1.3110-20 would be advised.

Let's see

FX Comments 11/29/2010

Good morning,

Yesterday, Eurozone finance ministers approved a €85 bn financial rescue package for Ireland, although €17.5bn of this will come from Ireland’s sovereign wealth fund and other domestic cash resources. The remaining cash is to be sourced from the EFSM (€22.5 bn), the IMF (€22.5 bn), and the EFSF and bilateral loans (€22.5 bn).The cash is to be put to several uses: €10 bn has been earmarked for an immediate recapitalization of the banks, with a further €25 bn available as a contingency. The remaining €50bn is to be used to meet the funding needs of the State.

Of important note, EU Commissioner Rehn said that holders of senior bonds in Irish banks will not suffer a ‘haircut’ as part of the rescue effort.

This news should give a temporary respite to the EURO, but it will certainly continue to trade with a heavy tone on concerns for Portugal and eventually Spain.

Since the announcement, EURUSD traded up to 1.3354 overnight and back down to 1.3182 to open in Europe around 1.3240 as I write.

In terms of levels, 1.3155-75 area should find some supports and 1.3350-75, followed by the 1.3400-20 level should be the area of resistance.

At the moment, I would be more enclined to sell a rally in the area I just mentioned, but let's see how the european FX and bond markets interpret the news.

Have a good day,

FX Update 11/23/2010

EURUSD @ 1.3425..no corrective rally so far and we broke new lows.
The move is not over and selling still favored direction but question is at which level?
It looks like previous low @ 1.3440/50 is the closest resistance but I m even doubtful we retrace back there today..

Le's see

FX Update 11/23/2010

First target reached @ 1.3495.
I bought back my EURUSD shorts and I m looking to sell on a corrective rally starting around 1.3530/40 to be fine tuned.

FX Comments 11/23/2010

Good morning,

EURUSD has been under pressure overnight on Ireland and Portugal's problems again, South and North Korea tensions not helping and thus giving a stronger USD tone.

Today I think that the USD should keep a bid tone and thus would continue to recommend being short EURUSD. For those who are not short from yesterday, I have strong resistances around 1.3590/1.3600 followed by 1.3630 and then 1.3670.
The target on this trades should be 1.3495/00 followed by1.3450 or better if we break previous lows.

I will try to update during the day depending on how busy the market is.

Good trading,

FX Update 11/22/2010

Following J-C Trichet's comments on strong USD policy , I think that the withdrawal of the buy EURUSD recommendation is appropriate and I would be inclined to recommend a short position

FX Update 11/22/2010

The price action feels like we are on stop loss hunting mode and most of it should have been done by now.

I think we should try to play the long side from here around 1.3600 with a 1.3530-40 stop to target 1.3690 and even 1.3740-50 if things clear out..

FX Comments 11/22/2011

Good afternoon,

The Irish governemnt has accepted to request financial aid from the ECB and the IMF.
EURUSD reacted positively to this and went up by 100 points by the european morning.
This news must have been anticipated so much that since the peak, EURUSD went back down to 1.3630 as I write.
This area (1.3610/30) should hold if we are on a bullish trend and retrace back up to 1.3730-60. If not, we might see EURUSD retest new lows.

Good luck,

FX Comments 11/17/2010

Good morning,
The situation regarding the bailout of Ireland is still not sorted out and since uncertainty continues to prevail   EURUSD went sharply lower as a result.
The way it has been trading has made it difficult to hold positions, but the trend is still there...
Selling rallies or keeping a short position still prevails in my humble opinion.
Firest resistances lie around 1.3510-20, followed by 1.3560-70 and on the downside, small support around 1.3460-70 followed by a stronger one @ 1.3410-30

Wish you a good trading,

FX Comments 11/16/2010

Good morning,
We are still trapped in the range. No news of interest have emerged form european negociations on Ireland debt, but we should hopefully be fixed tonight.
In terms of EURUSD, the supports and resistance levels i mentioned yesterday still apply.

I will try to update as the day evolves.

Good trading,

FX Comments 11/15/2010

Good afternoon, nothing decided yet on Ireland debt concerns and EURUSD is again trading under pressure.

Some support seems to emerge in the low 1.3600 area and might imply a little correction, may be up to 1.3680 area or 1.3730 even but I still think it would only represent a correction since the trend is down.

On the downside, lower supports are around 1.3540-60 before 1.3500-10.

FX Update 11/12/2010

German Buds and Ireland spreads lower are giving a bid tone to EURUSD and provoking a sharp correction from the lows we've seen this morning.

We should have a decent resistance around 1.3720 followed by 1.3760.

If the trend is still down, these two areas should represent very good selling opportunities..let' see if the trend is still our friend..

FX Comments 11/12/2010

Good morning,

G20 meeting agreed to let markets define currency rates and we hopefully should be able to avoid a currency war. I hope that we can trust them this time..
Risk aversion is strongly back with equity markets sharply in the red and china stocks down on average 5.5% on the day.
EURUSD has been a one way street mainly on concerns over Ireland, JPY crosses are down on the risk aversion play..Feels to me the trend is strong (and even stronger than I thought) but difficult to trade since the corrections are violent, they kill the P&L and the nerves.

Today's resistance levels are around 1.3660-70, followed by 1.3720-30 and on the downside supports are @ 1.3570-80, 1.3510 ish for the moment.

Good luck,

FX Update 11/11/2010

Sorry typo I meant support1.3655-65 and not 1.3555-65

FX Comments 11/11/2010

Good afternoon,

Today's a late message since I have had trouble with the website that hosts the blog since this morning.

I didn't have much more to say than what I said yesterday, since we haven't had much news to report.
My ideas didn't overall change neither sine I think the trend is still there.

We had was a volatile session, jumping from yesterday's lows @ 1.3670 back up until 1.3820
to return to the same 1.3670 lows. This price action has been really hard to trade since it marked a pause in the trend and squeezed many shorts.

Today EURUSD should find support around 1.355-65, followed by 1.3630 and resistance is around
1.3750-60.

FX Comments 11/10/2010

Good morning,

The EUR had another decent downmove yesterday trading down to a low of 1.3735 overnight.
US interest rates reversed quite sharply to the upside giving further support to the USD.
My scenario proved to be correct, we firstly held the support @ 1.3835 before squeezing a lot of short term traders out on the upside, to finally break the base of the triangle support @ 1.3790.

What is important to note is that not only the EUR went down vs the USD (based on the sovereign concerns), but AUD, GBP, JPY were also trading on a very soft patch.
The G20 in Seoul is starting today and we may face some higher volatility on this basis, but I still think the risk is for a stronger USD across the board.
We have had a decent correction since last Thursday's top @ 1.4282 and the 1.3730 region as held since October but I think it's a question of time before we attempt to break it.

In terms of levels, first resistance comes around 1.3830, then 1.3880 and 1.3950.
On the downside, we find 1.3740, 1.3700 and 1.3650.

Have a good day,

FX Comments 11/09/2010

Good morning,

Overnight moves again..two days in a row during asian hours has seen EURUSD being under pressure.
Interestingly enough, when reserve managers are not on the bid, it doesn't really seem that the market is very keen to buy Euros.

As I said yesterday, I think we continue lower in the pair and you will find some small support in the lows around 1.3835, followed by the base of the triangle situated around 1.3790. This break of this area would be as important as when we broke 1.4005 on the upside and would definitely signal that we have seen the highs for a while. This is my preferred scenario!!

On the upside, 1.3880-90 followed by 1.3950 should be the resistance levels.

Good luck,

FX Comments 11/08/2010

Good afternoon folks,
I am sorry, I have been quite absent from Friday afternoon post payrolls.
After being wrong, the speed of the market on Friday did't let me any chance to share my thoughts with you..

The EURO has been under serious pressure all Friday afternoon and it continued all of today, it was coming from sovereign concerns, mainly on Irish ones.
The pivot level of 1.4000 (low post FOMC) has been broken overnight. In my idea, that should be a very good sign for the bears, since it makes me think that we now have a top in place @ 1.4280-90.

Now the strategy should be more one of a sell rallies (I hope I wont be as wrong as last Friday), but that's the name of the game..identify a trend (hoping that we finally have one) and try to enter on its extremes and benefit as much as possible of the market volatility.

In terms of levels, on the topside, 1.3940-50 (quite close from here), then 1.3990-1.4000 followed by 1.4080-90 (overnight highs) and 1.4150-60.
On the downside, we have nice supports around 1.3860-65, then @ 1.3800, 1.3710 and lastly @ 1.3650 ish.

We have a G20 next Thursday and Friday, where FX will be a big topic. We will certainly hear comments regarding currency manipulation. Interestingly, this time it is the US who's getting blamed since they last easing move is considered as artificial manipulation to get a lower USD. It will take some good arguments to the US administration if they want to explain all the other world leaders that it is not the case...

Good luck, be flexible but in my mind the south is the preferred direction. Try to sell on resistance levels mentioned and not on the dip, since there is always some nasty retracements to make us doubt on a position.

FX Update 11/05/2010

I have been dead wrong on the buy the dip strategy.
Sold my long from earlier for a loss of 88 pts.
US figures surprisingly very strong I guess we have to see if this 1.4000 continues to hold.

FX Update 11/05/2010

EURUSD under pressure, as well with other EUR crosses on PIGS concerns..
what's really new? I don't know..I guess it s more a question of triggering weaker stop losses.

On this basis, I now have some supports starting at this level (1.4155) and extending down to 1.4110.

For those looking to play the buy dip strategy, I think it is a nice risk/reward trade pre-payrolls:
I just bought 1.4158 target 1.4215 and higher to 1.4260-80 if payrolls give a bad USD tone. Stop loss should be below 1.4090-1.4100

Let s see,

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FX Update 11/05/2010

I am taking this spike back up @ 1.4215 to get out of my longs at cost and will reassess later.

FX Comments 11/05/2010

Good morning,

This morning will certainly be a range play until we have US unemployment later this afternoon,

EURUSD is trading around 1.4188 as I write and has been under pressure overnight after trading up to 1.4249, thus missing the take profit on my longs @ 1.4260.

Ideally 1.4170-80 should hold for a retest of 1.4260 pre payrolls. The only thing I don't like is the market must be quite long from yesterday's huge buying all the way up from 1.4120 in Europe until 1.4280 during US hours.

Let's see how's the appetite this morning.

Have a good day,

FX Update 11/04/10

This one being the real last update for today..

Looking at price action and the trend being your friend until it ends..
I just went long here around 1.4215 targeting 1.4260 and 1.4285-95.

Stop loss should be below 1.4160-70.

Have a nice evening,

FX Update 11/04/10

Good evening and last update of the day,

EURUSD close to the tp zone. It s so slow and as it was a counter trend trade I m enclined to buy my short back here @ 1.4216 for roughly a total of 54 pips.

Resistance for tonight will be around 1.4260 , followed by 1.4285-95.
Supports will lie around 1.4180-1.4200 and further away around 1.4130.

Have a nice evening,

FX Update 11/04/10

Sorry to bother you with many updates, but this market is really nervous.
I resinstated my short position @ 1.4240 targeting this 1.4180-1.4200.

FX Update 11/04/10

EURUSD seems a tad supported at this 1.4250 level. If it holds, we might retry the upside around previous highs if not slightly better.
I am covering my short here to resell later around 1.4280-90.

FX Update 11/04/10

Just trying the short side here @ 1.4275-85 as a counter trend trade.
The play is to look for 1.4180-1.4200 to be fine tuned, while having a stop loss above 1.4320

FX Comments 11/04/2010

Good morning,
Market seems to have digested the FOMC outcome by now..
Following the announcement EURUSD went up 150 pips roughly down to 1.4000 before closing around 1.4125.
This morning everybody is selling USD, we just reached 1.4245 as I write.
The announcement was quite in line with expectations, but the duration was 8 months instead of 6 expected.
So what now? While I dont think it is really wise to counter the trend, US rates are trading lower and as a result so is the USD.
It seems that 1.4000 is going to be the monster pivot everybody will look at to signal a change in trend and while it s holding I guess buying dips might continue to be the topic. The market will certainly target 1.4370-80 in the first attempt. Very short term I think we are a bit overdone and I think we might retrace to 1.4160 before targetting higher.
Don't forget we have BOE and ECB meetings today and Unemployment in the US tomorrow, so it will remain volatile.

Good luck,

FX Comments 11/03/2010

Good morning,

While counting is continuing in the US mid-term elections, the current projections suggest a Republican victory in the House of Representatives, while Democrats might keep majority in the Senate. This outcome may lend the USD some support since it could act as a curb on fiscal spending.

Part of that, not much has happened the ranges have been respected and it will take the long awaited FOMC to announce their stimulus program to eventually finally define a trend.

I think until then it will be much safer to close speculative positions and stay on the sidelines, except for those wanting to trade intraday.

No real changes on the technical levels, still more of the same 1.4075-85 should act as strong resistance on the EURUSD topside and a first support is seen around 1.3975-90.

If we move out of this ranges, I will update with farther levels.

Have a good day,

FX Update 11/02/2010

Most of the stops on the upside must have been done and EURUSD still trades fairly bid.
However, the resistance levels of 1.4035-45 have for the time been respected and should they fail to contain
the upmove some new levels come into play @ 1.4065-75.
I ll continue to respect the idea that until we got FOMC, we shouldn't really overcome 1.4100 and will stick to my sell rally strategy.

FX Update 11/02/2010

Some short term support here @ 1.3950. I m keen to take a quick 40 pips profit here
and resell around the same resistance levels than earlier.

FX Update 11/02/2010

EURUSD is trading higher and the move looks quite impulsive. There is some rumors of stop losses above 1.4000-15 and the market might try to take them out..
That being said, I have some strong resistance around this 1.3990-95 levels and I think it would be wise to try to sell half a unit close to the resistance area and may be another half unit around the stops I mentioned.
I would set a stop loss level above 1.4100 for the deep pockets or around 1.4060-70.

The target on this trade would be around 1.3850 to be fine tuned.

FX Comments 11/02/2010

Good morning,

Quite a surprise overnight with Australia raising rates by 0.25% to 4.75% against market expectations.
As a result AUDUSD spiked by 100 points reaching a high of 0.9995.
EURUSD has been following the move and as I write is currently trading around 1.3940.
Yesterdays US stronger manufacturing data lent some support to the USD, since they might imply stronger GDP growth (and may be a softer QE).

Now we all know this week will be extremely busy and should be quite determinant to what the FED will do next. Firstly, tonight we will know the US mid-term elections outcome then tomorrow's FOMC should be finally explicit in regard to quantitative easing measures.

In the meantime, it is very difficult to have a clear idea of the next trend. We have been trading in a range and in terms of technicals we see a lot of triangle patterns looking to be broken soon.
My first contrarian take would be to think that the market expects too much easing and the surprise would be a higher USD, but since the FED can announce something quite big,  I would not bet the ranch against it.

In terms of EURUSD levels, I have quite a big resistance around 1.3985-95, followed by 1.4035-45. On the downside, supports are @ 1.3870-80 followed by 1.3800.

I have no strong idea that could give a nice risk/reward trade as of yet, but will update as the day evolves.

Good trading,

FX Update 10/27/2010

EURUSD is feeling a bit toppish around this 1.3790-00.
Since a profit is a profit and we had quite a nice run during this month,
I will call it a day and take profit on my longs @ 1.3792.

I continue to think that we will should have strong supports for tonight around 1.3735-55.

FX Update 10/27/2010

Good afternoon, late comments since market was uninspiring with month end flows.
Looking at price action and technicals, I think EURUSD might base here.
There s been some huge selling and it feels over to me for the mom.
I just tried the long side @ 1.3765, initially having strong support points around 1.3735-55. Ideal target would be around today's highs or better.

I will be away until Monday.

Wish you good luck trading.

FX Comments 10/27/2010

Good morning,

The "buying the dip strategy" in the EUR has not been working the last couple of days and as a result I have been taken out of my long position during New York hours. As per my comments, I felt it was trading heavily, but I was stubborn to think that shadow buying by Reserve Managers would be sufficient enough to hold it above the @1.3840-50 support.
During Asian hours, Australia reported slightly weaker that expected economic figures and the currency sold off (analysts will certainly now tell you that they don't expect a hike by the RBA next week..). Interestingly enough, USDJPY also went up, going further away of the 80.00 big figure so widely publicized for its options barriers. This upmove might certainly be more attributed to the fall in the 10 Y futures, since their correlation is enormous.

By the end of the week, we have month end that might generate some volatility and distortions until the fixings and next week, we are all waiting for the outcome of the (in)famous FOMC meeting and results of US Senate elections. It will be key to the next directions markets will take.

In the meantime, let's see what the day brings us.

FX Update 10/26/2010

We just tested 1.3840 level around the european fixing time.
If I am correct, we might be on for a correction now that a lot of long seems to have been cleared out.
I just went long @ 1.3867..I have a 1.3950 target and a firm 1.3830 stop loss

Have a good evening,

FX Update 10/26/2010

Sorry for this kind of useless trading, but this is going nowhere.
USD is back on the offered camp vs GBP and AUD, following index futures but not vs EUR.
On this basis, I just squared out my position at same rate of entry..
1.3840-50 is definitely the level to watch on the downside for further acceleration..

FX Update 10/26/2010

First wave of stop losses hunting attained a low of 1.3879 for the time being.
I just went long @ 1.3890 as I think that we should hold for the moment to retrace up to 1.3950-60.
I will consider to be wrong on a clear break of 1.3840-50

Let's see

FX Comments 10/26/2010

Good afternoon,

Sorry for the delay, but I didn't have many thoughts to share this morning..
Except for GBP which was supported early this morning by Reserve Managers, followed by strong UK GDP figures and finally S&P's revision to a stable outlook and affirmation of UK's AAA rating, the rest of the price action in G10 was rather dull.
EURUSD seems stuck in a range with a slight bearish tone. It s still being supported by Asian buyers on the dip, but upside progress seem, for the moment at least, quite limited.
At the moment the strong supports are around 1.3900 followed by friday's lows around 1.3860, but I wouldn't be surprised to see some stop loss hunting on the break of those levels.
Resistances are around 1.3985-95 and 1.4015. For today. overall I would be more enclined to sell rallies.

Let's see how it develops.

FX Update 10/25/2010

I am less comfortable with the upside at this stage. EUR doesn't seem to want to progress,

so I rather get out with a small loss for the moment.

I just sold my remaining position at 1.4033.

All in all, I take 1.small 16.5 point loss and will reassess later.

FX Update 10/25/2010

Tricky price action,
EURUSD went down to 1.4002 and I was thus stopped on 1/2 unit @ 1.4014.
Interesting to note that AUD keeping a bid tone trading @ 0.9945..
I think that 1.3980-90 has to hold if we are looking for a test higher, thus SL stays @ 1.3970 for the remaining position.

FX Update 10/25/2010

Since IMF member remarks that "EUR is close to what they call overvalued",
EUR upmove has been stalling.
I will thus play it differently putting the SL @1.4015 for 1/2 unit and @ 1.3970 for the other 1/2
For the moment I do not change the take profit levels

FX Update 10/25/2010

I am raising the Stop to 1.4000 and adjusting take profits for 1/2 unit @ 1.4110 and the other 1/2 unit @ 1.4160.
I am may be far too optimistic but I will fine tune if we go there.

Let's see,

FX Update 10/25/2010

Following my morning comments, I m long 1/2 a unit @1.4030, looking at the price action since we touched 1.4019 makes me believe that we should go higher to the targets of 1.4110 ish.
I thus just bought the remaining 1/2 @ 1.4050 looking for 1.4110 ish
Stop is now raised on the full position @ 1.3970

FX Comments 10/25/2010

Good morning,

The USD trades weaker post G20 meeting, mainly vs EUR, AUD and JPY.

What I am reading from various commentators from Banks and the financial press is that despite the fact that the G20 agreed to agree on specific limits to keep current account imbalances at sustainable levels,  to refrain from competitive devaluations, to remain vigilant on disorderly movements in exchange rates while aiming at reducing risk of excessive volatility in capital flows, there seems to be no willingness to engage in  currency coordinated interventions.

It seems the market has been much more influenced by strong Australian figures pointing to higher inflation, and some research that I read from Goldman's Hatzius regarding Fed policy:
-Fed almost certain to announce easing Nov. 2-3
-probability of QE is extremely high starting with 500 bio, going up to 2 trillion
-Taylor rule shows Fed might need up to 4 trillion
With those numbers, no doubt it gives food for thoughts..

We have Chairman Bernanke speaking today at 2.30 pm, it will be certainly interesting to hear what he will tell us. On sterling, Mervin King is due to speak tonight at 21.00 pm, it will certainly keep the pound under pressure until then (in the crosses at least).

Trading wise, I have some supports on EURUSD around 1.4025-30, followed by 1.3970-90.
Nice resistances up 1.4105-15, then 1.4170-80.

Let's see if the weak USD mood continues, if so I will try to buy on the supports I just mentioned (1/2 a unit on the 1st support and 1/2 a unit on the 2nd support). Stop loss should be placed below 1.3930, to be adjusted as the day goes by.

Good trading,

G20 comments

Good morning,

Here is the Bloomberg link to conclusions on the G 20 meeting:
http://www.bloomberg.com/news/2010-10-23/g-20-pledge-to-avoid-competitive-devaluations-endorse-market-driven-rates.html

Here is a list of the most interesting headlines I've read from the different participants:

*TRICHET SAYS IMPRESSED GEITHNER SUPPORTS STRONG DOLLAR
*TRICHET: SOME IN G-20 CONCERNED ABOUT QUANTITATIVE EASING
*TRICHET ENDORSES G-20 PLAN TO BE VIGILANT ON EXCESS FX MOVES
*GEITHNER SAYS U.S. HAS SPECIAL RESPONSIBILITY TO SUPPORT DOLLAR
*GEITHNER SAYS REAFFIRMS POLICY TO SUPPORT STRONG DOLLAR
*NODA SAYS G-20 STATEMENT ON CURRENCIES MORE ACTIVE THAN BEFORE
*NODA: G20 STATEMENT ON RESERVE CURRENCIES MEAN U.S., JAPAN, EU
*YOON SAYS G-20 WILL RESPECT MARKET MORE FOR EXCHANGE RATES
*S. KOREA'S YOON SAYS G-20 AGREEMENT WILL END CURRENCY DISPUTES
*G-20 SAYS IT WILL PURSUE MORE MARKET-DETERMINED CURRENCY POLICY
*G-20 PLEDGES TO AVOID COMPETITIVE DEVALUATIONS OF CURRENCIES

The most pertinent seems to be those of Mr Trichet.

It will be interesting to see how the market will interpret all this on the opening later and in the next days to come.

Have a good day,

FX Update 10/22/2010

It seems that I unfortunately missed the sell opportunity..we are down now around 1.3925-30 as I write.
Europe is gonna close in 2 hours and liquidity will gradually dry.
I am gonna take out my orders and pass the weekend without positions since we might have different outcomes in case that something of note comes out of the G20.
We finish the week on a nice positive note based on the different ideas I'e been sharing with you.

Have a nice weekend

FX Update 10/22/2010

Good afternoon, we have had some decent volatility this morning on position adjustments between
1.3858 and 1.3973.
Following my morning comments of fading the extremes, I would be inclined to sell EURUSD
@ 1.3965-70 for a target of 1.3880, even 1.3825-30. The next resistance on the upside lies @ 1.4015-25.
Based on this I will try the short side with a SL above 1.4050 (to be fine tuned)

FX Comment 10/22/2010

Good morning,
Sorry for the late comment, but my ideas are quite split on what's going to happen next.
The price action as of my latest comment was quite messy as I said and it didn't really fell like we
were going to break much higher on the upside. Since then we have seen a nice retreat of EURUSD to the downside, with no massive news of importance that would justify such a move.

We have the G20 communique scheduled to be released tomorrow morning and FED FOMC statement on QE2 to be released next wednesday. These two events will generate a lot of volatility not only by their outcome past-comments, but also before since we will assist to a lot of position adjustments due to risk reduction.

I am hearing that smart money (ie Reserve Managers like China and Korea) buying the dip in EURUSD but at mom it trades quite weak.
Overall I would be tempted to fade the extremes, since we will only know the first important of the outcomes tomorrow. My first levels of importance on the downside are 1.3860-70 that we held 1/2 hour ago and 1.3825-30. On the topside 1.3950 ish.
I ll let you if I have a strong idea worth trading later on as the day evolves.
Good trading

FX Update 10/21/2010

It feels messy. We have seen 1.4039 high for the moment.
I finally sold the full position @ 1.4022 average.We ll reintitiate a position when it becomes interesing
in terms of risk reward.

FX Update 10/21/2010

We can hike the SL to 1.3960, thus risking 10 pips on the trade.
I suggest to modify the take profit to 1/2 a unit @ 1.4030 and see if it breaks if we can see new highs for today.
I will update you on the spot.

FX Update 10/21/2010

Tricky level..EURUSD trades softer form earlier this morning..
I have a few light supports in this area..I justo bought a unit of EURUSD @1.3970
risking 1.3930 to retest 1.4030.
I m not hugely convinced, but if the trend is there I think it s a decent level to try the long side
Let's see

FX Update 10/21/2010

Ok folks,
We just touched 1.4045, which to me is a very strong level.
I am out of the moment from my longs of 1.3940 since we touched 1.4030 my initial target.
I will reassess in a moment if we should continue to try to buy dips or if we should envisage going short again.

FX Update 10/21/2010

Wow..that was a quick and strong reversal! Apparently this spike up to 1.3980 was attributed to Asian Reserve Managers again and sincerely, looking at the way it traded I think it is correct.
Having a little bit more time now, the USD rise overnight was attributed to Geitner's comments in the WSJ
"he suggested that he sees no need for the dollar to sink further against the euro and the yen, saying these major currencies are "roughly in alignment" now".
What to expect now? It seems more to me that the market will try the upside, since it seems the weak side at the moment.
For the braves, I would try to buy EURUSD @ 1.3935-55 target 1.4030 with a SL below 1.3890.
Again, flexibility is very important.
Good luck

FX Comments 10/21/2010

Good morning,
We finally had a correction down to 1.3872.
Market picture is unclear and we are back to 1.3900 again.
Looking at technicals we are 50/50 of testing around 1.4000-30 or 1.3780-1.3800.
On this basis, I just covered my EURUSD shorts at 1.3910 for a little profit and will wait for better levels
to reenter a position.

FX Update 10/20/2010

This correction is slightly stronger than I expected for the moment.
We have surpassed the 1st strong resistance lying @1.3920-30 very easily
and went up to 1.3991 for the time being.
Two days ago we did a high @ 1.4005 and went straight down to 1.3700.
What has really changed since? Rumors by a US think tank of 500 bio QE extension by the US in the next 3-6 months..
So what? This is what was priced yesterday as well since the "experts" were already talking about
100 bio liquidity/month. If I am correct we wont know the real number before next Fed meeting
on Nov 3rd so we can expect lot of volatility until then with many rumors about that bloody QE 2.0
again..
Chinese authorities have hiked their rates yeterday to cool off some domestic and international pressures
and today it seems like all markets have forgotten about it..how silly?
You can soon expect the commentators to talk about it again when and if EURUSD goes back down to 1.3800 and below.
The bottomline is that I think we mightsee a runup to 1.4000-30 or so but I dont think it s gonna change the curreent trend. The only thing that would make me change of opinion is if something concrete came out, not just rumors..
Since I have to apply strict risk management rules I will stick with my levels and be flexible in case we breakup. It it feels like a false break, I will try again the downside.
We have Fed Beige Book in a couple hours which might trigger some more stoplosses, but hopefully my levels will be correct and we will see EURUSD lower later.

FX Update 10/20/2010

Well, well, well..my feeling wasn't that wrong..
It sems to me that we have now an new opportunity devlopping around 1.3920-30 to go short.
Ideally I will be looking for an initial target of 1.3780 with a stop loss 1bove 1.3970 for short termers and above 1.4040 for longer termers
Let's see..

Update 10/20/2010

I might be wrong, but I don't like the price action here..EURUSD feels bid..I m gonna close momentarily the position @ 1.3848 and wait for a nicer picture..We could still see higher levels such as 1.3930 without the downtrend having changed. I will rather prefer to sell on the upmove that getting stopped.
I will update you asap

FX Update 10/20/2010

Here we are..testing the strong resistance levels I was mentionning earlier 1.3873 just traded..it seems to me it is more stop loss related than anything, but you never know..
I am sticking with my original idea and stop loss.
Let's see how it develops

FX Comments 10/20/2010

Good morning,

I will stick to yesterday views that EURUSD should continue to trade lower down to 1.3650, even 1.3600.
The sharp retracement from 1.3700 lows overnight shoulld ideally cap here @1.3820, but we still risk
to trade slightly higher if some weak stop losses have to be triggered.
I would not like that EURUSD crosses back again over 1.3870-80 and will therefore put a Stop Loss
above this level on the position I just initiated here @ 1.3816.
Main risk event today might be Fed Beige Book tonight at 20.00.

Good Luck,

FX Last Update for 10/19/2010

Ok I just covered last shorts @1.3774.. time to go home, plenty of opportunities tomorrow.
I still feel USD correction not over, but volatility should allow us to resell EURUSD at better levels again tomorrow.

Have a nice evening,

FX Update 10/19/2010

It seems to me that the EURUSD rebounds are getting really shallow.
We have printed a low @ 1.3767 and rebounded @1.3830.
It feels to me like we normally should not go back over 1.3850-75,
so I just went short 1 unit @ 1.3818 with an initial target of  1.3740
and then stronger one @ 1.3660.
Depending how deep your pockets a stop loss should be over 1.3890,.
You have seen the price action of last night..it s bloody volatile, so be flexible
and don't get too stubborn.
I am gonna trade this with flexibility, but it seems to me the USD correction is not over.

Good luck,

FX Update 10/19/2010

Good afternooon,

I should have sticked to my initial idea of keeping shorts for 1.3800, since we jsut printed a low at 1.3793.
Instead of that I initially covered nicely this morning (a profit is a profit) and as the ZEW risk event seemed quite important I felt safer to be flat at that time. On such a strong print, I tought it would make sense to try the long side.
Luckily enough I used a tight risk management on this long position since it is actually not my preferred direction and got stopped at 1.3900 for a 35 pips loss.

Now what's the plan?
All the USD are on a strong foot GBPUSD; AUDUSD, USDCAD, etc..
Also since the China hike earlier all risk assets are lower, thus helping the USD as well and the S&P 500 Futures down 1%.
If the trend is right, we re gonna see more USD strenghth. I will look into my charts and check what are the best levels to reenter and short EURUSD position with  a good risk/reward and revert to you asap..

Good Luck,

FX Update 10/19/2010

ZEW Numbers really good.
I suggest trying long side here at 1.3935-40 target 1.4000-10
SL will be @ 1.3900

FX Comments 10/19/2010

Good morning,
After a violent spike from 1.3930 to 1.4004 around 2.30 am EURUSD is back around 1.3900.
Market seems quite nervous around this area. For the moment, I m enclined to take profit on my short for an 80 pts profit and see what the day brings us later.

10/18/2010 Update

As per my update of this morning, I got filled on my sell order and I am short @1.3980.

Since we are currently trading @ 1.3935, I am lowering my SL down to 1.4040 and I will leave an order to buy overnight 1/2 a unit @ 1.3890 and another half @1.3845.

FX Comments 10/18/2010

Good morning,

This morning the EUR is down approximatively 100 pips from where it opened in Asia.
Of note, dovish comments in italian newspaper "La Stampa" from ECB President Trichet that a majority of the ECB Governing Council is still in favour of keeping the sovereign bond purchasing program in place. Referring to the ECB’s mandate for price stability he said that raising the inflation target would be “disastrous”, and that he was also “completely against” the idea of raising inflation expectations.
This comments counter those of Mr Axel Weber, who's expected to replace Mr. Trichet at the end of his mandate, since he was in favor of a gradual exit of stimulus measures sooner than later.


S&P500 futures are also lower by 6.5 points since NY close, and it seems to me that they will take the same path lower as the EURUSD, initially targeting 1133.


Technically, in EURUSD I see strong resistance area starting @ 1.3935, but much stronger in the 1.3975-95 zone, where I will try to go short. The target on this trade will be 1.3800 and the Stop Loss will be at 1.4060.


I will post further comments as the day evolves.


Good Luck

Big Mac Index

This picture is worth a thousand words.

FX Comments 10/17/2010

Last week was very busy and volatile, since we traded at new lows in USD vs CHF, AUD, JPY and CAD in the majors.
The market was expecting that Fed Chairman Ben Bernanke would give us more clues regarding QE 2.0 and thus betting on more USD selloff. This is what happened a few minutes after he started his speech, but it seems that USD bearishness was then at its peak and we had a very strong reversal by the end of the day.
The US 10y future also responded by making a selloff, thus USD rates by going up, gave some very strong support to the USD itself.
In the future, my goal in commenting the FX arena will not be to tell you what happened after the fact, you have all the newspapers and market comments for that..., but I will try to anticipate those moves by commenting what I see in the market environment (interest rates, commodities, stock indexes futures movements), as well as technical analysis.

1st essay

Dear readers,
This is my first essay in the blogging world.
I hope that you will find my postings interesting and that it is going to be the beginning of many useful discussions.
Sincerely yours,

Jean-Marc