MORNING SLICES
Fundys – A fairly quiet start to the week with some as expected consolidation following the aggressive USD bullish price action in the late week. Sterling however remained under pressure with the single currency weighed down by articles suggesting that the UK faces the risk of a Japan lost decade, and news that Llyods would need a GBP15B fundraising. In the Eurozone, the received a bit of a boost from the better than expected headline Sentix. Meanwhile, in Japan, the opposition party’s Okada said that FX intervention was undesirable if markets were in line with fundamentals. The antipodeans have been the strongest currencies on the day, aided by favorable yield differentials and sounder fundamentals. Looking ahead, the economic calendar for North America is blank, with further consolidation to be expected on lightened summer trade. Equity futures point to a lower open, while commodities are also weighed down.
Techs - EUR/USD in the process of consolidating the latest sharp round of setbacks. A lower top is now sought out in the 1.4300 area ahead of the next drop towards psychological barriers by 1.4000. Initially, the 50-Day SMA and some rising trend-line support come in by 1.4080. USD/JPY confined to inside day price action thus far with the market taking a breather following Friday’s intense rally. Key levels to watch above and below come in by 97.80 and 95.90. GBP/USD continues to extend declines since positing fresh 2009 highs above 1.7000 in the previous week. A daily lower top is now sought out below 1.6835 ahead of the next downside extension towards 1.6500. USD/CHF not willing to breakdown down just with the market racing higher into a well defined range after just squeaking out fresh 2009 lows by 1.0560 in the previous week. Key levels to watch over the coming session come in by 1.0900 and 1.0700.
Flows – Option barriers by 0.8400 in Aussie. US prime name selling Cable.
Trade of the Day – Eur/Nzd: The cross rate is now oversold on the hourly and daily chart and we contend that a material corrective bounce is on the horizon. The market is now looking to test critical psychological barriers by 2.1000 and any setbacks below this barrier should be limited. The daily ATR for the cross comes in at 265 points which would project a daily low on Monday by 2.0975. As such, we have established a fresh long positon on the break to this level. POSITION: LONG @2.0980 FOR AN OPEN OBJECTIVE, REVISED STOP @2.0780.
P&L Update and Overview: Many of you have been asking for a way to better track trading results and open positions. In response to these requests and in an effort to be fully transparent, a simulated portfolio was been created in June to track and mirror all recommendations and trades. Below is a return on equity curve since inception on June 1, 2009, along with an open and closed position tracker. I am hopeful that this will make things easier for you all.
Additionally, please feel free to check out a full profit and loss statement since inception on June 1, 2009.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
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“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
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“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
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“Daily Classical” – A Daily Technical Overview of the Major Currencies.
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