MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
US Dollar gains seen in overnight trade have held up quite well as we head into the London fix with the market potentially shifting towards an environment where the USD finds favor in any conditions. The elevated risk aversion has generated large bids for the greenback overnight, while the much better than expected empire manufacturing data and TIC data which showed a demand for US Treasuries was also seen as USD supportive. Many are now pricing in a narrowing of yield differentials in favor of the US, which could result in more material USD gains over the coming weeks. Technical traders cite the break of the 50-Day SMA in EUR/USD and will be watching closely to see if we can establish a close below the recently supportive moving average. US equities and commodities continue to get slammed and this has also resulted in considerable losses for the antipodean currencies, with Kiwi getting hit the hardest. Looking ahead, there is still some data to be released in the form of NAHB house prices (18 expected) at 17:00GMT.
ANALYSIS OF SELECTED RATES
Gbp/Chf: One of our favorite trades at the start of 2009 and was to look to take advantage of an oversold Sterling against both the Euro and Swissie at any chance and on any dip. This strategy has proven to be a rewarding one and with plenty of time to go until the year end, we continue to recommend buying Sterling on dips on the mentioned crosses. Currently, this cross has been undergoing a period of weakness over the past several days, resulting in a material pullback from the 1.8100 area to 1.7600 thus far. However, these setbacks are still classed as corrective and we ultimately favor bullish resumption back towards 1.8100 over the coming days. The market seems to be very well supported in the 1.7500’s and with the 78.6% fib retrace coming in just under 1.7550, we will look to take advantage of any additional intraday pullbacks to look to establish a fresh long position. STRATEGY: BUY @1.7550 FOR AN OPEN OBJECTIVE, STOP @1.7350. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON MONDAY.
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”).
Monday-Friday (between 6:30am-7:30am EST)
“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.
Monday-Friday (between 10:30am-11:30am EST)
“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.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)
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