Friday 29/6 (11.50 pm)
I have dipped my toes in the water and bought some stocks. I'll update on this later. I plan to write Calls on these moving forward over coming months.
The indices are sitting at critical levels at the moment still though.
Friday 29/6 (7.45 pm)
I'm still waiting for confirmation of 'risk on'. See the 2pm update for the specific details of what I'm looking for.
I'm also wondering if we have just seen a 'bullish' double bottom pattern on the EURX daily chart?
Bullish moves on the Euro will be challenging though...see the cloud....
I am away from tomorrow; for 10 days.
Friday 29/6 (2 pm)
There have been major spikes towards 'risk on' after an EU summit announcement that there will be a single supervisory body for Euro zone banks. The USDX has broken well below the 82.65 support level and the EURX has risen in response to this news:
I want to see the following before I will trade 'risk on' though. I want a break, close and hold on the USDX below the monthly pivot at 81.65 and a break close and hold on the EURX above the monthly pivot at 100.5.
This has obviously caused massive spikes in the currency pairs as well. I'll be cautious with any new trend signals on the 4 hr charts though; new trend signals after spikes are problematic; I've discovered this the hard way!
Friday 29/6 (7am)
The broader stock markets finished down overnight but off their lows after a cancelled press EU conference gave some glimmer of hope that an UE debt solution was, at least, being discussed. The USDX is holding above the 82.65 level though which looks to be turning into new support. This is not a healthy sign for stocks or any 'risk on' entity:
The E/U is now trading below the weekly chart H & S neck line, This level looks like it has become new resistance:
The Aussie pairs are scrambling to get back above their 4 hr 200 EMAs, levels that were broken overnight:
I, like many others, are waiting for the madness of this week to conclude. I am out today and then away for 10 days from tomorrow but I will update when I can.
Thursday 28/6 (10 pm)
It has been Forex madness this evening. Some German Govt official made a few comments that sent the market into a spin (see below).
The USDX has broken and closed above the 82.65 level but is now re-testing this as I type. The EURX broke down and is currently trying to put in a mild come back too. Who knows where they will go from this point!?
The ADX is trending down on all pairs except for the E/J and the DMIs on ALL my pairs are currently pointing down and many are below the 20 level as well. So, lots of volatility and no clear trend; a point that is hardly surprising.
From Forex Live:
European morning wrap: Germany stomps on lingering EU summit hopes
Written by Gerry Davies
June 28, 2012 at 11:13 GMT
- German govt source: EU summit will produce no detailed decisions but seeks to accomplish important work on EU roadmap
- German govt source: Detailed deal on banks unlikely at EU summit
- German June adj unemployment rose +7,000, slightly worse than Reuters’ median forecast of +5,000. Adjusted unemployment rate 6.8%, steady from upwardly revised 6.8% in May (prev 6.7%)
- Eurozone June economic sentiment falls to 89.9 from 90.5 in May, but slightly better than median forecast of 89.5
- SNB’s Danthine: Swiss had rough road since onset of crisis. Franc cap is necessity for Swiss economy
- ECB’s Noyer: Europe has arrived at crucial moment, must advance towards more Federalism, stronger budgetary union
- Greece’s National Bank CEO: impaired loans in Q1 at 15.5%, pace accelerating
- UK Nationwide house prices -0.6% m/m, -1.5% y/y, fair bit weaker than median forecasts +0.1%, -0.6% respectively
- UK Q1 GDP (final) -0.3% q/q, -0.2% y/y. Y/Y read revised down from previous -0.1%
- JP Morgan’s losses may rise to $9 bln – New York Times
- German govt source comments hit the wires this morning (see above) and quickly extinguished lingering hopes of anything meaningful coming from the two-day EU summit. Risk aversion rose and was fuelled further by the release of a disappointing German jobs report (see above) Talk of increased JP Morgan losses (see NYT’s story) also impacted negatively.
- Eurostoxx down around 1%, gold off circa 10 bucks, oil touch lower, US treasury yields lower (benchmark 10 year at 1.5920% from early 1.6313%), yada, yada, yada you know the gig…..
- EUR/USD down at 1.2425 from early 1.2515 having been as low as 1.2407 after sell stops tripped through 1.2440. Some further sell stops seen through 1.2400.
- USD/JPY unchanged at 79.35 having dipped slightly to session low 79.22. Talk of semi official buy interest between 79.30 and 79.00 is lending some tenuous support against the risk off backdrop with it’s lower US treasury yields.
- Cable lower at 1.5535 from early 1.5590. Talk of buy orders clustered 1.5500/10, sell stops below there.
Thursday 28/6 (3.30 pm)
There is a bit of 'risk on' sentiment creeping into the currency markets. This happened before the last E/U summit though too apparently.
The stock markets were up last night and the bullish inverse H&S patterns are holding. I am not entirely convinced of these moves though as the ADX is pointing down and is below the 20 level on both the S&P500 and the Dow. Trading volume was thin last night:
'Risk on' might just continue on the currency front but there are some technical hurdles to this. The USDX has some pivots, EMAs and S/R levels in its path whilst the EURX has a savage looking Bollinger band to deal with:
Thursday 28/6 (7am)
The broader stock markets all rose overnight on good US data. This 'risk on' attitude was not reflected in the currency markets though. The USDX tried a move upwards but ran into the brick wall of the 82.65 level. This is the hugely significant 61.8% re-trace level from the last swing high of May/June 2010 to the low from April 2011:
The EURX essentially bounced around sideways though:
The E/U is still loitering near the safety of the weekly chart H&S neckline level. This is also near the psychological 1.25 level too:
The Aussie pairs are hanging in there above their 4hr 200 EMAs:
There are no clear trends on any of the 4hr charts. This is still 'holding pattern' stuff. I still think it will take news from the E/U summit to shift things.
Wednesday 27/6 (7.30 pm)
No real change to report from earlier except to say that Asian markets were up today and European markets are currently trading up too.
Wednesday 27/6 (4.30 pm)
I still see potentially bullish inverse Head & Shoulder patterns on the Dow and S&P500:
Wednesday 27/6 (4 pm)
There has been little change since this morning. The indices are merely tracking sideways:
The E/U is still sitting on the 1.25 level, the weekly and monthly H&S significant areas (see 7am for extra charts):
The Aussie pairs have barely moved either.
I don't think anything much will happen until after the Thurs/Fri E/U summit meeting.
Wednesday 27/6 (7am)
I believe we are in the 'holding pattern' ahead of the E/U summit that I mentioned earlier. Stocks finished up overnight but the currency pairs mostly bounced around sideways, as evidenced by some long upper and lower shadows on many candles.
The USDX is parked just under the 82.65 strong S/R level and the EURX is parked just under the psychological 100 level:
The E/U is hoovering around the strong S/R level of 1.25. This is the neckline of the weekly H&S pattern and is also the top of the shoulder on the monthly inverse H&S pattern!
The Aussie pairs are both hanging above significant levels too:the A/U at parity and the A/J just above the 4hr 200 EMA:
I don't think there will be any coherent trend until after the E/U summit.
Tuesday 26/6 (8pm)
I think all of the bad news is starting to wear thin on people and they want a bit of a change. I see no other way to explain why the Euro is holding up as it is! I've cast my eye over the stock markets as well. The S&P500 looks like it might be trying to print a reversal pattern; a bullish Inverse Head and Shoulder pattern. The neck line is sloping the right way for a bullish break out on this too, for what ever that matters at the moment. I can't see any justification for it but, then, that doesn't seem to matter of late!
I had pointed out a similar inverse H&S pattern forming on the Dow a while back. It is still valid too.
This is just something to keep in mind when trying to understand the flow of trading. What does it have to do with FX you might ask? Well, any rally in the stock market would normally be associated with a 'risk on' rally in FX, that is, a reversal from what we have seen of late.
Tuesday 26/6 (4pm)
It's back to meandering again. I suspect this might be the case until after the E/U summit unless there are further bomb shell announcements. I don't think the markets can cope with all the bad news!
Tuesday 26/6 (2 pm)
Risk off seems to be picking up speed again this afternoon.
An article about the A/U. Fits in with what I've been saying hence, I'm posting it!
http://www.cnbc.com/id/47943262
Tuesday 26/6 (11 am)
Risk trades seem on a bit today: from Forex Live:
Risk trades show a pulse
Written by Adam Button
June 26, 2012 at 00:26 GMT
Japan has brought some life to the market with yen sales boosting risk trades since the top of the hour.
AUD/USD has broken through medium-zied offers at 1.0020/25. The 5-day moving average at 1.0074 offers the next line of resistance with stops above 1.0080.
Month-end flows suggest mild EUR/USD buying on portfolio rebalancing (esp from the UK) but, by all reports, flows are expected to be light.
Tuesday 26/6 (6.30am)
The stock markets had an awful Monday falling over 1% and the VIX rose 15% to finish above 20. The currency markets paused overnight though with the 82.65 level on the USDX proving a little difficult to get past:
The pause wasn't surprising really given this USDX obstacle and the fact that many pairs had moved their daily range quota through the Asian session. Also, some pairs are at major S/R levels. The E/U is at the weekly S/R level of the H&S pattern:
The Aussie pairs are both at their 4hr 200 EMA and the AU is trying to hang in there above parity:
The concern now is though will the currency pairs go into a sideways 'holding pattern' until after this week's EU summit?
The TS signals, with trend line breaks, have certainly delivered since last week. There have been, up to now, 800 pips maximum produced in these moves!
E/U 100,
E/J 100,
A/J 100,
A/U 150,
G/U 50,
USD/SGD 100,
Swissie 100,
Loonie 100
Monday 25/6 (10.20pm)
I'm waiting for the 82.65 level to be broken on the USDX before getting into further 'risk off' trades. BTW: There are some pin bar reversal candles forming on the 4 hr charts at the moment.
Monday 25/6 (8.30pm)
The USDX is approaching key resistance in the 82.65 level, yet again. If this breaks it could open the flood gates to 'risk off' trades. If it holds, we could see a trend reversal:
The A/J is setting up for a possible short if it can break the 200 EMA. It has already moved more than its average daily range so far today so caution needed here too:
Monday 25/6 (8pm)
I've just had a 4 hr candle close. The E/U has broken the neckline, the A/J and E/J have given new signals and all the signals from last week have kept going! The A/U is just trying to break parity now but struggling somewhat.
Monday 25/6 (6pm)
I have another hour until my 4 hr candle close but 'risk off' has picked up pace with European trading.
The E/U is currently battling it out at the weekly chart H&S neckline:
The A/U is struggling at the parity level:
I'm waiting to see if these barriers will be broken or be new support.
The trend signals from last week have all picked up steam again. Rather frustrating for me as I closed some trades at the end of last week that would now be in substantial profit.
Monday 25/6 (4pm)
It is still looking like 'risk off' is the preferred sentiment today. I'm still waiting for signals and trend line breaks to kick in though. I do suspect that this may be another of those weeks where the moves, if they come, will do so in style during the Euro or US sessions. This is when trading from the 30 min charts during those times is more reliable. It counts me out though. We shall see.
The USDX continues its march upwards but it has a significant road block in the 82.65 level in its near path:
The EURX continues to slide. I even relaxed the bottom trend line a bit since the w/e update but this is still nearing to be possibly broken on the next 4hr candle close here:
Monday 25/6 (12 noon)
It is looking like sentiment is 'risk off' again for the start of the week so far.
The Swissie and USD/SGD have continued on their run from last week so I won't chase them. I'm wary of the G/U. My preference is to look to the E/U, E/J, A/U, A/J and Loonie for new set ups; as described in my w/e postings. Watching and waiting...patience and discipline!
Monday 25/6 (8.30am)
As per usual, I'm waiting for the first 4 hr candle close at noon before making any possible trading decisions. My Indices charts don't open for another couple of hours yet either.
My trading zones are very clear and detailed in my w/e updates. There weren't any real gaps at market open today. I want to draw attention to the Ichimoku on just the E/U and A/U daily charts though. I've been watching this indicator for a few weeks now.
E/U Ichimoku: Based on the cloud and line crossovers, I'm expecting that if price does not simply just continue to fall away here then there might be some reaction here or, perhaps, even some turbulence.
A/U Ichimoku: Similar thoughts here, based on the cloud, as for the E/U.
