Currencies continue with bid tone into Monday and 2009 highs are in focus across the board for many of the major pairs, with the key focus undoubtedly on the 1.4340 yearly highs in Eur/Usd. Overnight data releases in the Eurozone were mixed, with German Gfk consumer confidence coming in stronger than expected, while the less important German import price data was weaker.
MORNING SLICES
Fundys – Currencies continue with bid tone into Monday and 2009 highs are in focus across the board for many of the major pairs, with the key focus undoubtedly on the 1.4340 yearly highs in Eur/Usd. Overnight data releases in the Eurozone were mixed, with German Gfk consumer confidence coming in stronger than expected, while the less important German import price data was weaker. Some weekend comments from Fed Chair Bernanke in support of the USD did not seems to bother European traders at all, with the USD well offered throughout the session. Also generating some attention was a UK Times article that banks were set for losses on commercial property loans. This helped to weigh on Sterling gains somewhat, although the single currency was still bid against the greenback. The Australian Dollar was one of the outperformers on the day with the higher yield and overnight comments from a trade minister that he was not concerned with the appreciation in the currency, helping to drive the relative strength. Looking ahead, new home sales (355k expected) are set for release at 14:00GMT, followed by Dallas Fed manufacturing (-10.0% expected) at 14:30GMT. US equity futures point to a higher open, while commodities are also well bid.
Techs - EUR/USD tracking higher on Monday with a break above 1.4290 to open a direct retest of the 2009 highs by 1.4340. Key levels to watch over the coming session come in by 1.4340 and 1.4170. USD/JPY looking to test falling internal channel resistance off of the 2009 highs which currently comes in by 95.60. Key levels to watch over the coming session comes in by 95.60 and 94.60. GBP/USD testing recent range highs above 1.6500 as the market considers a potential assault on the 2009 highs by 1.6745. Key levels to watch over the coming session come in by 1.6585 and 1.6380. USD/CHF continues to trade with a heavy tone as the market consolidates above the 2009 lows at 1.0590. A break below will open a fresh drop, while back above 1.0770 now required to take pressure off of the downside.
Flows – Japanese insurance company bidding Gbp/Jpy. US prime name selling Cable. Middle Eastern accounts buying Eur/Gbp. Asian central bank offers in Eur/Usd. Swiss bank bidding Eur/Chf.
Trade of the Day – Usd/Cad: Despite the exit on Friday for a 30 point loss, we are not abandoning the idea of looking to get long the pair with the market oversold on the daily chart and in need of a healthy corrective bounce. However, at this point it is more likely that the 2009 lows by 1.0785 will be taken out before any significant upside reversal can be achieved. As such, we will await the break of 1.0785 and look for an intraday oversold reading before re-entering the trade. STRATEGY: BUY @1.0740 FOR AN OPEN OBJECTIVE, STOP @1.0490. 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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Monday-Friday (between 5:30am-6:30am EST)
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“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
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“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
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