Global Currencies Continue to Outperform the U.S. Dollar

EUR/USD Commentary and Trade Ideas

For the past two days we have wanted to buy the EURO but our orders were too cautious and we were unable. It is always difficult to know when a market is going to streak to a new level, or when it is going to take a stair step path. This pair is flirting with a series of five spike highs above 1.37 since mid March. If we take out the 1.37 on a closing time frame basis, we will probably encounter some get me out orders and then what? The daily chart shows a steep but orderly uptrend since 4/22. The trend remains higher so let's again buy a pull back at 1.3550 with a 100 point stop. If the pair first trades above 1.37 and then fails this order should be canceled.

Bias: Higher Bias Term: Medium Support: 1.3550 1.3450 1.3390 Resistance: 1.3690 1.3735 1.3900

GBP/USD Commentary and Trade Ideas

The pound continues to work higher, so far in an orderly fashion. The daily chart shows only minor resistance, and a medium term target of 1.59/60 seems reasonable. Currently we are at the top end of the channel on the H4 and daily charts. The hourly chart shows a loss of upside momentum with extended sideways activity. Just in case we catch some selling, let's place a buy order at 1.5420 and risk down to 1.5310. English authorities have unanimously voted to increase the asset purchase scheme by 50M pounds, thereby further increasing the money supply.

Bias: Higher Term Longer Support: 1.5540 1.5360 1.5210 Resistance: 1.5640 1.5720 1.5900

USD/JPY Commentary and Trade Ideas

Global equities continue to perform well diminishing the safe but low yielding currencies like the yen. The yen continues to gain on the dollar perhaps reflecting concerns about the current US's administration economic policies. We remain short from 96.45. Move the stop down to 96. and the cover price to 94.60. The USD is without friends today.

Bias: Lower Bias Term: Medium Support: 95.20 94.60 93.55 Resistance: 96.20 96.70 98.00

USD/CHF Commentary and Trade Ideas

Without Swiss Central Bank intervention the franc moved to a new high versus the USD at under 1.10. Our long trade at 111.35 was liquidated at 1.1050 on the way down. The USD seems to be without friends at the minute, but fear of bank intervention makes the long side of the franc unappealing.

Bias: Lower Bias Term: Medium Support: 1.0980 1.0900 1.0810 Resistance: 1.1030 1.1080 1.1230

USD/CAD Commentary and Trade Ideas

The USD made a new low on the recent move against the CAD yesterday. In retrospect the retracement rally back to 1.1780, at the 23.6% Fibonacci number was a great sell. What now? A continuation of the down trend could eventually take us into the 1.12/13 range. If the market has a little relief rally back, try to sell 1.1470 with a stop at 1.1560. We are currently trading at 1.1420. The Dollar Index is grudgingly working into new low ground.

Bias: Lower Bias Term: Medium Support: 1.1400 1.1300 1.1220 Resistance: 1.1510 1.1620 1.1730

AUD/USD Commentary and Trade Ideas

The AUD made a new high at a little over .78 to the USD Wednesday morning. This market has relaxed very little on the latest bull march as evidenced by the H4 RSI clinging close to the 70% line. Deutsche Bank overnight recommended borrowing the ASD's for a carry trade in Brazil, citing the lesser correlation of the AUD to equities as the reason to borrow the aussie dollars. Does this mean that equities are riskier than the Brazilian Real? Not sure how to approach this market. Buying new highs generally works better than selling them, but I choose to watch.

Bias: Higher Bias Term: Medium Support: .7720 .7650 .7560 Resistance: .7810 .7900 .8000

NZD/USD Commentary and Trade Ideas

The US Treasuries announcement yesterday morning that they plan to buy up to $300B of Treasuries caused buying in commodity based currencies this morning. The purchase of bills and notes results in the printing of large amounts of paper money and the eventual result is inflation and debasing of the currency. Like the AUD, the NZD retreats little from the highs. Longer term charts look good and counts can eventually take the kiwi back to about 66. Let's try to buy the market at .6050 with a 100 pip stop and see if we can catch part of this move.

Bias: Higher Bias Term: Long Support: .6050 .5960 .5850 Resistance: .6100 .6200 .6350

Stock Disclosure: No positions

Comments

[whidbey:]

Interesting, but what is driving the movement?

The Quant easing for one, and distrust of email policy making in the US government. I think the dollar goes down, the yen is in a longer term rise, and the rest of the currencies may thrash around to keep the children off the streets. A possible exception is the Australian unit. It may rise if things turn and even if they do not China seems a buyer of any metal or energy. FXA, FXY UDN seem good plays to consider.

May 21 11:05 AM

[Stepbear7:]

You people still don't get it.
The Central banks along with the Federal Reserve,Fractional reserve banking procedures, and absence of the Gold standard are the spring boards of happiness for these cartel counterfeiters to rake the entire world over the coals and out of existence.
Federal Reserve Notes are near extinction. Rightfully so, because they(FRN) are worthless paper not soft enough for biological purposes and has no value without Gold standard backing it.
The rest of the world is starting to realize the USD (Federal Reserve Note) is the ROOT CAUSE OF PRESENT GLOBAL CHAOS.
Use the Gold Standard and get rid of Federal Reserve Notes and start having the U.S Government Treasury print United States Notes backed by gold reserves only producing allotments as needed to balance goods and services.

Abolish the Federal Reserve Act of 1913,Fractional Reserve Banking, the IRS, Ben Bernanke and the entire Federal Reserve System.
Then you will be able to understand and open your mind and eyes and move on to a better economic level of survival.
In other words remove 96 years of bendover vaseline jobs frm the Federal Reserve System.
Just a thought ............. Have a good day,week,month,year and next decade.

Stepbear7

May 23 01:09 PM