EUR/USD Commentary and Trade Ideas
The big run up ahead of the long weekend in the US looks like this pair is overextended, but so far the Euro is holding the gains. Often thinly traded holiday markets give those with big positions a chance to muscle the markets in a desired direction, but such has not been the case this weekend. Maybe this market is to big to bully. A sell off to 1.38/ 138.50 after last week's move looks possible but you never know. The reception of this week's massive 100B Treasury auction will be closely watch to see if depreciating dollar fears will prompt some investors to ditch the dollar. Should that occur, there may be more upside in the Euro.
Bias: Higher Bias Term: Long Support: 1.3930 1.3800 1.3720 Resistance: 1.4020 1.4260 1.4500
GBP/USD Commentary and Trade Ideas
Surprisingly the pound has retreated little after last week's bull move. It is difficult to find constructive economic news to account for the strength. Perhaps the report by a weekend London newspaper that there will be over 220 new members of Parliament after the next election is a factor. The weekly chart looks constructive, and once markets break above resistance they generally go further than expected. The COT report shows large traders were net short over 25000 futures contracts so further short covering can be expected.
Bias: Higher Bias Term: Medium Support: 1.5810 1.5735 1.5610 Resistance: 1.5920 1.6000 1.6100
USD/JPY Commentary and Trade Ideas
When one of your ill mannered neighbors is shooting off missiles and blowing up nukes, it may be time to reexamine the yen safe haven theory. The sell off of this pair to under 94 for the second time, was enough for me, and we have subsequently rallied back above 95. With some of today's global leaders exhibiting an attitude similar to that of Neville Chamberlain, Japan has reason for concern. Should she shed some of her pacifist policies, I am not sure how this will play out. This problem is not going away. Perhaps the North Korea situation will cause further yen weakness.
Bias: Higher Bias Term: long Support: 94.00 93.50 92.10 Resistance: 95.25 95.90 96.50
USD/CHF Commentary and Trade Ideas
The daily chart looks like this market has some unfinished downside business meaning there is further dollar weakness pending. Soaring German investor confidence has probably moved over the boarder to Switzerland, perhaps postponing, perhaps alleviating the Swiss bank toxic loan problem.
Bias: Down Bias Term: Long Support: 1.0840 1.0710 1.0600 Resistance: 1.0900 1.1080 1.1230
USD/CAD Commentary and Trade Ideas
The USD seems trying to make a comeback after the recent rout by the CAD. Higher energy and equities has been given as the reason of the CAD's favor. Canadian retail sales report due out in the am but the energy prices are probably more significant. Try selling the USD versus the CAD on a retrace to the 1.1350/1.14 area. A country with an energy plan designed to increase supply makes sense. A government that is about to take over a large portion of the auto industry, and then dictate the design of clown cars, as IBD calls them, does not.
Bias: Lower Bias Term: Long Support: 1.1200 1.1060 1.0900 Resistance: 1.1310 1.1390 1.1470
AUD/USD Commentary and Trade Ideas
The Australian Dollar bull has had a great run since early March. Perhaps there is more on the upside but it is going to continue without me. The futures markets report that the large spec is a 4 to 1 long and the small spec 2.6 to 1 long. As we enter June these positions will either be rolled forward or liquidated, and if the selling does not find new buyers we will sell off. The majority is never right for very long. Besides a rogue government with nukes and missiles might disturb the status quo, and create uncertainty.
Bias: Neutral Bias Term: Medium Support: .7720 .7650 .7550 Resistance: .7840 .7900 .8000
NZD/USD Commentary and Trade Ideas
This small market has attracted outside investors, hopeful this commodity based economy will recover quickly from the current recession. As a macro concept trade, the Kiwi is subject to revisions not related to local economic conditions. Never the less the trend remains in place to the upside, so just stay with it.
Bias: Higher Bias Term: Medium Support: .6160 .6050 .5960 Resistance: .6220 .6350 .6500
