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Friday Forex Outlook

Friday brings with it further confirmation of the pattern of trade that is in place, as the near-term period of global market trade consolidates while questions are answered regarding forward growth prospects. 
 
It seems that each 24 hour session of global trade has the three main regional markets being able to move prices only at their daily open and close times, if at all.
 
Global trading patterns can be linked to the fact that regional markets cannot attract anything more than speculative intra-day interest with markets have are missing large institutional volume levels. Oil markets caught long bids in trade on Friday, but were not strong enough to impact Usd trade overall.
 
Most pairs held very tight channels going into the last trading session of the week, ahead of the G20 meeting of world leaders. Global risk markets held support, after dropping lower off recent highs in trade this week.
 
 
S/P futures
are at the critical 1075 swing point. Watch for the Weekly chart hold above that area to trigger 1105 tests, or below trigger a 1050 move. Daily trading range is very high at 2.5%. German Dax trade is looking to hold 6050 and the Japanese Nikkei is battling 9700, with both support areas pivotal for setting expectancy in what traders will see unfold next week.
 

The withdrawal of $35B of individual investment funds, and the lack of free-flowing inter-bank lending is creating forex charts that are becoming very reactive to 21:00, 02:00, 07:00, 11:00, and 14:30 ET open/close moves, but yet are unable to easily break and hold near-term ranges because regional cash volume is just not there.
 
 
TheLFB Trade Desk
is waiting out the last couple of sessions of trade this week, and noted that speculative interest and institutional volume have not allowed forex movement, and from Sunday will be implementing intra-day signals again.
 
Choices were made to hold fire in the latter part of this week in expecting too much to be able to break and hold once the market was charged with absorbing Yuan/Usd peg news, G20 sound-bites, regional Government news (U.K. and Australia), and technical tests of main swing points in global equity markets.
 
 
Forex 4-hour chart
overviews show very weak momentum reads, in-line with very mixed risk and demand market reads, but with half-year book balancing out of the way the signals will be flowing, and the most will be made out of times to trade, and when to bank.
 

TheLFB signal parameters remain the same; Entry triggers off breaks of intra-day price points that have been centered off Neutral Swing Point areas most days, look to bank 50% near-term (average 30 pips on most pairs) and move the Stop Loss to the Entry, then close 25% mid-term (average 50 pips on most pairs), and to leave a 25% runner open that will be closed off a longer term signal.
 
Forex Overview
Eur/Usd is holding a long trend with 1.2250 a main support area that looks hard to see being broken.
 
Gbp/Usd is bullish in the near-term with 1.4850 a possible buy-the-dip area looking for a long test of 1.5000. 
 
Aud/Usd needs to close above 0.8700 to re-set the long trend that has been in place for a while, just as much as closing below 0.8650 will likely draw in short near-term speculative trade.
 
Usd/Cad looks to be ready to drop lower next week, off the test of resistance at the 200-day SMA at 1.0420, with a close below 1.0380 likely to trigger short interest. 
 
Usd/Jpy and Usd/Chf are two interest-rate connected pairs that are both dominating the dollar at the moment, and both are likely to remain volatile in intra-day trade on Friday.
 
 
The dollar index
recently reversed off the 88.50 resistance price point that sent it lower in 2004, 2005, 2008, and 2009. There seems no reason to think that the same price point cannot be re-tested if equity markets fail to find support.
 
Whatever happens in other markets, the recent high may however be the top of where global valuations on the Usd are pegged.
 

The Usd up-trend is expected to remain stalled at 89.00 highs, as long-term resistance points impact trade. The inverse Usd/Stock correlation is in place. Daily trading range is high at 2%.
 

The dollar touches every part, of every global market, every day. It is the unit that central banks rely on as a reserve currency, and is the vehicle used to trade all global commodities on international markets. The index is made up of Euro 58%, Yen 13%, Pound 12%, Canadian 9%, Swedish Kronor 4% and Swiss Franc 4%.
 
 
Forex Momentum Times
8pm, 2-3am, 6-7am ET. Outside of these, look for near-term Swing Point trades. The intra-day 25 pip plays are housed in the Trade Plan and Trade Analysis areas.
 


Disclosure: No Position