The Chinese commence two days of meetings with young Tim Geithner, where he will smooze with and try to convince the Chinese that the US dollar remains as, well, as good as the dollar. In London, however, one banker suggests that the USD will not recover until the US economy does, and Goldman says the Greenback is headed to 1.45. I'm not aware either of these parties disclosed their positions, but it sure sound like they are short the dollar. In the latest COT futures report the total open interest was up a huge 18% as speculators bought 24817 contracts from the commercials. Commercials are now 2.8 to one long. This morning, once again, the 1.4300 was assaulted without success, and the pair has since pulled back to 1.4258. It looks like the whole speculative world knows and is prepared for the pending move above 1.43 to 1.45. Rarely is it that easy.
Bias: Higher Bias Term: Long Support: 1.4239 1.4160 1.4060 Resistance: 1.4280 1.4350 1.4490 1.
GBP/USD Commentary and Trade Ideas
This pair continues the sideways meandering apparently lacking the reasons to break out of this pattern. A report this morning said that home values in the UK had stabilized while in the US home sales increased somewhat. Perhaps there is a trade in this pair but at the moment, I could only guess what it is, so it is beast to stand aside.
Bias: Neutral Bias Term: Medium Support: 1.6390 1.6300 1.6240 Resistance: 1.6540 1.6590 1.6700
USD/JPY Commentary and Trade Ideas
This morning we are again chewing into the resistance at around 95.30. Equities continue to be more appealing to the investors than the low risk and yield assets in Japan. This week there is a big 115B dollar US auction of notes, which normally appeals to the Japanese. Will they be selling yen to buy dollars this week? The early week auction of TIPS and 2 year notes may bore the investors, and if equities falter we may have a chance the dollar versus the yen cheaper. Try to buy this pair on a sell off to 93.90, risking 110 points. We will see if better things are in store for this pair later this week.
Bias: Higher Bias Term: Medium Support: 94.40 93.20 92.50 Resistance: 95.30 95.70 96.40
USD/CHF Commentary and Trade Ideas
Once the SF gets under 1.07, it looks like the pair finds some friends. In the futures market it looks like the friend is the commercial. As of the last report commercials were short 26,617 contracts and long only 3.438 contracts. Commercials have had a good track record of front running intervention by the SNB. The pair has advanced this am to over 1.07, but in the event the market settles back, try to buy the dollar versus the franc at 1.0670, and risk 100 points. Perhaps the pair is due for a rally back to the 1.09 area.
Bias: Higher Bias Term: Medium Support: 1.0650 1.0600 1.0500 Resistance: 1.0740 1.0820 1.0890
USD/CAD Commentary and Trade Ideas
Even without the help of higher equities or crude this morning the CAD remains firm versus the USD, and is currently trading at 1.0822. This move has been very orderly, but some of the oscillators suggest the market may be over bought and should settle back. Without a break in crude, it is hard to see much retreat within the current bull run. Try to buy a little sell off into the 1.09/10950 level with at stop at 1.1075. Perhaps a new high in the Canadian dollar can take us down to the 1.06 area.
Bias: Lower Bias Term: Medium Support: 1.0800 1.0700 1.0610 Resistance: 1.0860 1.0950 1.1050
AUD/USD Commentary and Trade Ideas
General all purpose optimism has enabled the AUD to surge a little above the two previous highs back in early June. Years ago an old technician told me double tops often hold, but not a triple top, so that implies more upside. So far the currency has performed well anticipating the recession's end, but when will the be the day we see some results of the recession ending theory? Could the new home sales later in the day be enough to move us higher? Stand aside until we see how the news breaks and the market reacts.
Bias: Higher Bias Term: Long Support: .8190 .8140 .8020 Resistance: .8230 .8300 .8390
NZD/USD Commentary and Trade Ideas
Despite printing a new Friday high and positive comments about economic recovery, the Kiwi trade lacks enthusiasm and has currently backed off to .6560. No trading suggestions at this time.
Bias: Neutral Bias Term: Medium Support: .6550 .6510 .6420 Resistance: .6600 .6650 .6700