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Weekly Currency Outlook

Derek Frey — Mon, 09 Nov 2009 13:52:38 +0000

We are still seeing the Dollar struggle to fully round this next bend but we continue to see more upside opportunity in dollars than downside risk. Therefore we continue to favor buying dips as it has paid out over 5000 pips for us since June 1^st of this year. We expect to see many dips to buy this week so be ready for some entries, many of them will be either fading new highs or buying new lows so be warned it will not be comfortable…at first…but in time it will look like genius.

EUR/USD:

This pair continues to present medium term entry opportunities as it trades north of 1.50. We are looking for spikes early this week to sell into. Look for the herd to chase this thing for a bit so we could see spikes into at least 1.51-1.52.

GBP/USD:

We are happy sellers this week near the 1.68 handle and expect to have a few opportunities above that to sell into. We could see some squeeze potential up to 1.70 but all of those wicks are just that much more of a sell. We continue to see the BOE as being too loose and really the lapdog of the FOMC so until that changes we want to sell strength here as it is temporary at best!

USD/CHF:

Parity remains a solid support level at this time and near term we do expect it to hold.
We are looking to buy dips back towards parity over the next few weeks.

USD/JPY:

This pair continues to see wild volatility as the shift from using Yen for carry trades to Dollars continues. This pair and other crosses with the Yen will continue to see extreme periods of bi polar activity as global risk shifts away from Yen and towards Dollars.

AUD/USD:

This pair is in a bubble of its own partly due to the commodity bubble we have seen reflated this year. This will be the “canary in the coal mine”. As this pair turns back before hitting parity you will see it lead the way down just as it has lead the way up in this global ponsi scheme the central banks seem to be running.

USD/CAD:

This pair has also turned just before hitting parity. We expect to see it push back up towards 1.10 before the year is out.

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Weekly Forex Outlook

Derek Frey — Tue, 03 Nov 2009 10:45:53 +0000

The Dollar has clearly begun the turn higher I have been writing about for months. We are looking for this to be a rather violent turn still. While we remain long term Dollar bears, in the near to medium term we want to continue buying weakness in Dollars. Buy low and sell high is supposed to be how this works. And it does if you just have the courage to buy when no one else wants to. Trades, when put on, if they are good, should feel very uncomfortable at first. Learn to find comfort in other peoples uncomfort.

EUR/USD:

This pair has seen a nice pullback from 1.50 but we could still see some spikes back up to and even through those levels in the near term but either way we want to sell strength.

GBP/USD:

This pair remains very volatile and is likely to remain so as global traders shift risk away from reckless central banks that engaged in foolish “quantitative easing”(talk about a euphemism!)

USD/CHF:

Parity remains a solid support level at this time and near term we do expect it to hold.
We are looking to buy dips back towards parity over the next few weeks.

USD/JPY:

AUD/USD:

This pair has poked its head near the .90 level and we are happy sellers near that area. We still see commodities as a sell this quarter and into 2010. Near term we will begin to use spikes as short entries. Same comments as last issue and the song remains the same.

USD/CAD:

This pair has led the charge lower in the Dollar, and is now leading the charge back up. We continue to favor buying weakness here as it has paid off nicely so far.

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Weekly Forex Outlook

Derek Frey — Mon, 12 Oct 2009 07:18:17 +0000

We have seen the Dollar hammered down once again and we are now looking at some very solid longer term entry points. We start this week off with the Columbus Day holiday with some of the markets closed. We have seen markets squeeze on these low liquidity days in the past so we are keeping an eye out for extreme moves to fade early this week.

EUR/USD:

We have seen it push slightly above the 1.48 handle and while we may still see one final push through 1.50 but either way we are looking to sell into rallies. Proceed with caution because of the high risk of blow off spikes.

GBP/USD:

This pair is still under pressure and we expect that theme to continue over the medium term. For now we are standing aside but should we see rallies back into the 1.60’s we may begin to sell short again.

USD/CHF:

We are still comfortable being long this pair from around the 1.03 handle. This pair continues to be slow to turn but we are confident that in time we will see this pair push back above at least 1.05.

USD/JPY:

This pair continues to see wild volatility as the shift from using Yen for carry trades to Dollars continues. We are beginning to look for long signals but until we see solid harmonic alignment we will stand aside.

AUD/USD:

USD/CAD:

This pair has led the charge lower in the Dollar. We are now knocking on the door of parity once again. We have high probability that we will bounce before we hit parity. Near term this pair is the highest risk of the majors but keep and eye on it as a barometer of overall Dollar direction.

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Weekly FOREX Outlook

Derek Frey — Mon, 28 Sep 2009 06:54:36 +0000

The Dollar has clearly begun the turn I have been talking about for some time. We expect this to last much longer than most expect. Partly because the mob (a.k.a. the crowd) is not expecting it. Look for continued Dollar strength this week and use any major dips as buying opportunities. Sell stocks and commodities while buying Dollars NOW, or wish you had later.

EUR/USD:

This pair had been slower to roll over than some of the others but now that it has we expect to see it begin to play catch up. We continue to sell rallies here and are looking for a move below 1.40 in the 4^th Quarter.

GBP/USD:

The cable continues to lead the way lower and is now well below the 1.60 handle. We expect a near term rally back up to that level and will use that to sell into. Bottom line here is simple, BOE has hung themselves and now we simply watch them die as they swing from the tree. Hate be so graphic but if the shoe fits.

USD/CHF:

This pair has been the slowest of the majors to acknowledge the turn. We see this pair as a solid buy near the 1.03 handle and are still looking for a move back up towards the 1.10 level before the year is out.

USD/JPY:

This pair is caught up in an emotional headline chasing tail spin and until the fools finish losing money chasing this thing I am happy to stand aside. That being said I would be looking for dips to buy into if I trade this pair at all.

AUD/USD:

This market is likely to prove to be on of the best shorts of all the majors as when we look back from the end of the 1^st Quarter 2010. We are happy sellers of rallies above the .86 handle.

USD/CAD:

Early this week I would be a seller near the 1.10 level but as we dip I would look to cover those and reestablish some long trades below the 1.09 handle.

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Weekly Forex Outlook

Derek Frey — Mon, 21 Sep 2009 12:30:43 +0000

We are still seeing this slow turn back up in the Dollar. We expect this to be a slow and choppy turn and still have about 45% chance of seeing lower lows one more time. Use dips as buying opportunities. While the longer term outlook for the Dollar remains grim the near term we see mush more upside opportunity than downside risk.

EUR/USD:

This pair spiked last week and we sold into that spike and covered for a decent profit ahead of the weekend. We are once again looking for rallies to sell into this week.

GBP/USD:

This pair is now trading near the 1.62 handle so those of you who put shorts on near the 1.67 handle as suggested in the last few issues, I would suggest locking in gains and or simply exiting with 500+ pips gain. Patience pays well doesn’t it?!

USD/CHF:

We continue to be buyers below the 1.04 level in this pair. We expect this pair to move back towards 1.10 at least before the end of the year.

USD/JPY:

This pair has decoupled more or less and is now searching for a new “master.” W suspect that simply due to lack of other options it will come back to the S&P500 but for now it remains in a world of its own. Until we see it “recouples” we will prefer trades in other markets.

AUD/USD:

This market is likely to prove to be on of the best shorts of all the majors as when we look back from the end of the 1^st Quarter 2010. We are happy sellers of rallies near the .87 handle.

USD/CAD:

This pair is still an attractive long on dips, in particular dips below 1.08. We are still targeting a move back into the teens before years end.

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Weekly Forex Outlook

Derek Frey — Mon, 14 Sep 2009 07:36:41 +0000

We begin the Fall season with a fall in the Dollar. As we have in the past we are buyers of these dips. While the long term prospects of the Dollar remain grim, in the near to medium term we are cautiously optimistic. We are looking for at least a “dead cat” bounce in the Dollar near term. We are up over 400 pips so far in the trading room this month so I hope all of you have gotten at least some of that.

EUR/USD:

This pair has seen a nice spike above 1.46, we are looking for rallies early this week to sell into so any retest of 1.46 area will be a sell level for us.

GBP/USD:

This pair also saw some nice spikes last week above the 1.67 handle. Any spikes near or above 1.66 should be looked at as sells area’s this week. We are particularly bearish this pair in the near term.

USD/CHF:

We have seen this pair gravitate towards parity lately. While we do expect that level to be breached in time, however near term we are buyers near the 1.04 level.

USD/JPY:

This pair has been attempting to “decouple” from the S&P 500. We are seeing it throw try and off the shackles that have US equities. We expect this pair to bounce around the 90-93 level for the rest of the month and are therefore buyers near the lower end of that range and sellers near the upper boundary.

AUD/USD:

This pair continues to hover above the .85 handle. This pair has both strong potential to remain stable due to solid economic policy by the RBA, and at the same time high risk of a sharp pullback should the Dollar strengthen and commodities falter as a result of that strength. So that being said we want to be extra cautious with this pair but the bottom line is we see more downside risk than upside potential and are therefore selling rallies.

USD/CAD:

This pair is still an attractive long below 1.09. We are looking for a move into the low teens before the end of next month.

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Forex Market: Upper Time Compression Technical Commentary

Britt Maras — Wed, 09 Sep 2009 06:56:54 +0000

European Fundamentals Not Supportive Versus US Dollar

I rarely trade the Week time compression but right now it is worth sharing some comments. Let’s start with today’s we have a Market Timing Alert forex signal:

Wed Sept. 9: 9:40-10:20 a.m. EDT start window for 3 hours duration with moderate to strong price action

Now onto the big picture view and forex trading: My week time compression offers a potential bullish thrust towards 1.5000 – which if it occurs may be extremely exhaustive and could lead to a collapse in the pair. Potential remains that key resistance at 1.4733-79 could offer a quick stall and any move above 1.4819 could lead to an exhaustive burst to 1.5007 – 1.5240.

Inasmuch I offer this comment, it is difficult for me immediately to find a bull entry here as I rarely if ever enter a horizontal breakout of key levels. Let me emphasize that I feel the EUR/USD is nearing the end of the recent bullish correction but often times a currency will fully retrace an extraordinary move such as occurred from the collapse last August from 1.5200; regardless of the amount of time it takes.

There are always various philosophical reasons for this notwithstanding technicals:

1. The move from 1.5300 downward was entirely technical and long overdue EVEN THOUGH coincidence appears that US Equity markets offered up Bear Stearns and then Lehman Brothers as the bride. The Dollar bull move was certainly technical, regardless!! 2. There may actually be savvy investors still holding euro long positions near and above 1.4700 OR on the other hand and of a better logic is – there may be prominent and savvy institutions STILL holding EUR/USD shorts from this level 1.4500 onward through to 1.5000 plus and as is typical in forex trading there is no free lunch.

Flying at 43,000 feet is a great view of nothing but blue sky but you cannot see dirt unless you have a telescope and a floor window in the cockpit. So much for the big picture view! There is plenty of sand in the euro sandbox right now so keep your goggles and your eyes free of the grit!

Daily Technical Outlook

Immediate Support is at 1.4455-31-13, 1.4373-59, 1.4277,1.4192/84, 1.4079 – 43

I feel there was an illegal (a technical violation) move from 1.4359-64 and then again down near 1.4280. Violations like this ALSO need to be revisited SOONER than later. I am in stand-down mode but I will remain focused on any type of impromptu news that may exacerbate exhaustion or reestablish the EUR/USD within some reasonable technical structure. Comments are appreciated! Thanks for reading!

Britt Maras – Senior Currency Strategist

The Autumn Run in the FX World

Britt Maras — Tue, 08 Sep 2009 13:13:53 +0000

Forex Trading to Improve Through Year End

Goodbye to August, a questionable one at that, as we get ready for what is likely to be a fantastic autumn FX market. I anticipate Market Timing Alerts to be restored to normal forex signal levels with effective technical price action and I expect liquidity but more so technical performance to normalize and be contained within efficient technical patterns.

I extend a gracious ‘thank you’ to all of our forex traders in the Timing the Markets Trade Room for their patience during a tumultuous August forex trading period. I know all of us are eager and look forward to resumption of more normal price patterns and market timing systems.

Macro Market Comments:

Currently I feel the equity market is zealously overbought, if that, let alone I am convinced that dealers, brokers and market makers of the like have been distributing or front-running the common joe schmo investor. This is not good!

Gold is over-extended and a break back below $984.00 levels with a New York close below 987-984 will be the first indication that Gold has experienced an illiquid bull thrust. This will be an important indicator for me but I do believe the forex market is the leader on the world stage for equity values and treasury yields. GILT’s are not in this race but JGB’s are now coming to the front of the pack as the world looks set to start to reevaluate risk for the balance of this year.

I remain cautious against equity values and fundamental news that may zealously impact the short-term value of the U.S. Dollar Index. Regular Market Forecast commentary should start to return to standard rate of delivery from me as soon as FX Technical’s improve and I see Gold reconditioned technically. Until then, stay tuned, remain patient and let’s continue to remain composed and in the hunt for what can be some fantastic trading events over the next few weeks and months to come.

Britt Maras – Senior Currency Strategist

Weekly FOREX Outlook

Derek Frey — Mon, 31 Aug 2009 01:23:29 +0000

I want to thank all of our subscribers for the kind words we have recieved after making over 1,600 pips in the month of August.

We are again seeing the Dollar gain strength this week and we expect that to continue as the year grinds on. We are continuing to buy dollars when they go on sale. Stocks have begun to show signs of wavering again and I suspect we will see a move back to and through 1,000 on the S&P before too long. We expect stocks to chop lower for the remainder of the year.

EUR/USD:

We are still looking to short this pair above 1.43. We do not want to chase these markets lower but rather fade into rallies as we have all summer. Continue looking at rallies as selling opportunities. We are expecting this pair to grind back into at least the mid 1.30’s before the holiday season.

GBP/USD:

This pair is also a sell on strength. I have been saying for over a year now the UK must adopt the Euro or they risk sinking into the North Sea. Hear me now and believe me later on that one.

USD/CHF:

This pair is a very attractive long below 1.07 I am happy to hold this for some time from this level.

USD/JPY:

Near term direction in this pair will be dictated by the S&P500. If we see a melt down you could see this pair spike higher even though the normal relationship has been to follow the S&P 500. With stocks at a tipping point all Yen pairs and crosses are more dangerous than normal so be warned!

AUD/USD:

This pair did resist out below .85 as we talked about last week. We are now look into sell rallies here as well.

USD/CAD:

This pair is also an attractive long below 1.09. Still looking for a move back into at least the teens.

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Weekly Forex Outlook

Derek Frey — Wed, 26 Aug 2009 07:50:57 +0000

Back to school for the kids and back to work for the rest of us. I always love these next two months or so. We see a huge resurgence of activity in almost all markets which should take an already volatile year and pour gas onto it. So we are clearly expecting things to get nuts in the coming weeks. Energy flows point to a sizable “event” coming in the next 30 days or so. We are using extra caution with all trades until that passes. Look for stocks to continue to be the main catalyst for movement.

EUR/USD:

We did cover our shorts early last week for some decent profits and are now beginning to sell into these rallies above 1.43. We could see a blow of to 1.45-1.46 or so but it would only strengthen our conviction that much lower prices are in the future of this pair.

GBP/USD:

Last week I mentioned we would see rallies back up towards the 1.65 level and we did. We are now also looking for rallies this week to sell into. Anything above 1.64 should be reasonable but the potential for a blow off here is also high so keep leverage low and be ready to fade spikes.

USD/CHF:

This pair is a very attractive long below 1.06. I am happy to hold this for some time from this level.

USD/JPY:

We continue to look for rallies to sell into, anything above .945 is particularly attractive from the short side.

AUD/USD:

We are looking for this pair to find resistance near the .85 handle and are also sellers of rallies in this pair.

USD/CAD:

This pair is also an attractive ling below 1.08. Still looking for a move back into at least the teens.

Questions or comments

derekf@forextradersdaily.com

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