Friday, 30 March 2012

The Month/Quarter end.....

TGIF, my friends!!!

Not too sure about you but I had one heck of a time staying up till 3am, hopefully for all the good reasons! :)

Clearly the past 48hrs, market was selling the currencies for month/quarterly positioning. Most of that flow should be over by now unless they want to deal for value today! I will be watching how the market close as it will provide me some technical leads to the underlying strength of the various currencies for the following period.

Back to the E$.....despite the sell-off in E$ on Wednesday and Thursday, market crept back after Europe's out to close above 1.3300 on both days. I believe market is now caught short, made even more vulnerable with the string of stop loss orders from 1.3310/20 (cleared), 1.3350/60, 1.3400/15/25 and 1.3450. E$'s rebound from the trend line (took several hours of test though) was definitely a relieve for the bulls and this opens up 1.3390/420 to be tested, potentially today!

1.3280/300 to hold with 1.3390/420 solely in focus!
Have a good one there and enjoy your weekend!

Thursday, 29 March 2012

The Crossroad.....

Good morning folks!

Great field day in the E$ as it came off the high of 1.3373 to touch the low of 1.3277 before rebounding to close at 1.3317.

Judging from the past 24hrs price action, it does look to me like we may be in for some boring range consolidation with a slight downside bias into Europe/NY session.

That being said, I feel risk/reward favours buying on dips, though admittedly I have to rate this call at this moment at 5.5/10. 1.3240/60 to hold (1.3200/10 news induced) and 1..3355/75 to cap.

I will be watching A$ closely as momentum has turned up whereas E$ remains neutral. Basing on this scenario, it does suggest a potential near term ceiling for the EURAUD at around 1.2840/60.
E$ 2-hourly Chart
Hopefully the market reveal more signals to me, if not, I can't get too excited at this moment. Time to work on my driver's swing plane? Have a great day, nonetheless....

Wednesday, 28 March 2012

A rally not to be for now.....

Good morning friends, its mid-week already? 

As far as the past 48hrs' rally is concerned, its over for now. The exhaustive burst towards 1.3385 marks the last wave formation and we are due for some counter-directional correction (Titled: More Spillover - Update1  27 Mar12)

While I am bullish the E$ & EURxxx in the months ahead, price action warns caution at this point in time. Failure to stay above 1.3390/420 handle signals insufficient upside momentum and this leaves the E$ vulnerable for downside probe. The month/quarter end close this Friday will provide more hint.

For today, I see 1.3360/70 to cap and 1.3240/60 (1.3210/20 news induced) to hold and I would sell into the rally. (7/10)

It takes a daily close above 1.3420 to invalidate the near term bearish view of E$.
EURUSD Daily Chart
By the way, one must note that if I am E$ & EURxxx bullish, it does not necessarily mean I am USD negative. Remember, E$ is the new USD......  its a complex relationship! 

All the best and don't forget to enjoy those adrenaline rush!
In all trading, managing your risk must always be your top priority. Getting the direction right is but only 33.33% chance of a profitable trade!

Tuesday, 27 March 2012

More Spillover....

Good morning friends!

Don't you love it when market exceeds your conservative expectation? (The Spillover.....      26 Mar 12)

Given the way E$ has unfolded till now, it has signalled a potential firm close for March and for Q1, which also mean exciting weeks ahead in Q2 for E$ bulls.

Recent high of 1.3486 (before LTRO was announced) is within range now (one more hurdle) and will be the target as I believe decent size stop loss orders should lurk above.

Before we get all psyched up for that elusive bull run, E$ has to clear the next tough hurdle at 1.3390/420 which I recommend the longs to take some profit first. Let the market clear that resistance before re-joining in the next station. This is one time where I will buy on strength and not on dips.

Will update again if anything. Have a great Tuesday!

Update1: 1.3385 high so far, objective met for now. Momentum has turned down and the resistance band 1.3390/420 will hold for this round. 1.3360/70 to cap now and expect a correction back towards 1.3240/50 into tomorrow, no positions just yet.

Monday, 26 March 2012

The Spillover.....

Good morning Monday! This week can be a significant one as we close the month and quarter this Friday. E$ survived the1.3200 pivot on several occasions and finished the week firm. This suggest we should have some spillover momentum to challenge 1.3300 again and I hope to see 1.3380/400 region tested this week.

Just for your consideration, EURxxx should be in a consolidation mode after the sharp rally and this will put brakes on any possible powerful rally in E$. Attention is turned back to AUD & NZD (hint).

For today, I am not expecting a big range but nonetheless, we should still be presented with intraday trading opportunities.

German IFO at 16:00 will be the only known reason for the E$ to get excited today. 

We may be caught within 1.3200/20 to 1.3300 (barrier option, not too sure when it is expiring).
So trade the range on first test. (6/10)
Have a great week ahead!

Friday, 23 March 2012

The Outperformer.....

TGIF, my friends!

Market unfolded as expected yesterday plunging to a low of 1.3133 before closing at the 1.3200. Despite the overnight bearishness, E$ has not closed a day below this pivot level to date this week. This signal further reinforces the bullish undertone.

As I am typing, E$ is clearing the first bunch of buy stop orders at 1.3210. Heard that the next clusters are at 1.3230/35 and 1.3290. Meaningful downside stops were pretty flushed after yesterday's sell-off. Based on this scenario, it complements my technical outlook.

Momentum has turned up and I shall maintain my Buy dips strategy. 1.3150/70 to hold (1.3100/20 news induced). Meantime, 1.3290/300 is the level to watch but 1.3330/40 should cap for today though I don't think we are going to see this level today. (7/10)
All the best and have a great weekend!!

Thursday, 22 March 2012

Mirror image?

Good Thursday, folks!

Hopefully, my 2 updates yesterday helped you in one way or another.

Seems like this is going to be a longer transit than expected as E$ was rejected at the 1.3290 level leaving us with a potential mirror image or in simple technical terminology, double top. This has increased the probability of further price pressure towards the 1.3110/40 band before any meaningful recovery. 

Ironically, the very reason for E$'s recent bullishness ie. firm EURxxx are already losing upside momentum and should be due for a correction lower. 

The last element to create the perfect storm should be the stop loss orders at 1.3160 placed by short term stubborn E$ longs.
For today, maintain short term bearish E$ with 1.3230/40 to cap (1.3280/90 news induced) and 1.3110/40 to hold. Strategy: Sell rally (7/10)

Be nimble, pride does not pay the bills.....

Update1: Took profit on short E$ and EURAUD. Looking to turn net long on the E$ around 1.3110/20.

Wednesday, 21 March 2012

Bruised but not hurt.....

A currency with ambition, plans its advance carefully.

I outlined 2 possible scenarios yesterday and E$ chose the healthier choice, for obvious reasons. The only one thing was the correction was slightly deeper down to 1.3172 but it finished the day with a firm close at 1.3224, comfortably above the pivot.

Some of you questioned the strength in E$ as it is indeed difficult to reconcile with the fundamentals. If I may take you back to my earlier blog "Its my turn, said EUR" (23 Feb12), I mentioned that EUR was in for a multi-week bull run and it is materializing. This explains the underlying strength in E$ as it gets support from mainly the crosses against commodity currencies ie. EURNZD, EURAUD & EURCAD. Coincidentally, scenario (b) is unfolding now :)
As I have guided yesterday, E$ is eyeing 1.3300 which in my opinion is a transit point rather than a destination. I shall be watching 1.3400/20 for now, 1.3600 never left my mind.

All the best!

Update1: Just take note that momentum has turned down for the hourlies which suggest E$ may test support at 1.3200/20 before higher again. Profit taking in the EURxxx is evident. But no change in the overall bigger picture.

Update2: Stops built up at 1.3160 just under yesterday's low makes E$ vulnerable. Be mentally prepared, if 1.3200/20 support gives way, market should go for the that level. However, 1.3140/50 should hold for reversal.

Tuesday, 20 March 2012

E$ bulls dominate again....

What a great way to start a Monday!  

E$ finally broke out of its lackadaisical consolidation during the NY session, stunned many by its powerful surge as it took out stop loss orders on its way to print 1.3265 high before settling around 1.323ish.

Simplistically speaking, a close above DMA would imply underlying strength in the E$ with 1.3200 being the pivot. 

Reckon for the next 24hrs, it is probably eyeing previous high of 1.3290, which coincidentally is near to the 61.8% mark of 1.3300. Or, it can spend a full 24hrs consolidating within 1.3200-60 (which is healthier) before taking 1.3300 out and right up to 1.3380/410. Whichever scenario, it is E$ bullish.

In all things, it is not infallible but will take a close below 1.3200 to weaken the picture and 1.3130 to invalidate this bullish view.

Go out there and enjoy the ride!

Monday, 19 March 2012

E$ bulls charging on......

Good Monday morning, my friends.

E$ bulls came charging back in style as expected on Friday, closing the week with a bullish piercing pattern. Having bounced strongly off 1.3000, it seems like the market is tempted to go another path with least resistance ie. to retest close to recent high.

Before we get there, we have to contend with a couple more hurdles which I will share as we get along through the week.

For today, E$ should consolidate Friday's gain with 1.3140/50 to hold (1.3090/20 news induced). 1.3230/40 band should a level to be reckoned with for now.

Market bias has turned and my R/R is favouring Buy dips strategy.

I believe this week should be another rewarding one and wish you all the best.

Learn to move on fast for yesterday's right call is but history now

Friday, 16 March 2012

EUR$ disappoints bears.....

Indeed E$ held 1.3000 and rallied to a high of 1.3119 to clear out stop loss orders as guided in my update yesterday. It held on to most of its gain to close a bullish piercing pattern candlestick. This suggest strong underlying which should have momentum to take E$ higher today to continue with its short squeeze.

My initial take was for E$ to break 1.29738 (previous low) but 1.2950 to hold and yield rebound. That was why I admitted yesterday I was not very bearish the E$ even when the market was threatening the 1.3000 support. Risk/Reward does not pay to be heavily short there. 

Expect correction to be shallow, even 1.3060/70 already formed good support. We should see firm upside price action towards 1.3210/30 through Asian into NY session.

By the way, I should be out bringing my son to the dentist and...... buying the new iPad!!!! 

All the best and I shall update, if any, in the later part of today!

Update1: E$ price action did not materialize as expected and momentum has turned down. Technical signals have become somewhat mixed. Probability of seeing higher E$ has decreased. Will stay out and watch for now. 5.5/10

Thursday, 15 March 2012

E$, the new USD...

Good morning friends! Market provided us one of the best trading opportunities as currency pairs broke out of its sleepy range.

However, E$ was caught inbetween crossfire a good part of the day as the EURxxx (EUR crosses) start to get bullish.

Let me explain myself.... eg. as AUD$ & NZD$ were falling, many would expect E$ to weaken along. But it didn't and instead stayed flat to going the opposite direction. This is the result of directional cross play ie. the EURNZD & EURAUD.

For most of today, I would expect counter directional correction with the NZD & AUD staying relatively firmer.

Heard of a barrier option with strike at 1.3000 along with strong demand should hold this level for now. E$ should be range trapped with 1.3055/65 to cap (1.3080/90 news induced).
Though I see the previous low of 1.2973 retested, I am not exactly very bearish the EUR.

For today, unless you are very disciplined, go light on the long side and I maintain sell rally on currencies.

By the way, I do hope you have benefitted from tip on GBPAUD  :)

All the best and have another great trading day (Friday should be more interesting).

Update1: E$ price action suggest strong underlying, probably motivated by the stop loss orders above 1.3090-1.3110. Not surprised if it spikes up later but 1.3130/40 should cap.

Wednesday, 14 March 2012

GBPAUD... The Perfect Mirror Image?

Just to share an interesting chart here, however you want to interpret it  :)
Are we there yet? 

All the best! 

Leaning closer to.....

Good morning folks!

E$ went on a roller coaster as it swung up to the high of 1.3191 and then spent the rest of the day probing the downside to 1.3053 before settling weaker below the 50DMA forming another bearish engulfing candlestick. This should put E$ under pressure as it sits just above the critical pivot at 1.3050. Probability is further skewed towards 1.2973 being retested, as mentioned on Monday, in the coming days.

Currently hearing good demand (could be EURxxx related) lining up from 1.3000-50 and stop loss orders built up above 1.3110/20. In current environment without much market moving announcements expected, E$ may push higher for the stops before lower again. 1.3050 to hold for Asia, 1.3130/50 to cap.

E$ will need to take 1.3191 out to turn the short term bearish sentiment around. 

But whatever you do, go light if you want to trade against the headwind. I maintain sell rally strategy for now.

All the best and have a good one trading!

Tuesday, 13 March 2012

Dead Cat Bounce?

What now..... market turning focus back on Fed going for QE3 (lite or whatever)? This seems like the best fundamental excuse to trigger a short squeeze in currencies for the next couple of days. For those who are ambitiously holding on to your shorts, just be careful though I still see currencies breaking lower following this correction.

Like I mentioned yesterday, I expected a counter-directional move... it started and should possibly last till post FOMC. 

E$ led the pack as the EURxxx was lending support yesterday. But we should see softer EURxxx as other currencies correct higher. 1.3090/110 to hold and as I type, E$ has already spiked to 1.3170. 1.3210/20 to cap (1.3240/50 news induced).

Have a great trading day and I will update again later.

Update1: Don't think the short covering in the currencies is over yet. Not deep enough to take the weak shorts out yet. Heard on E$ 1.3100/1.3200 option expiring NY cut, so market should stay within the range before higher toward 1.3220/30.
Hearing large sell order around 1.3300.

Monday, 12 March 2012

The Week After.......

Good morning folks!! New week, more excitement?

Rejection at major resistance levels in currencies last Friday was a strong signal that the bears are still in control. Affirmation that EURxxx might have bottomed out concomitantly suggest softer price action in the higher yielders ie NZD n AUD. 

Still awaiting the last bastion.... USDJPY for confirmation signals that the recent run up has hit the ceiling. If it did, timing for all would coincide and we should be mentally prepared for a pickup in momentum in risky assets being sold off.

E$'s weak close last Friday formed an engulfing bearish candlestick and we should expect further pressure especially today. Don't think support at 1.3050 can hold and we should see E$ challenge 1.2973 (previous low). But 1.2950 may hold for now.

All the best and have a great week trading!

Update1: Expect short covering which should take E$ back to 1.3150/70 region (1.3200/10 news induced) before lower again. The firmer EURxxx is lending support to E$ for now. Would welcome any rally to sell into. 
Realized that I may have given all the impression that 1.2950 is today's target. Actually its my weekly target :)  Have an enjoyable one!!

Friday, 9 March 2012


Great move in the E$ overnight as it rebounded strongly to the target of 1.3290.

However, the push towards high of 1.3291 seemed exhaustive as bearish divergence emerges. Technicals are suggesting that E$ should move into consolidation and I expect market to hold 1.3220/40 (see chart) to 1.3280/90 during the Asian session. 

That being said, the underlying momentum remains strong at this hour of writing which prompts me to believe that E$ may want to test higher towards 1.3330/40 during the Euro/NY session (probably triggered by the US job data). 

I will not discount 1.3380/90 but this level will be a stretch following yesterday's price action and I will be keen to sell at those level for the day.

Stay nimble as I expect choppy price action. Last reminder, its full moon week!

All the best and have a great weekend ahead!!

Update1: Underlying momentum starting to turn neutral which tilts the R/R to sell rally. If one chooses to trade the current range, do not get aggressively long in the E$. Remember, its all about probability! 
I would rather head out to the IT Show now than to be tortured by the 10pip range!!

Update2: I have a strange feeling something is brewing..... R/R favoring the short side in currencies and will not discount the lows of this week to be retested. 

Thursday, 8 March 2012

Neutral ground.....

Indeed E$ traded within the guided range yesterday without much fanfare. 

Basing on the past 48hrs price action, E$ downward momentum has pretty much waned and has turned neutral to slight bullish. For now, market is comfortable mark timing within 1.3100/20-3180/00 and awaiting for an impetus to break out either way, probably during the Euro/NY session or even into Friday's US employment data. Can't get too bullish near the top end of the band for now.

To certain extent, I believe the E$ at current level has already priced in a possibility of a negative outcome from the Greek PSI and the realization if happens would trigger an initial sell off toward 1.3050/80 before a strong rebound toward 1.3200 and potentially 1.3260/90.

Some useful information I gathered so far..... Asian reserve manager interest around 1.3100 and stop loss orders below 1.3080.

Do take of note of BOE, ECB and BOC announcements this evening.
All the best!

Update1: The impetus came earlier than expected and we have our breakout and up!!  Apparently, there was some news on the optimism over the Greek PSI take up and E$ wasted no time to chase its target of 1.3260/90.
Heard strong demand at 1.3160 for now. Enjoy the ride!

Wednesday, 7 March 2012

Humpty Dumpty had a great fall...

So the fundamental triggers for this risk aversion seem to be:

  • Fed's signal to an end to QE 
  • Slowdown in BRIC economies, notably China
  • Not talking about Europe anymore!

Does that mean cheaper commodity prices in the near future, at least for a while? Can't wait for crude price to collapse.... wink!

This week will be interesting as the mix of full moon and increasing correlation amongst asset classes should come out with a potent concoction!

Before I start, let's thank Temasek for that signal yesterday... smart money indeed!

E$ has trigger a bear signal and I have to claw back on my bullish view for now (delayed). With that signal, it opens up scope for E$ to retest previous low 1.2973.

However, in a risk off environment, EURXXX will benefit as carry trades are being unwound. Expect EURXXX to correct lower over the next 48hrs before rebound. Will watch for buy signals. EURAUD & EURNZD will be the fun pair.

For E$, may see early pressure following yesterday's sell-off. 1.3070/80 to hold on first dip and 1.3160/80 region to cap. Be careful of whipsaw price action!

When in doubt, cut out, step back, and re-assess. Never be held hostage by a bad position. There will be lots of other opportunities.

Update1: Waning downside momentum in the currencies suggest consolidation with an increase in probability of short squeeze. 

Tuesday, 6 March 2012

Follow the leader....

Just learn that Temasek has sold 64.2mln shares of Sembcorp Marine. Not about to dwell into the percentage but is this a totally commercial decision or a case of professional money getting out ahead of a potential spike in risk aversion?

Of course the other observations have been:
  • selloff in precious metals
  • relatively firmer USD, EUR, GBP & JPY
  • softer NZD & AUD
No one can confirm this until it happens but tell tales must not be ignored and prudence guides us to moderate our decision-making.

Indeed E$ unfolded as forecast yesterday. Tested 1.3160 during Asian hrs and bounced off to test the high side during the NY session. Another 2 pairs of EURNZD and GBPAUD had a great field too! :)

So what's in store for us today?
11.30am, RBA rate decision will inject the one and only boost of testosterone into the market. Don't think they will hike, many are expecting no action but the surprise will be a cut or a dovish enough outlook. 
Has the market not already geared for less optimistic outlook for Aussie rates or is this only the tip of the iceberg? Personally, I feel AUD is at the stage where it should be more vulnerable to negative news.

Back to the E$.....

Consolidating to build a base around 1.3200 (1.3160 should hold for this round). Still feel more upside bias with a test of 1.3280/90 (1.3350/60 news induced) amid choppy price action. EUR is seeing demand from the firmer EURXXX rather than a direct buy. Enjoy while it last for now.
Having said the above, I will not discount the possibility of E$ probing lower towards 1.30ish in the later days before it resumes its bull trend with target of 1.4000.

To be very honest, its murky today and I should be scalping and patiently await to re-enter long EURNZD.

All the best and will update as and when if there is anything exciting.

Update1: The conclusion of the RBA statement left open the possibility
of further easing if the economy weakened: "With growth expected to be
close to trend and inflation close to target, the Board judged that the
setting of monetary policy remained appropriate for the moment. Should
demand conditions weaken materially, the inflation outlook would provide
scope for easier monetary policy......"
AUD negative.....

Update2: Actually basing on EURXXX, the EUR correction on the downside may probably be over and resuming its uptrend. Will continue to monitor for more signals.

Update3: Sell-off in AUD & NZD should take a break for now.

Monday, 5 March 2012

The Eventful Week....

Good morning folks, its Monday again!!!

Hearing news Greece needs 3rd bailout? Boy, not too sure about you but I am getting quite sick already!!!

On the technical side.....

A bearish piercing pattern on the weekly chart increases the probability of further pressure in the E$ this week. But the easy money on the short side is nearing the tail end.

Expect early weakness toward 1.3150/60 but reckon this level to hold for now (1.3070/90 news induced). Maybe firmer price action into Europe/NY. However, 1.3230/50 1.3250/80 to cap for today. 

Note that this whole week will be dotted with noteworthy events throughout, so do take note of the timing of the announcements lest getting caught in news induced volatility.

I have taken profit on all positions ahead of targets. 

Weak heart? Go for tighter range trade (don't get too ambitious) BUT with stop loss at all times!

All the best and have a great week ahead!!

Will provide updates (if any), throughout the day if new signals emerge.

PS: Have not forgotten the magnitude of the sell-off in the precious metals last week. Will be wary as this can be tell-tale of something bigger to come..... either way! Before I end, take note that it is a full moon week, so expect the unexpected! (wolves howling in the background)    ;)

Update1: NZDUSD looking relatively more vulnerable for 0.8150 (Put on radar)
E$ stop loss orders below 1.3180 to 70 and above 1.3250

Have a bad feeling we may have a spike in risk aversion in the near future.

Friday, 2 March 2012


TGIF my friends from around the world!

What now after the announcement of the LTRO and Bernanke? Clearly it has taken some steam out of the E$ and left many of us wondering the fate of this currency. Is the past weeks' bull run over and are we heading back to 1.2000?

I wish to think that we are in the Skepticism stage of the bull trend..... my view has not changed as long as certain technical considerations are not compromised yet. Guess it would have been a whole lot easier if the E$ had closed stronger for February. But wouldn't that have quickly changed the sentiment overnight? Tell-tales like this would suggest to me that E$ may want to probe for a stronger support level and consolidate before it springs itself to the next step, which is into the 1.35-37 band.

Past 24hrs price action suggests that E$ is still trying to find bottom amid bullish divergence signals emerging. That being said, I am mentally prepared for another leg towards 1.3230/60 before a meaningful rebound. Coincidentally, I gathered that there is a pocket of stop loss orders below 1.3250. 1.3330/40 to cap during Asian hours.

For the next 48 trading hrs, I see E$ consolidate between 1.3230/60-1.3390/410 with choppy price actions. No major breakout expected.

I took a small loss on my long E$ amid the uncertainty but am holding on to my tiny long EURCAD for now. But would like to re-establish long E$ if level is reached today probably during European/NY hours. Meantime, going for some guerrilla warfare trading  :)

Strategy for the day: Risk/Reward favours buying on dips.

All the best and have a great weekend.

Update1:  Covered the short E$ at current 1.3255 and await lower 1.3160/80 for the bounce.
Gathered there are more stop loss orders down to 1.3320 and 1.3280.

Update2: Cut long EURCAD @ 1.3075 and turned short for 1.2980.

Update3: Went small short on NZDCAD for 0.8100. Staying nimble on all positions!

Thursday, 1 March 2012

A Stomach-Wrenching Day......

Anyone who was expecting a repeat of market rally post Bernanke's testimony was in for a rude shock!  

Indeed 1.3480 level resisted E$'s advance and left the downside vulnerable as market went for stop losses below 1.3360 subsequently. I took profit too early on the E$ short.

Turned long E$ again after Bernanke spoke but price action at NY close did not give me much comfort. Stop loss placed at 1.3290.

Currently, long E$ and EURCAD and keeping fingers crossed as I try to get some sleep! :)

E$ 2 hourly chart

Update 1: E$ remains vulnerable below 1.3350 for now but EURXXX providing good support. Any negative news could trigger another leg to test next strong support at 1.3270. Resistance band at 1.3390/410.

Holding on to my long E$ and EURCAD positions.

Scenario1: Regain and hold 1.3350 in the next 2-3hrs for a test of 1.3400 into NY

Scenario2: News induced dip to test trendline at 1.3250/70 support before recovery (low probability)