10:35 GMT (Global-View.com) for July 31 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2288)
One more day of calm before the storm (although it is month end so watch out for flows around fixing times) as markets remain on hold awaiting key events, the FOMC meeting on Wednesday and ECB meeting on Thursday. This suggests another day like Monday where the focus is likely to stay more on EUR crosses with spot trading driven by these flows. This has created a tug-of-war market with currencies like the AUD, CAD, etc pulling one way and the EURUSD the other. As noted yesterday, 1.2250 will set the bias while within 1.22-1.23 (overnight range has been 1.2249-1.2303). If this was a EUR cross weathermap there would only be clouds but while above 1.22, there are peaks of sun.
Re the FOMC, from what I read, expectations of QE3 at this meeting seem to be the longer shot call even though it is a risk but a dovish statement is expected in any case. ECB is the key focus this week and we will see how much power Draghi has after his emphatic statement last week.
Forecast range:1.2235-1.2330
GVI Forex Jay Meisler 10:22:50 GMT - 08/01/2012
10:25 GMT (Global-View.com) for August 1 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2313)
If you look at the outlook for the FOMC and ECB meetings + the US jobs report on Friday, it is hard for me to suggest a risk on reaction as there seems a greater risk of disappointment than the more optimistic expectations being met. However, price action today suggests a risk on day as the market stays on hold awaiting these key events. Regarding the meetings, a more realistic assessment says the FOMC statement will be dovish (e.g. extend the no rate hike guidance to 2015) but no new QE at the meeting (forecasts are calling for a greater QE risk in September) while the ECB will have a hard time fulfilling the lofty expectations raised by the Draghi comments last week. Between the two, the ECB meeting is the one that will move markets.
The EURUSD, meanwhile, extended its trade around 1.23 to 5 days in a row today, suggesting a break of this pattern will signal the next directional move. Given what I see as a disappointment risk, you would think 1.22 would be the focal point rather than 1.23. One reason may be the focus has been more on EUR crosses than EURUSD. In this regard, EURUSD is geting some support today from a firmer EURGBP after weaker UK data. In any case, expect positioning for the ECB meeting to be the focus once the dust settles on the FOMC decision. Meanwhile, expect a cautious range ahead of the FOMC today.
Forecast range:1.2220-1.2380 (wide due to the FOMC meeting) -- note, my 1.2335 range top posted on the Forex Forum
overnight capped the upside.
GVI Forex Jay Meisler 10:29:26 GMT - 08/02/2012
10:20 GMT (Global-View.com) for August 2 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2273)
Most of the talk has been about a risk of an ECB disappointment yet the EURUSD has managed to recover ahead of it. This is still a risk but the price action has added an element of caution to an already cautious market. To keep it simple, watch 1.23, it will set the tone following the meeting. See below for the Weathermap I posted last night on GVI Forex
With the FOMC producing no surprises (although the easing addicts were disappointed), the focus now shifts to the ECB. Only the most ardent optimist would have high expectations for the outcome as Draghi raised them too high to be fulfilled given the Bundesbank obstacle to bold measures. The best that probably can be hoped for would be some sort of bond buying announcement by the ECB (e.g. SMP, use of EFSF) with the carrot held out for more measures down the road (or possibly a rate cut). This suggests a risk on the EUR downside but we have to see what is said and how much is discounted.
To keep it simple, 1.23 has traded 5 days in a row and see if the pattern is broken. A break of this 5 day pattern would be bearish and shift focus to the pivotal 1.22 level, which will would then set the tone aftet the ECB meeting (sub-1.22 would be needed to bring back the clouds). 1.2250 sets the tone while within 1.22-1.23.
Some levels to watch (Wednesday's low 1.2218 - tested Thursday so a double bottom):
200 hour mva (yellow) currently 1.2207 -- updated: currently 1.2213
Using 1.2041-1.2390,
1.2216 = 50%
1.2174 = 61.8%
1.2170 was last Friday's breakout level on the one hour chart
On the upside, watch 1.23 to see if it prints again. 1.2336 was Wednesday's high and the high for the week.
Feel free to post a comment.
GVI Forex Jay Meisler 13:15:34 GMT - 08/02/2012
From the Weathermap (low was 1.2173)
Using 1.2041-1.2390,
1.2174 = 61.8%
1.2170 was last Friday's breakout level on the one hour chart
GVI Forex Jay Meisler 13:23:26 GMT - 08/02/2012
How do you define whipsaw - look at the 1 hour chart
Horizontal line is 1.2170
GVI Forex Jay Meisler 10:52:22 GMT - 08/03/2012
10:50 GMT (Global-View.com) for August 3 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2280)
I spent the week talking about a risk of disappointment, both from the Fed and ECB, and both came in even below the lowest expectations. However, anyone who told you that trading the ECB decision was a slam dunk is on something as the price action, even with hindsight, is almost too science fiction like to describe. This sets the stage for the key US employment report, which may spark some movement but it is hard to see much appetite for aggressive trading after the whipsaws over the past two days.
Key level to watch is 1.22 as this will set the tone going forwards. The move back above it today has cooled some of the bear fever This has put 1,2300, which has printed 6 days in a row is also 61.8% of 1.2405-1.2131 back on the radar. After yesterday's melt down it is hard to believe 1.23 is back in focus, a level that needs to hold to keep the upside in check.
Forecast range:1.2315-1.2205
GVI Forex Jay Meisler 10:55:13 GMT - 08/05/2012
10:50 GMT (Global-View.com) for August 6 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2384 Friday late close)
A rally based on hope? This is the way I would describe the way we ended last week: 1) Hope that Draghi will be able to follow through on his plan to ease the pressure on peripheral yields; 2) Hope that QE by the Fed is still on the table after a better-than-expected NFP for July. That is a lot of hope as Draghi needs to overcome German resistance to bond buying and timing for Fed QE is questionable so close to the election, especially if data does not provide a smoking gun for further easing. So watch the headlines and watch the data as markets bet on hope.
In any case, you have to honor the price action as the EURUSD closed last week at the highest level in nearly a month. As the daily chart shows, a key daily trendline (1.2340 on Monday) has been broken although the major channel top is still well intact. An indicator to watch is the 50 day mva (purple line – 1.2408), which has traded below since the start of May, when the downtrend started. Note this indicator has tracked the trendline nicely and would need to be established above to confirm the trendline break. There is little above it until 1.2693 and 1.2747, with 1.25 standing in in the way. 1.25 is probably most important to watch going forwards as it is a key psychological level. Initial resistance is Thursday’s pre-Draghi press conference high at 1.2405.
When the dust settles, I still see a choppy August range developing but first the hope rally needs to play out. Pain trade would be to squeeze out the shorts so watch 1.2400-10 as this encompasses the key levels cited above. If this level holds, then 1.22-1.24 would be the range. If not, then perhaps 1.22-1.25 or 1.22-1.27. One word of caution, August is the second thinnest month of the year and we have already seen the effects with 3 days of vicious whipsaw trading. If there are stops above 1.24, the Aust/NZ Monday start to the week session would be an inviting place to run them.
As always, feel free to comment.
GVI Forex Jay Meisler 10:21:31 GMT - 08/06/2012
Pretty good Weathermap so far (see below):
'- Stops runearly on
- 1.2340 (former daily trendline) so far checking the downside
GVI Forex Jay Meisler 01:40:09 GMT - 08/07/2012
01:30 GMT (Global-View.com) for August 7 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2395)
As I wrote in the August newsletter, this month is a waiting game and what we are waiting for is becoming more apparent as the market starts to take on a common theme. In this regard, the key focus remains on Spain as political forces seem to pushing towards a request for aid, which would satisfy Draghi’s conditionality requirement and provide political cover for ECB bond buying. However, there seems to be no immediate rush for this as pressures have eased with peripheral yields falling back from crisis levels and global equity markets continuing a risk on mood.
This has put the EURUSD on a better footing after Monday’s support at the former daily trendline (1.2325 on Tuesday) although it did not close above its 50 day mva (1.2406 = purple line), which would be needed to encourage a run at 1.25.
In the meantime, watch 1.24 as there was a battle there Monday and it will set the bias while within 1.2350-1.2450. On the downside, support is at 1.2325-40 level. In any case, I am still looking for a range to develop, question is whether it is above or below or around 1.25. Watch stocks on Tuesday as there was a close correlation on Monday.
GVI Forex Jay Meisler 10:26:39 GMT - 08/07/2012
Forex Weathermap update (scroll gown for Weathermap report):
Still focused on 1.24, which sets the tone while within 1.2350-1.2450 as there has so far been an inside day. When in a tight range (1.2276-1.2432 so far), small moves can have an exaggerated impact on sentiment. The range is too tight to last though but dependent on USD weakening if EURUSD is going to make a run at 1.25.
For a strong BOD (Bid onips) bias, 1.24 would need to become support.
Retracement levels:
1.2446 = 61.8% of 1.2693-1.2041
1.2477 = 61.8% of 1.2747-1.2041
GVI Forex Jay Meisler 00:14:35 GMT - 08/08/2012
00:15 GMT (Global-View.com) for August 8 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2385)
Someone drew a line in the sand at 1.2450 (also a rumored options barrier) and market could not get through it as 1.2442-43 (2-day double top) stood in its way. This leaves the EURUSD consolidating with the current focus on 1.2350-1.2450 where 1.24 sets the tone. This range is too tight to last long but while within it 1.24 will set the tone.
On the downside, supports come in at 1.2373 (Tuesday low), 1.2348 (23.6% of 1.2041-1.2443), 1.2340 (Monday low) and 1.2310 (former daily trendline, which checked the downside on Monday). On the upside, it is capped as long as 1.2450 stays untouched to keep 1.25 off the radar.
In any case, market may need a breather as fx and equities diverged during the US session, suggesting the risk on mood may need a breather as well. With no key news events this week, there seems little in the way of a catalyst so keep an eye on equities on Wednesday to see if they adjust to a less risk on mood in the fx market.
Watch GBP on Wednesday as the BOE is expected to slash growth, inflation forecasts (has been talked about all week)
Weathermap followup (this is an extract - full update can be seen on the GVI Forex
...A friend sent me this one hour chart (see above), which is calling for a consolidation range with 1.2335 as the bottom. As noted, 1.2310 is most important using a daily chart.
GVI Forex Jay Meisler 02:00:57 GMT - 08/09/2012
02:00 GMT (Global-View.com) for August 9 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2380)
I wrote at the beginning of the week that this was a market based on hope. Perhaps a better word would be a market based on expectations. The expectations are for the Fed to deliver on QE3 and that Draghi can deliver on his plan to protect the EZ from breaking apart. This suggests that the downside for risk (and dollar upside)should be limited, even if markets correct as attention is looking forward to Bernanke’s Jackson Hole speech in late August, where the QE addicts are hoping he sends a signal for the next round of bond buying. Thus, Bernanke holds the risk card in his hand and it will be a little over 2 weeks until we see if he plays it. In the meantime, expect choppy ranges to persist as thin August liquidity remains a factor with key events lying ahead towards month end and into September.
As for the EURUSD, the former trendline (1.2292 on Thursday) continues to provide support but is fading out of the current range. My focus is on 1.2350 as a bias indicator while within 1.23-1.24 with support/resistance currently outside of this range. Last week’s average daily range was 163 pips vs. 83 pips so far this week, which is a sign that the volatility last week took a toll.
GVI Forex Jay Meisler 11:01:26 GMT - 08/09/2012
Weathermap update --
It is all about EUR crosses (weaker) that are weighing on the EURUSD. Price action is consistent with my call for an August range with risk of US QE3 limiting the USD upside in general.
There is little worth noting between 1.23-1.24 now that stops were run below yesterday's 1.2326 low. Supports are below this level at
1.2292 = former daily trendline (note checked the downside on Monday)
1.2289 = 38.2% of 1.201-1.2443
1.2259 = 20 day mva
1.2242 = 50%
On top, initial resistance is at 1.2326, blocks neutral 1.2350.
GVI Forex Jay Mesiler 12:03:58 GMT - 08/09/2012
Add these:
Re retracements, if you use 1.2131-1.2443
1.2287 = 50%
1.2250 = 61,8%
GVI Forex Jay Meisler 00:41:33 GMT - 08/10/2012
00:30 GMT (Global-View.com) for August 10 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2294)
Maybe we are back to the tale of two uglies with the fx market looking for places to park money other than in the USD or EUR. It is now the EUR’s turn to take the heat and this can be seen in its crosses (weaker), led by flows into commodity (led by EURCAD) and Skandi currencies. This has cut short the EURUSD rally in a market driven more by portfolio flows than spec trading in a thin August market that is in a holding pattern ahead of key events at the end of this month and into September.
This leaves the EURUSD on the defensive although well within its current 1.2041-1.2443 range, which is consistent with my view of a range rather than trend during August.
While within 1.2250-1.2350, look for 1.23 to set the tone. Downside should be limited as long as 1.2242-50 holds. On the upside, 1.2320-30 blocks a return to 1.2350.
Levels to watch:
1.2264 20 day mva (Thurs low 1.2266)
1.2250 = 61.8% of 1.2131-1.2443
1.2242 = 50.0% of 1.2041-1.2443
GVI Forex Jay Meisler 10:31:45 GMT - 08/10/2012
Weathermap Update --
It is hard to suggest much on an August summer Friday although price acti=n suggests a tilt towards "risk off." This leaves the EURUSD at the mercy of its crosses where it remains generally soft although partially offset from a bounce in EURAUD.
Stalemate:
Otherwise, as noted last night (see prior post), 1.23 sets the bias while within 1.2250-1.2350.
On the other side, 1.22 protected as long as 1.2242-50 holds.
So, currently two-way trade while within 1.2250-1.2300 with a negative bias while below the upper end but support as long as 1.2250+. Overnight range (1.2261-1.2301) is too tight to last for long.
GVI Forex Jay Meisler 14:00:22 GMT - 08/10/2012
Low was around 1.2242 - 50% (see prior two posts where this level was highlighted)
GVI Forex Jay Meisler 22:37:22 GMT - 08/12/2012
22:345 GMT (Global-View.com) for August 13 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2288)
This continues to be a market on hold awaiting key events later in the month and into September but one difference from last week is this week has a more active economic calendar. In this regard, a key focus will be on US data, which has been surprising more to the upside of late but not enough to negate hopes that Bernanke will signal QE3 when he speaks in Jackson Hole later in the month. This has been supportive of risk and equities but in thin summer liquidity.
For the week ahead, Monday is likely to be an inconclusive day, suggesting ranges, as it is a quiet day for data. Starting Tuesday, an active economic calendar begins. For the first time in several weeks, there should not be any stop hunts at the opening.
The best I can say at this time is that 1.23 should trade for the 3rd day in a row. This level seems to be acting as a bias indicator while within 1.2250-1.2350.
GVI Forex Jay Meisler 10:36:08 GMT - 08/13/2012
As noted in this report last night:
The best I can say at this time is that 1.23 should trade for the 3rd day in a row.
This has worked out and in fact, 1.23 has now traded 10 out of the past 13 dats.
Looking at the one hour chart (see above) shows the 1.2326 level as a key one since it was the breakdown level for the mvoe to 1.2242 last week. This has been tested (high 1.2329) and a level that would need to become support to expose 1.2350 again. Otherwise, focus stays on 1.23.
Note the 200 hour mva (flatline), which suggests a lack of momentum at this time.
There is no news to account for the EUR rebound today (note crosses). Wirth noting is last week the high for the weekw as set on Monday ("Monday Effect"), making today's low at 1.2261 important in this regard.
GVI Forex Jay Meisler 01:16:08 GMT - 08/14/2012
01:15 GMT (Global-View.com) for August 14 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2345)
I am still looking for an explanation for EUR strength on Monday as most of the news was negative for this pair. Well, they do not call these the Dog Days of August for nothing as it does not take much in the way of flows to have an exaggerated impact. This is especially true in a summer market that is on hold awaiting key events later in the month into September.
If you look at the price action of late, moves outside of 1.23-1.24 have failed on both sides, suggesting 1.23 would need to become resistance or 1.24 become support to break this pattern. Otherwise, expect more chop in a market that seems more focused on EUR crosses than on the USD at the moment.
On a daily chart, there are higher lows (1.2041 => 1.2131 => 1.2242) but this would only translate into a trend if 1.2443 would be taken out. On the other side, a break of 1.2242 would end the pattern of higher lows.
The Economic Calendar picks up on Tuesday and that should spark some movement in a market starved for news. However, unless there is a smoking gun report that tilts the scale for QE3 either way, reactions to data should have a limit.
00:40 GMT (Global-View.com) for August 15 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2327)
The question I have is whether the US stock market can continue to rise if hopes fade for the Fed to provide a dose of QE3 Kool-Aid in September. While we still have to wait until Bernanke speaks in Jackson Hole for a clue, strong retail sales reported on Tuesday has dampened hopes for QE3. The hope seems to be that the ECB will provide the next QE fuel but even if Draghi gets his way, it is doubtful the Germans will sanction him going all in with an open wallet like the Fed has done.
This leaves EURUSD on hold as we wait for key events to unfold and contained within the current range. What is that range? Currently it is 1.2242-1.2443 but 1.2150-1.2450 seems to give it wiggle room. In any case, the current range within 1.23-1.24 will not last as it is rare for it to trade on one big figure (e.g. 1.23xx) for long. Odds favor a test of 1.23 as long as it stays below 1.2350.
For Wednesday, the focus will again be on economic data and while there is a full calendar, most of the reports are second tier except UK unemployment.BOE minutes and US CPI (although inflation is not a concern). It would take a series of data undershoots to revive the risk for QE3.
Note, we are still in the dog days of August so liquidity is thin and price action seems driven more by EUR crosses, book squaring and stops than strong positioning.
GVI Forex Jay Meisler 11:06:20 GMT - 08/15/2012
Weathermap Update - performing as suggested
In any case, the current range within 1.23-1.24 will not last as it is rare for it to trade on one big figure (e.g. 1.23xx) for long. Odds favor a test of 1.23 as long as it stays below 1.2350.
- For today, watch stocks
- Much will depend on whether there are more stops to run. Key levels 1.2261 (Monday low), 1.2242 (last week's low)
- While within 1.2250-1.2350, 1.23 sets the tone but 1.,=2280 could have a pivotal role while within 1.2250-00
- Resistance now 1.2315-25
20:30 GMT (Global-View.com) for August 16 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2285)
EURUSD is back to square one after giving back most of the early in the week gains in a market driven more by EUR crosses than outright USD trading. This leaves it more on the defensive and needing to hold above 1.2242 to stay in its range to maintain a daily pattern of higher lows.
As I noted 1.23 has printed 11 out of the past 15 sessions so expect this level to be the bias setter while within 1.22-1.24. Assuming the current range holds in a summer market lacking firepower and participation, odds would favor a test of 1.23 again as long as EURUSD stays above 1.2240-50. Resistance starts at 1.2315-25.
For Thursday, economic data will continue to be closely watched, especially from the US as it will influence QE3 expectations. Housing starts, weekly jobless claims and the Philly Fed survey highlight the calendar.
GVI Forex Jay Meisler 10:51:30 GMT - 08/16/2012
Weathermap Update:
Everyone seems to be looking at the same support zone (1.2240-60 -- low today 1.2256) while 1.23 remains the level that sets the bias (high today 1.2306). Similar to yesterday, 1.2280 is pivotal while within 1.2250-00.
What will be interesting today is to watch the reaction to US data with the QE3 debate going on (will he or won't he?), Logic suggests USD should firm on better data (no QE3) and slip on weaker data (QE3) but since when does logic work in the FX market? This would imply algos are trading on this view and that is not clear.
Mixed bag otherwise with the CAD continuing to be the outperformer. USDJPY tests 200 day mva (79.18). 100 day mva = 79.72. Close vs. 200 day mva is important. High has been 79.36.
GVI Forex Jay Meisler 15:32:04 GMT - 08/16/2012
I wrote this Monday night and proved to be a good one:
If you look at the price action of late, moves outside of 1.23-1.24 have failed on both sides, suggesting 1.23 would need to become resistance or 1.24 become support to break this pattern. Otherwise, expect more chop in a market that seems more focused on EUR crosses than on the USD at the moment.
GVI Forex Jay Meisler 00:03:57 GMT - 08/17/2012
00:00 GMT (Global-View.com) for August 17 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2356)
The summer yo-yo trading continues for another day but EURUSD seems set to close the week on an up note (last Friday close 1.2293) in a market that remains in a holding pattern where news tends to have an exaggerated effect. One focus remains on US data but looking ahead to next week, there is a light slate of releases so little to fuel the QE3 debate. On Friday, University of Michigan consumer sentiment highlights the calendar.
As for the EURUSD, the way it reacted (up) to a think tank report about Spain suggests that it should find support (i.e. at least stay in a range) until we see to what extent Draghi will follow through on his pledge to preserve the euro. Charts, meanwhile, show a formidable resistance at 1.2384-87, which blocks 1.24 and the key 1.2443 level. On the downside, 1.2340-50 needs to hold to maintain a BOD (bid on dips) bias.
Continue to watch EUR crosses as this is where buying and selling of this pair has been coming from. In this regard, look for EURJPY 98 to be an indicator as above it is needed to suggest cross demand. Other indicator levels are EURCAD 1.22 and EURAUD 1.1750. It is hard to suggest follow through in this environment so watch levels posted above for clues.
GVI Forex Jay Meisler 10:51:19 GMT - 08/17/2012
As posted earlier on GVI Forex THis is from the Lloyds Bank FX Daily Strategy repprt that came out earlier and sums up what is going on.
EUR Talk of ECB intention to buy Spanish debt was one of the catalysts for the EUR recovery yesterday, but we would not put too much weight on the Eurozone debt crisis as a significant factor for EUR/USD in the short term. A quick examination of the close correlation of EUR/USD with 2 year yield spreads suggests that EUR strength on improved confidence is more likely to be seen on other crosses. EUR/SEK, EUR/AUD and EUR/CAD may be the most vulnerable to further EUR recoveries, though EUR/CHF probably contains the largest EUR risk premium of any of the major currency pairs.
Lloyd's Bank Daily FX Strategy
GVI Forex Jay Meisler 10:54:09 GMT - 08/17/2012
I posted this last night on GVI Forex and Inner Circle and it has essentially worked out on both sides as focus is on EUR crosses. Range has been 1.2338-1.2382
EURUSD
Res
1.2443 - most important
1.2400 - firmly above would be needed to confirm 1.2384-87 break
1.2383-87 - important, (1.2283 = 50 day mva)
1.2273 = Thursday high
1,2340-50 - BOD bias while above it
1.2320 - protects 1.23
1.2300 - neutral
1.2285
Sup
GVI Forex Jay Meisler 07:17:14 GMT - 08/20/2012
22:45 GMT (Global-View.com) for August 20 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2339)
The economic calendar is light on Monday, suggesting little to focus on and a range session. In any case, the market is likely to remain in a holding pattern as the next key event is the Bernanke Jackson Hole speech on August 31 and then key EZ related events in early September. This leaves the market at the mercy of headlines where thin conditions continue to see exaggerated reactions to news. A key focus in the US in the coming week will be on FOMC minutes on Wednesday in what otherwise is a quiet calendar.
Typically, narrowing choppy ranges like we are currently seeing precede a breakout and a directional move but in this case, it is hard to suggest follow through given thin end-of-summer markets and key events that lie ahead. Meanwhile, EUR crosses remain more of a driver of EURUSD than USD flows. As a result, it has been almost a daily whipsaw during the month of August and you can expect more of the same in the coming week.
With that said, thin markets do not mean complacency and as always, it pays to stay on alert
As I noted at this time last week, 1.23 would need to become resistance or 1.24 become support to signal the next directional move, leaving 1.23-1.24 as sort of a no man’s land.
Current range is 1.2242-56/1.2382-87. 1.23 has printed in 13 out of the past 17 days
Note current price action is trapped within the 20 day (1.2283) and 50 day (1.2380) mvas.
GVI Forex Jay Meisler 11:01:55 GMT - 08/20/2012
Weathermap proving to be a good guide today - another news whipsaw day (see below)
Note the (over?) reaction to news:
- ECB capping yields article
- Buba criticism of bond buying
- German FinMin; not aware of capping yields plan
GVI Forex Jay Meisler 00:02:46 GMT - 08/21/2012
00:00 GMT (Global-View.com) for August 21 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2350)
Another day and will it be another whipsaw? This is the question I ask in a market that continues to reward range traders and punish those betting on follow through. If it wasn't for key events lying ahead we would be bracing for a breakout, As I noted yesterday, thin markets do not mean complacency and as always, it pays to stay on alert.
Otherwise., this is a market where long-term investors are sitting it out, leaving it to short-term traders to chase their tails. Ranges, meanwhile, continue to compress, 1.2382-87 on top and rising support just below 1.23. Economic calendar is light, RBA minutes are a highlight. Next key focus is on the FOMC minutes on Wednesday,
GVI Forex Jay Meisler 11:24:33 GMT - 08/21/2012
I warned about complacency during this thin summer chop and it proved to be a good warning as EURUSD breaks a key 1.2382-87 resistance and tests 1.24+ for the first time in nearly two weeks. This is a case where everyone is probably looking at the same levels.
Next key resistance is the 1.2443 Aug 6 high, which along with 1.2450 ("50" level) block putting 1.25 on the radar. Onus is on the bull side to take this level out to break the current wide range.
On the downside, expect BOD (bids on dips) while above 1.2382-87 and the 50 day mva (1.2377 = purple line), stronger bid if 1.24 can hold.
GVI Forex Jay Meisler 00:35:08 GMT - 08/22/2012
21:50 GMT (Global-View.com) for August 22 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2471)
While attention is on EUR crosses such as EURAUD, EURCAD, EURGBP, EURJPY, EURSEK, perhaps the best indicator of EUR sentiment is EURCHF. With the exception of a brief spike on August 6 (attributed to a fat finger trade), EURCHF continues to be pinned in a tight range just above 1.20, suggesting it still requires SNB support to keep it above its floor. If EUR sentiment was really turning, this cross would be distancing above 1.20. Unless this occurs, the EUR downside has to be considered suspect no matter where EURUSD trades.
With that said you cannot ignore the price action as EURUSD broke out to the upside although it seemed driven more by EUR cross flows (book squaring?) than outright vs. the USD. On the top, 1.25 looms as a potential obstacle to key levels at
1.2747 = major June 18 high
1,2710 = key daily channel top
1.2693 = key June 29 high
1.2628 = 100 day mva
On the downside, 1.2443-50 needs to hold to maintain a strong bid.
Highlight on Wednesday will be the FOMC minutes which will be closely scrutinized for QE sentiment among the voting members. Watch stocks as the EUR and S&P diverged on Tuesday.
GVI Forex Jay Meisler 10:30:32 GMT - 08/23/2012
10:30 GMT (Global-View.com) for August 23 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2557)
On Monday I noted the following: With that said, thin markets do not mean complacency and as always, it pays to stay on alert. This statement was never more true than on Wednesday when the FOMC minutes surprised by being even more dovish than expected and this sent the dollar tumbling on raised QE3 expectations.
This sets up the market for Bernanke’s end of the month Jackson Hole speech where expectations that he will send a signal for QE3 will place a limit on the dollar upside ahead of it.
Meanwhile, EURUSD trade above 1.25 sets this as the level that will set the tone going forwards. On the upside, there is little worth noting between 1.25-1.26. Key levels come in at:
1.2747 = major June 18 high
1,2700 = key daily channel top
1.2693 = key June 29 high
1.2622 = 100 day mva
1.2600 = channel top (daily)
On the downside, expect a bid while above 1.2480-90, stronger bid while 1,25+ trades.
With that said, main foicus remains on EUR crosses, creating a tug-of war spot market with EUR/commodity crosses extending highs. Look for 1.2550 to set the tone while within 1.25-1.26 but with an underlying bid as long as 1.25+.
GVI Forex Jay Meiser 00:41:02 GMT - 08/24/2012
00:00 GMT (Global-View.com) for August 24 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2557)
If my view that the EURUSD recovery is being driven by a short squeeze out of EUR crosses (e.g. EURAUD) rather than new found enthusiasm for the currency suggests it is a matter of where, not if this move tops out. What would change my mind is EURCHF distancing above 1.20. So far, this cross remains pinned just above 1.20, suggesting it still needs SNB support to keep it above the floor.
With that said I would be foolish to ignore the price action that has lifted the EURUSD above 1.25, a level that will set the tone going forwards. As noted yesterday, key levels come in at:
1.2747 = major June 18 high
1.2693 = key June 29 high and major daily (down) channel top
1.2617 = 100 day mva
1.2610 = daily up channel top (Thursday’s high 1.2590)
On the downside, there is not much in the way of key levels with 1.2524 (Thursday low) blocking a return to 1.25. Look for 1.2550 to set the tone while within 1.25-1.26 but only a break of the lower end would negate the upside risk.
GVI Forex Jay Meisler 22:10:37 GMT - 08/26/2012
11:40 GMT (Global-View.com) for August 27–
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2517)
Look no farther than EURUSD 1.25 to set its tone in yet another holding week where we will finally see the first key event when Bernanke makes his Jackson Hole speech on Friday. A Monday UK holiday will make it a thin start to the week so it pays to spend this time looking ahead.
Bernanke’s speech could not be worse timed from a market perspective. It comes on Friday morning ahead of the 3-day Labor Day weekend, when liquidity will be thin. Expectations have swung in favor of QE3 at the September meeting but this is far from a slam dunk. The proximity of the presidential election clouds an already cloudy issue as the Fed normally steps back at this time and avoids policy decisions that might affect the vote. However, Bernanke did not get his nickname Helicopter Ben for nothing so the risk he drops a QE3 hint or sounds a very dovish tone seems better than an even chance.
Then there is the Draghi speech on Saturday, which may be the more important event as the market looks ahead to the following week’s ECB meeting. He will likely keep expectations high but I am not sure how specific he will be. The history of the Euro zone and ECB initiatives is one filled with disappointments so with expectations running high, this risk should not be ignored. It may come down to what the ECB will be allowed to do more than what Draghi would like to do in regard to peripheral bond buying to lower Spanish and Italian yields.
What is interesting is the way the market likes to punish the dollar over the slightest hint of more QE while it has been rewarding the EUR for hints of the same policy. One reason may be that ECB bond buying would ease the crisis risk and lower the risk premium placed on a EUR breakup However, once the dust settles, QE, along with a cut in interest rates, should it occur on a large scale, would solidify the EUR role as a funding currency.
So, to sum up, expect another choppy week where news headlines should continue to see exaggerated reactions. US data will be closely scrutinized ahead of Bernanke’s speech. Rumors from the EZ should continue to be the focus as well.
One thought on the latter: look for rumors about Spain asking for aid the closer it gets to the ECB meeting as this is a prerequisite for bond buying. This makes it a matter of timing as to when, not if Spain asks for help. Thus, this should not come as a surprise when it happens even though the market will react.
GVI Forex Jay Meisler 00:22:41 GMT - 08/28/2012
00:20 GMT (Global-View.com) for August 28–
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2498)
To put it simply, this is not a week when the market will make big bets. With Bernanke's speech on Friday and Draghi speaking on Saturday + a long US weekend coming up, followed by key events into September (e.g. ECB meeting and more), there are more than enough reasons to stay on the defensive. Add to it the way the market jumps on headlines, it is not a week to be a hero. This does not mean you can't trade but lower your expectations and keep your ideas small.
Logic says the dollar upside should be limited ahead of Bernanke although QE3 fever seems to have cooled a bit but is still a risk. This may be for later in the week as Bernanke’s speech approaches. Meanwhile, the book squaring that drove the EUR higher seems to have run its course and it would take fresh demand to push it out of its range. My guess is it will stay within 1.24-1.26 until Bernanke speaks. A tighter range at 1.2450-1.2550 would also not surprise but much depends on what positions need to be squared before the end of the week. In any case, 1.25 is likely to set the EURUSD tone this week and into September.
US pending home sales and CB consumer confidence highlight a light Tuesday economic calendar.
GVI Forex Jay Meisler 10:22:27 GMT - 08/28/2012
This is from today's Weathermap and proved to be a good warning:
Add to it the way the market jumps on headlines, it is not a week to be a hero. (see below)
GVI Forex Jay Meisler 11:03:32 GMT - 08/28/2012
Deja vu? Note the two news headline spikes to 1.2561 (Friday and today). Watch 1.2550 as it sets the tone.
Deja vu would be a retrace of the news spike to 1.2500-25. Yesterday's high was 1.2536.
GVI Forex Jay Meisler 11:22:41 GMT - 08/30/2012
11:20 GMT (Global-View.com) for August 30–
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2542)
One more day until Bernanke speaks and this suggests another thin session on Thursday dominated by position adjustments. EURUSD upside, meanwhile, looks out of steam for now but it is hard to suggest follow through as the market digs in before Friday’s key event and the long US Labor Day weekend. Looking further ahead, 1.25 will set the tone going forwards.
For a hint of what may lie ahead, see our September newsletter and my featured article:
00:00 GMT (Global-View.com) for August 31–
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2511)
Fasten your seat belts! The long wait for Bernanke’s Jackson Hole speech is finally here and it comes at a time when markets will be lacking liquidity with summer end, month end and ahead of the long US Labor Day weekend. Price action ahead of it suggests that QE3 expectations are being pared back and global growth concerns are being raised.
The question is not if Bernanke will be dovish, that is a given. The focus will be on whether he sends a QE3 signal.
Focus is on the Bernanke speech tomorrow. I don't know what he is going to say, but it appears that those Fed members who have been speaking are taking a cautious stance on QE3. My best guess is that the central bank will be taking a cautious posture on additional ease and will be waiting for additional data before they pull the trigger. After the Sep 12-13 FOMC, the Fed then meets on Oct 23-24 then Dec 11-12. I have low expectations for this speech. After this meeting, the next chance for QE will be in December.
Levels to watch (see daily chart)
As the daily chart shows, a key level is the up trendline at 1.2410 with 1.2466 standing ahead of it. Below the trendline there is little worth noting between 1.23-1.24.
On the upside, the 100 day mva is in the current range at 1.2588 with 1.2590 (recent high) blocking key levels above 1.26.
Keep an eye on 1.25, which is proving to be the pivotal level that will set the tone going forwards. In any case, this is a day where how markets end will be more important than the initial reaction to Bernanke’s speech.
GVI Forex Jay Meisler 10:24:23 GMT - 09/04/2012
01:40 GMT (Global-View.com) for September 4 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2605)
Despite talk of a risk of disappointment from Thursday’s ECB meeting the EURUSD continues to maintain a bid, closing above the 100 day mva (1,2577) for the first time since early May This comes in a market that continues to penalize the dollar for the risk of QE3 while rewarding the EUR for the prospects of bond buying by the ECB. One reason is that the ECB equivalent of QE will reduce the risk premium for a Euro zone breakup. At some stage ECB bond buying will become a negative but for now the market chooses to see it as a positive.
So where that leaves us technically is a risk on the upside but key levels loom overhead.
1.2637 = Friday’s high
1.2647 = Major daily trendline/channel top dating back to start of Nov 2011
1.2693 = Key June 29 high
1.2747 = Major June 18 high
On the downside, as I noted, expect a bid as long as it stays above 1.2550, stronger if 1.26+ trades as it would expose key levels posted above.
23:15 GMT (Global-View.com) for September 5 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2558)
One more day until the ECB meeting and the word disappointment keeps being mentioned. As with the Bernanke speech, the market will spin this the way it suits regardless of the initial reaction.
If you take a step back and look at the last two week’s price action, EURUSD has been consolidating despite making new highs. It has closed with a 1.25xx handle each day but one and on that day it was just below the 1.25 level. So essentially it has been closing on 1.25xxs for the past two weeks . This suggests it would need to close 1.26xx to send a signal to go after key levels above it or below 1.25 to suggest disappointment.
In the meantime, price action suggests the top is in pre-ECB. Wednesday will be another day dominated by pre-ECB position adjustments as it is hard to see big bets being made ahead of it. Watch 1.2550 (note rumored stops on Tuesday) as it will dictate whether the focus stays on 1.26+ or shifts back to 1.25.
There is a full international economic calendar but the US side is light. The BOC rate decision highlights the North American day.
GVI Forex Jay Meisler 10:44:07 GMT - 09/05/2012
As a followup (see below):
- 1.2550 remains pivotal and the bias setter while within 1.25-1.26
- It appears the 10 day pattern with 1.25xx closes will be extended
- Pre-ECB position adjustments rather than positioning dominates as suggested
- High so far 1.2555 (around yesterday's low)
By the way, you are free to comment on whatever I write here as discussion is encouraged.
GVI Forex Jay Meisler 00:05:11 GMT - 09/06/2012
22:15 GMT (Global-View.com) for September 6 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2604)
All eyes are on the ECB meeting and the Draghi press conference as the long awaited bond buying plan is eagerly awaited. The uncertainty is how much he will reveal on Thursday as the German Constitutional Court ruling on the ESM due September 12 remains a hurdle. From the various news headlines that have whipped the market around, my best guess for the bond buying plan is as follows although full details may not come out tomorrow
- Bond buying with maturities up to 3 years
- Draghi would probably like unlimited unsterilized amounts. I am not sure of the size although it has to be large enough to impress markets and it appears it will be sterilized.
- ECB gives up preferred creditor status for sovereign bond buys
- No cap on yields
- Conditionality: Official requests for aid required before bond buying would be undertaken
- Surprises would be unsterilized bond buying and/or unlimited amounts
This is not an easy one to call given a risk of disappointment, especially if full details are not revealed vs. technicals that have shifted in the EURUSD favor. How the EURUSD ends the day and the week will be more important than the initial reaction to Draghi.
Looking at chart levels,
- 1.25-1.26 is like a no man’s land.
- 1.26 has traded 4 days in a row.
= Current pattern: Closes for the past 11 days have essentially been 1.25xx.
Major chart levels are above 1.26:
1.2630 = Major daily trendline/channel top dating back to start of Nov 2011
1.2637 = Recent high
1.2693 = Key June 29 high
1.2747 = Major June 18 high
On the downside, key levels are below 1.25 (1.2487, 1.2466)
Also, watch the ADP survey as it will influence Friday’s US jobs report and the risk of QE3.
Note how EURUSD held 1.2625 and is now testing 1.2693. A firmer EURCHF is providing some of the demand.
21:35 GMT (Global-View.com) for September 7 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2633)
No matter what you think about the Draghi plan, it kicks the can and reduces the tail risk. What it doesn’t do is boost growth and that will be an issue as we go forwards and likely limit the EURUSD upside. The EZ needs a weaker currency not a stronger one in the absence of any fiscal leeway to stimulate the peripheral economies that are being weighed down by austerity. For me this suggests more chop within a broad 1.20-1.30 range where crosses will drive this pair more than vs. the USD.
Next up is the monthly US employment report and after the strong ADP survey, the whisper NFP # will likely be marked higher. However, the correlation between ADP and NFP can be a loose one. So it is like rolling the dice for a NFP # that has a high margin of error and subject to big revisions yet the headline report can have a huge impact, especially on expectations for the September 13 FOMC decision given the Fed’s focus on employment as it weighs another round of QE. How equities react after Thursday’s strong showing will affect the risk mood and fx.
As for the EURUSD, technicals continue to improve but it faces key levels that need to be taken out to push it higher. One level to watch is 1.2625, the major downtrendline broken on Thursday (see chart), which needs to become support along with 1.2650+ to put key levels at 1.2693 and 1.2747 at risk. On the downside, below 1.2550 would be needed to put 1.25 in play again. Meanwhile, watch 1.26 as it has printed 5 days in a row and as it did on Thursday, will set the tone on Friday. My guess is that 1.27-1.28 will prove tough if seen.
GVI Forex Jay Meisler 10:46:35 GMT - 09/07/2012
I wroie this in the Sept newsletter and note how EURCHF has broken out the upside after moving away from 1.20
12:05 GMT (Global-View.com) for September 10 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.28xx)
This will be another active news week with the dollar likely to see a limited upside ahead of key events:
Sept 12 – German Constitutional Court ruling on ESM – surprise would be a no for the ESM
Sept 12 – Dutch elections – National elections are being held after opposition to austerity measures forced the government to resign in April and should be overshadowed by the German court decision.
Sept 13 – FOMC decision – There is a lot of event risk associated with this meeting as expectations have shifted back in favor of QE. Some sort of unsterilized QE is now expected as expectations have reversed following the US jobs report. Extension of the no rate hike guidance is expected into 2015 as well. Surprise would be no QE or sterilized QE and/or no extension of the rate hike guidance.
Sept 14 – EU finance ministers meeting – While there is headline risk, the finance ministers are likely to be in a self-congratulatory mood.
The calendar argues for a limited dollar upside (or vulnerable downside) ahead of these key events. The move above 1.2747 suggests 1.2750 will be pivotal in keeping a bid although 1.28 is probably more important going forwards.
Key levels above 1.28 are at 1.2825 (May 21 high) and 1.2843 (200 day mva) before a void of key levels. Using the 2012 range at 1.3485-1.2041, 1.2933 = 61.8%, The 2011 close was 1.2941.
In any case, watch 1.28 as that will set the tone to start the week.
01:30 GMT (Global-View.com) for September 11 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2753)
This is another one of those weeks where how the fx market ends up is more important than how it starts out. Tuesday will be another one of those holding days as the market looks ahead to the next key event on Wednesday. This leaves the EURUSD consolidating and dependent on 1.2750 holding to maintain a bid although 1.28+ is needed to turn it into a strong bid. Note, support is below 1.2750 at 1.2747 (former key high) and 1.2743 (23.6% of 1.2501-1.2818). To put the price action in perspective, 1.2697 = 38.2%, 1.2660 = 50%.
Otherwise no change to what I posted yesterday, which is to expect a limit to the dollar upside ahead of Thursday’s FOMC meeting but the EURUSD upside capped unless 1.28+ trades.
Position adjustments will likely dominate. There is a light economic calendar on Tuesday.
Tuesday: 10:15 GMT Addendum
- Traded 1.28 for the 3rd day in a row
- High at 1.2818 matches the late Friday high so a double top
- Note this post on GVI Forex: Stops 1.2820-25 then good supply 1.2845-50
- USD remains generally soft ahead of the FOMC decision, EUR trading softer on its crosses
GVI Forex Jay Meisler 23:56:11 GMT - 09/11/2012
23:50 GMT (Global-View.com) for September 12 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2853)
Wednesday sees the first of the key events this week and price action suggests the fx market is expecting a perfect storm. With the German Constitutional Court expected to rule in favor of the ESM, the uncertainty is whether it attaches conditions to the decision. The surprise would be if it fails to rule in favor. The reaction will depend on how much is discounted as there is always a risk of a buy the rumor, sell the fact reaction with well publicized events.
The focus will then shift to the Dutch elections on Wednesday followed by the SNB meeting and FOMC decision on Thursday. The FOMC meeting is the greatest event risk.
Looking at the EURUSD daily chart, it traded above the 200 day mva (yellow line = 1.2837) for the first time since Oct 27, 2011 and would have to stay above it (and 1.2850) to keep the focus from shifting back to 1.28. Support below the market comes in at 1.2818-25.
On the upside, there is little until 1.29+ (1.2933 = 61.8% of 1.3485-1.2041, 1.2941 = 2011 close and 1.2995 = former breakout level – see daily chart). In any case, 1.28-1.30 is a pivotal zone as the current assumption is a 1.20-1.30 range until proven otherwise.
GVI Forex Jay Meisler 23:27:59 GMT - 09/12/2012
21: 30 GMT (Global-View.com) for September 13 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2900)
Attention now shifts to the FOMC decision and Bernanke’s press conference that follows. A Bloomberg survey of economists indicated 2/3 expected QE3 and 68% expected an extension of the rate guidance.
There is room for disappointment as typically the Fed tries to avoid making policy decisions so close to a national election. In addition, more QE will likely lift commodity prices, such as oil while having little positive effect on the economy. Another Fed Chairman might try to teach markets a lesson by not succumbing to its wishes. However, in this case markets are betting on a dovish Bernanke to pull the QE trigger again as the Fed is boxed into a corner. If it doesn’t announce QE3, markets are going to be hit hard so it has to weigh the political impact + risk of rising energy prices vs. the need to supply more QE drugs to equities. The next window for QE is December as the October meeting is too close to the elections for a policy change.
So what are some of the scenarios?
Scenario 1: QE3 and an extension of the rates guidance. No surprise and while there is a risk of a buy the rumor sell the fact reaction, such a decision would support risk once the dust settles.
Scenario 2: No QE3 and an extension of the rates guidance + language holding out the QE3 carrot in the future if conditions warrant. The market would react, perhaps violently, to no QE3 given how expectations have shifted in its favor. However, once the dust settles, expectations of future QE should temper any reaction, even if it is a sharp one. In this regard, watch Bernanke’s press conference and see how far out he holds the carrot.
Scenario 3: No QE3 and no extension of the rates guidance. Longest shot as statement will be dovish.
Scenario 4: This would include a cut in the interest rate paid on bank reserves. This is another long shot but the USD would tank if this occurred.
As for the EURUSD, watch 1.28-1.30 as a break of this range will send the next signal. Below 1.2750 would be needed to confirm a 1.28 break. 1.2950+ would be needed to put 1.30 on the radar. 1.2850-1.2950 is a possible range pre-FOMC.
SNB meeting will be held on Thursday as well amid speculation it might raise the EURCHF floor to 1.22. I see that as a long shot and if I was the SNB I would be defending 1.2050 to keep pressure away from the 1.20 floor.
GVI Forex Jay Meisler 11:11:56 GMT - 09/13/2012
Weathermap update --
How the market ends the day will be more important than the initial knee jerk reaction to the FOMC. This is a quick summary of what to look for (see Weathermap for various scenarios)
1) QE3 - unlimited or a fixed amount. $500 bln and above needed to support risk
2) Rate guidance language - majority expect no rate hike guidance to be extended into 2015
Reaction will tell how much is already discounted or whether there is disappointment. Note there was no buy the rumor sell the fact reaction with the German court decision yesterday.
GVI Forex Jay Meisler 22:40:35 GMT - 09/13/2012
22:05 GMT (Global-View.com) for September 14 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2985)
For the second day in a row a well publicized event did not see the typical buy the rumor sell the news reaction. In this case it was the FOMC meeting and QE3, which sent stocks surging higher and the dollar tumbling lower. This includes the EURUSD, which tested 1.30 and is now up for the year (1.2941 = 2011 close). Who would have believed this just a few months ago when 1.20 was under attack and talk was for 1.10 and parity.
The battle for 1.30:
Well, we have to trade the hand we are dealt and the dovish Fed has given a green light to sell dollars. The immediate focus is on 1.30 as this level will dictate the tone going forward. While 1.30 has potential to cause a pause, it is at risk and I am shifting my range from 1.20-1.30 to 1.25-1.35.
On the upside, key levels above 1.30 come in at:
1.3200 = pivotal big figure
1.3284 = May 1 high
1.3380 = Apr 2 high
1.3485 = Feb 24 (and 2012) high
On the downside, support starts at 1.2940-60 but it should trade with a BOD (Bid on Dips) as long as it stays above 1.2850-00 barring some surprise EZ event that would shift the focus back to EUR negatives.
GVI Forex Jay Meisler 21:04:45 GMT - 09/15/2012
21:00 GMT (Global-View.com) for September 17 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.3125)
If I read this market right Friday was a throwing in the towel day with those betting on 1.30 being the top got squeezed out. This suggests the big stops have been exhausted and EURUSD would probably need fresh demand or fresh USD weakness to push it through 1.32, above which lies key technical levels. Note on Friday firmer EUR crosses were a catalyst for the EURUSD move higher. On the other side, it will be hard to get a decent correction until the market gets long as it seems to have been fighting this move all the way up.
In any case, pace of the move argues for a breather so maybe we see one on Monday, which is a day that often sees stocks trade lower. With correlations high, keep an eye on equities although that market will be keeping an eye on fx.
On charts, watch 1.30-1.32 as that will dictate what comes next (e.g. 1.28-1.32 or 1.30-1.35). As I noted on Friday, 1.3150-00 has potential to be a tough area and so far that has proved true.
On the downside, expect a BOD (Bid on Dips) as long as 1.30+ trades, stronger if it can hold above 1.3050. See daily chart (above) and importance of staying above 1.2995.
GVI Forex Jay Meisler 00:03:32 GMT - 09/19/2012
23: 00 GMT (Global-View.com) for September 19 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.3043)
EURUSD will take a back seat to the JPY on Wednesday as attention will be on the BOJ meeting amid rumors of monetary easing. This suggests EURJPY will be more of a focus than on the EURUSD.
As for the EURUSD, with 1.3150-00 so far proving tough, 1.30 has stayed on the radar. As I have been noting, 1.2995 is key support for me although 1.30 will be more important for the market while 1.3150-00 remains tough resistance. While within 1.30-1.31, 1.3050 will set the tone. 1.3075-85 blocks a return to 1.31. 1.3015-30 blocks 1.30. Note 1.2990 = current one hour trendline.
GVI Forex Jay Meisler 23:29:50 GMT - 09/19/2012
23: 15 GMT (Global-View.com) for September 19 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.3050)
This is a tough one to call as you can make a case for a correction but only if 1.2990-00 is solidly taken out. On the other side, initially, same resistance as yesterday at 1.3075-85 blocking a return to 1.31. The upper end (1.3085) would be needed to be taken out to negate the retracement risk. Otherwise, expect limited follow through while within 1.30-1.31 where 1.3050 sets the bias. Note as long as Monday's high at 1.3172 stays intact, there is a risk of a Monday eFfect, which increases the importance of 1.3085 as above it would ease the risk.
There is a full economic calendar on Thursday, which could spark some volatility but data has been pre-empted by the way central banks have eased policy.
GVI Forex Jay Meisler 11:10:45 GMT - 09/20/2012
As a followup to the Forex Weathermap oosted last night (see below);
Monday effect:
I noted the risk yesterday and in the Weathermap (required a 1.2990-00 break, which occurred) and it has been a factor in today's sell-off.
Monday effect: When the high/low for the week is set on a Monday pressure often builds in the opposite direction later in the week.
I also noted on the Inner Circle yesterday that this effect is more likely to occur on a Thursday-Friday when there market loses some of its capacity to absorb the flows.
As for the EURUSD, there is little in the 1.29-1.30 area so look for 1.2050 to take on its typical "50" role of setting the tone but only 1.30+ would neutralize the risk.
Using 1.2501-1.3172,
1.2916 = 38.2% vs. a 1.2930 intra-day low
Note that pressure is coming out of EUR crosses, led by a further retreat in EURJPY (EURGBP as well), which is causng lags elsewhere (e.g. USDJPY, GBPUSD).
GVI Forex Jay Meisler 23:14:28 GMT - 09/20/2012
22:05 GMT (Global-View.com) for September 21 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2970)
The correction risk I pointed out at this time last night did unfold but it took a break of 1.2990-00 to get the ball roiling. This is the area to watch on the upside as back above it is needed to ease the risk.
How bad has been the damage been? It depends on whether your glass is half empty or half filled. Bulls can point to the low at 1.2919 vs. 1.2916 = 38.2% of 1.2501-1.3172 as a sign of a modest correction. Bears can say there is room on the downside with the next key area of support between `1.2800-50.
So there is room on both sides but I would not be surprised to see a thin, choppy end to the week as the economic calendar is light and thus little to spark movement. Only a break of 1.2919 would suggest more legs to the retracement.
In the meantime, look for 1.2950 to set the tone while within 1.29-1.30.
GVI Forex Jay Meisler 11:02:03 GMT - 09/21/2012
Forex Weathermap Update:
Friday whipsaw and scanning through the news I had trouble finding anything toi explain the sharp pop in the EURUSD (and fall in the USD) other than chatter of Middle East names buying.
Other news could have been taken negatively so one of those days where price action suggests thin liquidity.
Given the sudden pop, there should be bids below the market by those caught and hoping for a dip.
Proce action currently within 1.2950-1.3050 so 1.30 will be the level that sets the bias, currently BOD while above it but upside capped as long as it stays below 1.3050.
GVI Forex Jay Meisler 11:02:11 GMT - 09/21/2012
Forex Weathermap Update:
Friday whipsaw and scanning through the news I had trouble finding anything toi explain the sharp pop in the EURUSD (and fall in the USD) other than chatter of Middle East names buying.
Other news could have been taken negatively so one of those days where price action suggests thin liquidity.
Given the sudden pop, there should be bids below the market by those caught and hoping for a dip.
Proce action currently within 1.2950-1.3050 so 1.30 will be the level that sets the bias, currently BOD while above it but upside capped as long as it stays below 1.3050.
GVI Forex Jay Meisler 10:48:26 GMT - 09/23/2012
10: 35 GMT (Global-View.com) for September 23 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2980)
10:45 GMT (Global-View.com) for September 23 –
Jay Meisler's Daily Forex Weathermap - EURUSD (current rate 1.2980)
The intra-day volatility to end the week suggests a market in a transition phase as It decides what side of 1.30 it wants to trade. I suggested 1.28-1.32 as a possible range and if so, then 1.30 is neutral. A look at the daily chart (see above) shows 1.30 printing 3 days in a row and 4 days of lower highs although Friday was an inside day. It also shows little below the market until 1.2800-50, which includes the 200 day mva yellow line = 1.2829), which by the way seems to be on a convergence course with a rising 20 day mva (red line).
Using 1.2501-1.3172,
1.2916 = 38.2% (vs. a 1.2919 low last week)
1.2837 = 50%
Bottom line is the uptrend seems out of steam but jury is out whether this is a pause or the start of a broader correction. In this regard, watch 1.30 as it will set the tone going forwards.
Otherwise, this is a tough week to call with quarter end likely to be a key factor, suggesting flows/position adjustments may be a greater influence than news, especially as the week winds on. However, markets remain news junkies so continue to expect economic data and news about Europe, especially Spain and Greece, to be a focus as the wait is on for the inevitable request for a bailout (Spain) and Troika report (Greece
Monday event risk: German IFO
GVI Forex Jay Meisler 21:12:05 GMT - 09/23/2012
If you are looking for a game changer level it is not until 1.2750 on a daily chart:
GVI Forex Jay Meisler 11:25:26 GMT - 09/24/2012
Weathermap (see prior posts) was a good barometer of the risk today as the failure to see 1.30 print sent a signal to test the downside. With the daily chart showing no key nearby levels, I am watching the one hour chart where 1.2850 starts the zone of support. There is little worth noting between 1.2850-00. Resistance starts at 1.2919 (last week's low), then 1.2950-55 and 1.2980.
GVI Forex Jay Meisler 00:00:08 GMT - 09/25/2012
23:00 GMT (Global-View.com) for September 25 (current rate 1.2932) I get the feeling that this EURUSD correction does not have much enthusiasm and seems more are looking for levels to buy than a reversal. Only new USD highs (e.g. EURUSD low = 1.2890) would trigger fresh stops.
I also noted, this feels more about adjustments in EUR crosses (all sort of negative news, only positive one was the ESM leverage, which was ignored) than in a rush into the USD.
With that said, the EURUSD upside has lost momentum and the one hour chart (see below) is one to follow with key daily support not until the 1.2800-50 area and key resistance comes in around 1.3000 (Monday high =- 1.2990, green line = 100 hour mva, trendline currently around 1.30).
Bottom line: Monday was fairly predictable, at least as far as the risk was concerned but Tuesday is a more difficult as the choice is further correction or consolidation. EURUSD is in a down channel, market lacks enthusiasm but needs 1.2950+ to slow the risk.
1.2935 blocks a return to 1.2950-90. 1.2890 blocks 1.2800-50.
Event risk: Economic calendar is light
GVI Forex Jay Meisler 10:55:25 GMT - 09/25/2012
Daily chart shows why there are calls for a reversion to mean (200 day mva = 1.2828 = yellow). 20 day mva continues to be on a convergence course (red = 1.2797).
With that said, it feels this week, as I noted in the weekend Weathermap, would be more about quarter end flows but that news junkies would contnue to look for headlines to trade. May be why the market feels more (EUR) cross than USD driven... See full update on GVI Forex and the Inner Circle
GVI Forex Jay Meisler 00:04 GMT September 25, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
1.2935 (stops) proved to be a good level. Obstacle is 1.2950-55
23: 45 GMT (Global-View.com) for September 27 (current rate 1.2880)
Have we seen a bottom?
Current pattern: 7 days of lower highs, 6 out of 7 days of higher lows (Wednesday’s range 1.2913-1.2836).
Market will stay in a SOB (Sell on Blips) mode as long as the lower high pattern continues but watch 1.28 as it has potential to check the downside. A break of this pattern would turn the market more neutral but only 1.30+ would revive a bid.
As the daily chart shows, EURUSD traded like a technical blueprint with the test of the 1.2800-50 area, but pausing above key indicator levels: 20 day mva (1.2832) and 200 day (1.2827) mva. Also, 1.2837 = 50% of 1.2501-1.3172 was tested and held so hope for the bulls while above it.
Otherwise we are closing in on 3rd quarter end and flows associated with this date will have a greater influence than news even though news junkies continue to react to headlines.
One hour chart, which has been a good guide to the move down. Trendline currently at 1.2918
GVI Forex Jay Meisler 09:19:26 GMT - 09/28/2012
As posted last night on GVI Forex and the Inner Circle with levels updated. Chart is from last night but you get the idea of the risk.
01:00 GMT (Global-View.com) for September 28 (current rate 1.2917)
I have been saying all week that quarter end flows would dominate even though the news junkies would continue to jump from headline to headline. This will continue on Friday, which will be a thin day and one where the EURUSD heads into it having broken its one hour trendline (see below) and a 7 day pattern of lower highs.
This follows a test of the 200day-20day mva zone (1.2826-51 on Friday), which had been talked about in the market ad nauseam but wound up proving to be the bottom. At a minimum this suggests a two-way flow and a break of 1.2972 would be needed to put 1.30 in play again.
Event risk: Moodys review and whether it downgrades Spain
Support: 1.2920 - 1.2900 - 1.2875/85 – 1.2826
Resistance: 1.2972 – 1.2990-00 – 1.3047
GVI Forex Jay Meisler 11:20:34 GMT - 10/03/2012
11: 00 GMT (Global-View.com) for October 3 (current rate 1.2905)
The question for today
Is the EURUSD trading bid in an offered market (i.e. while below 1.30) or trading offered in a bid market (while above 1.28)?
A case can be made on both sides as EURUSD continues to consolidate around 1.29, a level that has printed 8 days in a row including today This is is also the midpoint of 1.28-1.30 and will likely set the tone going forwards once this pattern is broken. Otherwise, EUR crosses remain the focus (note euraud, eurgbp), which have provided support as short positions unwind but not enough to break out of 1.28-1.30.
Day is still young but as of now, EURUSD 1.29 has not printed. If this continues, the 8 day pattern aound this level would be broken, which wouyld send a bullish signal.
As the one hour chart (above) shows, 1.2967 is key resistance and along with 1.2972 blocks a return to 1.30. Note 1.2990 was last week's high and a move above it would be needed for an outside week.
There still does not seem to be a common theme to explain the EUR cross strength other than concerns elsewhere (e.g. AUD) and the waiting game for Spain to ask for help.
21:50 GMT (Global-View.com) for October 4 (current rate 1.2907)
Day 9: Expect the current pattern trading around 1.29 to be extended on Thursday to 9 days in a row. The longer the pattern goes on the greater chance of a directional move once broken so keep an eye on 1.29 as it will eventually send a signal to go after 1.28 or 1.30.
My view: Medium-term bearish but gut says in the short-term beware of the upside risk as long as it stays above 1.2750-00. Otherwise, treat it as a range until 1.29 is established either way.
Event Risk The ECB meeting is the key event risk where the surprise would be a rate cut although Draghi is likely to sound a dovish tone in his press conference, The focus of the conference will likely be on the bond buying program
As posted last night (see below) on GVI Forex and the Inner Circle One hour chart hss been updated (see above)- current top of upchannel is 1.3053
22:10 GMT (Global-View.com) for October 5 (current rate 1.3016)
In the battle of the two uglies the EUR seems to have gotten the upper hand as it has dragged the USD lower in a week where firmer crosses have provided the EURUSD with support.
This has seen the 8 day pattern around 1.29, which I have been noting this week, broken and this helped send a signal to test the upside.
So where do we go from here?
EURUSD 1.30 is the obvious level to watch as it will set the tone going forwards. Levels on the upside to watch include 1.3031 (61.8% of 1.3172-1.2804 and Thursday’s high) , 1.3047 (suggests 1.3050 as well) and 1.3085 ahead of the key 1.3172 high. There is still a chance the range will turn out to be 1.28-1.32 but for now the bull side has the upper hand. Watch 1.3050 as it has potential to be an obstacle.
Event risk US Sept employment report but barring a surprise (e,g, NFP 200K+) it is hard to see how it would have lasting impact.
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GVI Forex Jay Meisler 11:28:44 GMT - 10/09/2012
11:00 GMT (Global-View.com) for October 9 (current rate 1.2928)
Looking at charts, yesterday the EURUSD stopped dead on at the 50% (of 1.2804-1.3071) level (1.2938) and today it has so far paused dead on at the 61.8% level (1.2906). Also worth noting is a 3 day pattern around 1.30 has so far been broken today (high 1.2990) as well.
This sets up a another tug-of-war day where softer EUR crosses are creating a mixed picture for the USD, which is a reverse of what we saw last week. As the one hour chart shows (see above), 1.2878 is a key support. On the upside, 1.2950 is pivotal in setting the tone while within 1.29-1.30. It is rare to see the daily EURUSD range stay on one big figure (e.g. 1.29-1.30), which makes the downside more vulnerable if it stays below 1.2950 but contained if 1.2900-06 holds.
21:25 GMT (Global-View.com) for October 5 (current rate 1.2878)
It pays to look at the broader picture and work your way down so you can put the price action in perspective. For example, the one hour chart has turned bearish, 4 hour and daily charts (see above) show lower tops (also below the 20 day mva) but need to break 1.2804 to make it lower lows as well. Also trendlines on the latter are below 1.2804 so it would take a break of this level to put the trendlines and what I call the make or break 1.2750 level in play. Otherwise current range is still 1.28-1.30/1.32.
Wednesday is often a correction day so have to keep an eye on equities to see if there is follow through on the downside. 1.2850 (more psychological than technical) protects 1.2828 (200 day mva = yellow line) and 1.2804. Back above 1.2900 would be needed, at a minimum, to ease the risk.
Bottom line, risk on the downside comes from current news/risk off mood and likely stops below the market but I do not get the feeling this market wants to go after the EUR in a big way yet with the risk that Spain will eventually ask for a bailout. With that said, there is little risk that would come this week and one reason the EUR has lost some support.
This is a followup update to the Forex Weathermap update posted last night on the GVI Forex and the Inner Circle 4 hour chart has been updated just now.
GVI Forex Jay Meisler 10:32 GMT October 11, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
- Equites opening firmer, contrast to past 3 days
- S&P Spain downgrade more of a catch up to othsrs - another typical irrational reaction but does Moodys follow with a move to junk?
- Paused above 200 day mva (1.2823) to keep 1.2804 protected
- One and 4 hour trendlines broken
- 1.2909 = 50% of 1.2991-1.2826 (1,2928 = 61.8%)
- Yesterday's 1.2913 high is the key level
- Overnight range is within 1.28-1.29 so expect on or the other side to be tested - 1.29 more at risk while above 1.2850. If the range stays 1.28-1.29 it sets up a bigger move for Friday.
GVI Forex Jay Meisler 12:44:47 GMT - 10/11/2012
Power of the trendline. I have been citing the one hour trendline all week, note [rice action when it was broken today.
So far, 100 (green) and 200 (yellow) mvas capping upside.
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It is a rumor driven friday
1. that Spain will apply for bailout over weekend
2. GERMAN PRESS: The German government will forecast of 1% economic growth this year and next year on Monday,. In May, the government had said they expected 0.7..
3. some saying DJ had a china RRR cut story too...
GVI Forex Jay Meisler 00:09:38 GMT - 10/15/2012
00:00 GMT (Global-View.com) for October 15 (current rate 1.2936)
This is another week of limbo as far as waiting for a Spain bailout request with little chance of it ahead of next weekend’s Spanish regional elections. The risk of what I have been saying is an inevitable request for help from Spain remains a factor limiting the EUR downside. On the other side of the Atlantic, US presidential polls have tightened and what had looked like an Obama victory is less certain at this time. The next focus in this regard is Tuesday’s debate to see if Obama can come back from getting thrashed in the last debate. We can debate which candidate is better for markets and the dollar but I think it is less clear than some think. It seems like the US election uncertainty + earnings worries + Spain dragging its feet + the never ending Greek tragedy + concerns over a China slowdown + the impending US fiscal cliff are probably weighing on risk and equities.... truncated
Low at 1.2891 was 2 pips above 1.2889 = 61.8% of 1.2826-1.2992 (as posted in last night's Weathermap.
GVI Forex Jay Meisler 23:33:49 GMT - 10/15/2012
22:45 GMT (Global-View.com) for October 5 (current rate 1.2947)
The lack of a common trading theme may be one reason for the current chop where the market seems to be chasing each headline. Perhaps it is the wait for the inevitable Spain bailout request pitted against the US presidential election uncertainty + Fed’s QE contributing to the current stalemate. A reluctance to sell the EUR too hard is coming from expectations that it will rally on the headline when Spain asks for help.... truncated
One hour chart: 1.2980-92 (former highs) need to hold to maintain the bid although 1.30 is likely to be most important going forwards.
GVI Forex Jay Meisler 10:31:48 GMT - 10/16/2012
One hour chart: 1.2980-92 (former highs) need to hold to maintain the bid although 1.30 is likely to be most important going forwards.
GVI Forex Jay Meisler 22:21:07 GMT - 10/16/2012
21:45 GMT (Global-View.com) for October 17 (current rate 1.2996)
I wrote this before the spike higher on the Moodys lack of downgrade news but it is still applicable. One thing about the forex market is it does not like to get hemmed in for too long and this has seen the EURUSD move back above the 1.30 level. We are all probably looking at the same levels on top 1.3071 (Oct 5 high – just broken) and 1.3172 (Sept 17 high), the latter being most important. On the downside, expect the EURUSD to find support as long as it stays above 1.30, which will help set the tone going forwards.
This sets the stage for Wednesday when eyes of the world will be watching the results of the presidential debate and whether Obama can rebound. Conventional wisdom is that Romney is good for markets and risk but for me it is less clear which candidate would be better. In any case, the outcome could create some movement but market focus seems more on Europe at this time where there continues to be a reluctance to sell EUR awaiting the inevitable Spain request for a bailout.
A word about the Moodys decision to keep Spain’s rating unchanged. So it stays at crap rather than junk and gives Spain more time to drag out the process of asking for a bailout. This could have been taken as a EUR negative but as always, the reaction to news is more important than the news itself.
I posted this last night on GVI Forex and the Inner Circle and it pays to look at the big picture. Note the one hour trendline was broken but downside contained above 1.3060-71 support.
21:05 GMT (Global-View.com) for October 18 (current rate 1.3019)
It is time to take a look at the bigger picture and in this regard I have posted a weekly chart. As you can see, while there is room until the 100 (green) and 200 (yellow) mvas, the long term trendline/channel looms overhead at 1.3225. This increases the importance of 1.3172 and the pivotal 1.3200 level as they guard this long-term trendline. As the chart shows, key levels beyond 1.3172-1.3225 come in at
So, bottom line is 1.3172-1.3200 needs to hold to maintain what some (myself included) have been calling for a 1.28-1.32 range. On the downside, watch the one hour trendline (currently 1.3072) as lines in this time frame have acted as good short-term trend indicators of late.
10:35 GMT (Global-View.com) for October 19 (current rate 1.3050)
GVI Forex Jay Meisler 10:35 GMT October 19, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
- Stops run below 1.3040 but sharp snapback sugegsts it is part of a liquidating market
- 1.3050 will set the tone today
- 1.3076 remains key intra-day resistance
0 1.3015 is key support: One hour support, 50% of 1.2891-1.3140, around the 4 hour uptrendline
GVI Forex Jay Meisler 09:29 GMT October 19, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
I wrote this after the Moodys news spike and it is worth noting now that we have moved back to the ore- spike levels
Sometimes markets are forced to levels that they are not ready for and the price action after the Moodys news (maybe before if you believe in conspiracy theories and leaks) may be one of those cases. This would account for the cautious price action seen following the initial spike higher
GVI Forex Jay Meisler 01:37 GMT October 19, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
Edit Delete
1.3076 is current resistance. Support again below 1.3060 Range is too tight to last for long
GVI Forex Jay Meisler 23:40 GMT October 18, 2012
Forex Weathermap - EURUSD: Reply
The one hour chart has been a good guide and note how the market traded after the trendline was broken (as [ posted this morning. Chart shows 1.3060 as the breakout level (on the Moodys news) and it now becomes pivotal on the downside. As I noted earlier, 1.3050-60 is potential support and it contained the low (1.3054) during the NY meltdown but I could have made it 1.3040-60, which should be good support. If not, then 1.3015 gets exposed.
4 hour trendline still safe, currently around 1.3000
On the upside, 1.3080 (JP's level) blocks a return to 1.31.
GVI Forex Jay Meisler 22:29 GMT October 18, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
Friday's market: Best we can say at this point is there should be USD bids lying in wait by those caught underwater by the Google fiasco.
Suggests a thin Friday and a watch for EU Summit headlines
One limit on the EUR downside will be the increased risk of a Spanish bailout request after the Spanish regional elections this weekend.
10:35 GMT (Global-View.com) for October 19 (current rate 1.3050)
GVI Forex Jay Meisler 10:35 GMT October 19, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
- Stops run below 1.3040 but sharp snapback sugegsts it is part of a liquidating market
- 1.3050 will set the tone today
- 1.3076 remains key intra-day resistance
- 1.3015 is key support: One hour support, 50% of 1.2891-1.3140, around the 4 hour uptrendline
GVI Forex Jay Meisler 09:29 GMT October 19, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
I wrote this after the Moodys news spike and it is worth noting now that we have moved back to the ore- spike levels
Sometimes markets are forced to levels that they are not ready for and the price action after the Moodys news (maybe before if you believe in conspiracy theories and leaks) may be one of those cases. This would account for the cautious price action seen following the initial spike higher
GVI Forex Jay Meisler 01:37 GMT October 19, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
1.3076 is current resistance. Support again below 1.3060 Range is too tight to last for long
GVI Forex Jay Meisler 23:40 GMT October 18, 2012
Forex Weathermap - EURUSD: Reply
The one hour chart has been a good guide and note how the market traded after the trendline was broken (as [ posted this morning. Chart shows 1.3060 as the breakout level (on the Moodys news) and it now becomes pivotal on the downside. As I noted earlier, 1.3050-60 is potential support and it contained the low (1.3054) during the NY meltdown but I could have made it 1.3040-60, which should be good support. If not, then 1.3015 gets exposed.
4 hour trendline still safe, currently around 1.3000
On the upside, 1.3080 (JP's level) blocks a return to 1.31.
GVI Forex Jay Meisler 22:29 GMT October 18, 2012 - My Profile
Forex Weathermap - EURUSD: Reply
Friday's market: Best we can say at this point is there should be USD bids lying in wait by those caught underwater by the Google fiasco.
Suggests a thin Friday and a watch for EU Summit headlines
One limit on the EUR downside will be the increased risk of a Spanish bailout request after the Spanish regional elections this weekend.
GVI Forex Jay Meisler 15:29:42 GMT - 10/19/2012
One hour chart - trendline from last week;s low broken but 1.3015 still untouched
GVI Forex Jay Meisler 00:31:05 GMT - 10/22/2012
Jay Meisler's Daily Forex Weathermap - EURUSD
14:10 GMT (Global-View.com) for October 22 (current rate 1.3021)
It is hard to see big bets being made over the next two weeks with the US presidential race turning into a close call. The conventional wisdom is that a Romney win would be good for markets but perhaps only as a knee jerk reaction. It is still Obaba’a race to lose and in this regard neither candidate can afford a slip up in Monday’s final debate, which is focused on foreign policy.
As for the market, the close to the week seemed more of a reality check as US earnings continued to disappoint. If you look beyond the election the focus will then shift to the impending fiscal cliff and given the lack of bi-partisanship in the current Congress, this drama could play out into a last minute deadline....
Low just now was 1.2998 -- suggest reading my post below.
GVI Forex Jay Meisler 12:41:10 GMT - 10/23/2012
Reversion to mean? 1.2963 = 20 day mva
GVI Forex Jay Meisler 11:10:57 GMT - 10/24/2012
If you did a quick scan of the market you would say this is a down dollar day until you took a look at the EURUSD (and pegged USDCHF). Clearly a EUR cross driven day after the weaker German data, which is creating the tug-of-war FX market.
Watch 1.2940, which needs to become support and then renew 1.2950 to cool the downside and put 1.2950-75 in play again.
Note the one hour EURUSD chart, steep trendline has been broken (as noted last night) but broader trendline is still intact (currently 1.3027 vs. 1.3023 high).
This leaves 1.30 to set the tone in a market focused more on JPY crses than the USD despite the henerally weaker USD. Support at 1.2982-97 needs to hold to keep the focus on 1.30+.
Extract from last nigh's Forex Weathermap
Similar to Wednesday, 1.2950+ would need to be established to put the focus on 1.30, which seems more at risk than 1.29 although it felt the same way at this time yesterday. A move above Wednesday’s 1.2997 high would negate the downside risk while Wednesday’s low at 1.2920 blocks key support at 1.2891.
Note the one hour EURUSD chart, steep trendline has been broken (as noted last night) but broader trendline is still intact (currently 1.3027 vs. 1.3023 high).
This leaves 1.30 to set the tone in a market focused more on JPY crosses than the USD despite the generally weaker USD. Support at 1.2982-97 needs to hold to keep the focus on 1.30+.
Extract from last night's Forex Weathermap
Similar to Wednesday, 1.2950+ would need to be established to put the focus on 1.30, which seems more at risk than 1.29 although it felt the same way at this time yesterday. A move above Wednesday’s 1.2997 high would negate the downside risk while Wednesday’s low at 1.2920 blocks key support at 1.2891.
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