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GreenForexTrading.com
ForeX forX-tra Gr€€n
Hi everyone,
In this e-mail I am going to give you my view on the market for the week of September 19th to the 23rd. The Live Trading Room is still closed for the time being as the upgrades with live charting has not panned out as expected so far and so position trades will be emphasized for the time being.
LOOKS LIKE IT IS STILL THE EURO AND NO GREEK DEFAULT YET.
FROM LAST WEEK -
“In the EUR/USD...the areas to look for are 1.342-1.348 as support for a bounce to go into 1.378 to 1.387 resistance to go short if not in.”
If you got in the 1.387 to 1.378 area short, now is the time to place stops to breakeven or lighten positions should you wish to carry the EUR/USD short position through the expected FOMC Meeting this Wednesday, September 21st.
EURO - A full-blown crisis still looks inevitable now with a looming Greek default. The dominoes should start to fall and even though I give 1.300 as a target for the beleaguered Euro, 1.200 is not outside being possible. So given such huge downside potential, you could throw a mini (0.1) contract or two at shorting the EUR/USD and still make a healthy chunk of change. Bottom line is I would not want to hold Euros very long now ... and for all you Euro holder the term “GOT GOLD?” applies here. All recent events taken together should send the EUR/USD significantly lower as we move towards the end of the September. This move looks to have already started from the long tedious trading band described earlier and suffered throughout the summer as seen here at http://www.stockcharts.com/charts/gallery.html?$XEU.
USDX - The only thing holding the US dollar up is the weak Euro. Otherwise the US Dollar appears vulnerable from two fronts. Since mid-2010, the US Dollar has been under siege due to the heavy debt monetization/US Dollar “printing” (if you can call it that with Trillions being created out of thin air electronically) of US Treasury and Mortgage Bonds, during a hyper monetary inflation exercise of grand debasement. The latest threat to the US dollar is a decline from another US recession that will likely result in another round of misguided money printing stimulus initiatives that will be ineffective. On September 20-21 we have the next FOMC meeting, which will likely announce more policies that will debase the dollar. Regardless of the next US move, or no move, the US Dollar is extremely vulnerable. Europe woes will give the US Dollar some life support for the time being. The simple Moving Average is set for a crossover, an event noticed by thousands of commodity and FOREX traders here at http://www.stockcharts.com/charts/gallery.html?$USD. Let’s face it...this suckers going down, just not yet. Looks like the Euro will continue to sink depending on the statement of the US FED.
WEEK AHEAD: The Dollar now near 77.1 on the USDX with the expected move to the 200-day moving average now complete just above at 78 but given the fear and loathing of the EUR means USDX at 80 could be seen before a significant reversal due to a potential Greek default. The USDX is on daily and weekly PPO BUY signals after a long consolidation. Enter to go short weak U.S. Dollar denominated pairs (like the EUR and GBP), as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD.
EUR is the inverse of the USDX and with the backdrop of a PPO on daily and weekly SELL signals. Look for the 1.378 to 1.387 resistance to enter shorts and 1.344 to 1.348 as minor support for a bounce but trend is down so caution is advised on any bounce play. The 1.300, prior support/resistance could be seen here in short order as seen in the chart here, http://www.stockcharts.com/charts/gallery.html?$XEU. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
GBP - Cable just fell out of bed with the coincident dollar strength and range support at 158 gave way and looks like a falling knife but is oversold and a bounce is expected before the downtrend can continue for targets of 153 and 150. For now the GBP/USD is a neutral play, as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP.
JPY - Looks to consolidate here but the next move is unclear longer term and shorter term could sell off some giving the USD/JPY pair a short term upside back to 80.0 as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
AUD - Last weeks’ recommendation to buy here in the 1.05-1.06 area longer term is scaled back. It is still possible to see 1.13 - 1.15 on a safe-haven bid but the AUD/USD is looking neutral here now. It earlier looked decent given recent U.S. Dollar strength but that was mostly due to the Euro weakness weighting and the uptrend looks to continue as long as the 1.00 area holds. Should the 1.00 area of support fail then a move to the 0.93 - 0.95 areas seem likely, as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XAD.
CHF - The swissie, a new addition due to increased volatility was in a solid uptrend till they decide to peg it to the Euro and is no longer a buy. This one pissed me off and is now a pair to avoid just like the JPY. That is why position sizes need to be small cause shit like this can happen anytime (if you have a limit order in) when we are trading are in a heavily manipulated interventionist environment. This is no longer a safe-haven play as even the Swiss have decided to flush their currency down the toilet as in the case of the yen and more failed interventions can be expected here too as seen here http://stockcharts.com/freecharts/gallery.html?$XSF.
GOLD & SILVER - Finally, a note on the ultimate currencies as I have been often asked if and how to trade these. While I believe in these trying times that a physical store of value should be maintained as insurance should the unthinkable happen as the paper gold and silver markets are heavily manipulated that I generally stay clear of them. Should you feel the need to trade them, as the moves can be very dramatic, I recommend this site at http://www.tfmetalsreport.com as I have seen no one else be as prescient in his calls as the Turd.
This week is report light and policy heavy with US FOMC announcement key. Items of note are:
1. Mon. Sept. 19, 2011 - Japanese Bank Holiday
2. Tues. Sept. 20, 2011 - (5:00am EST) EUR German ZEW Economic Sentiment.
3. Wed. Sept. 21, 2011 - (4:30am EST) GBP UK MPC Meeting Minutes Release; (7:00am EST) CAD Canadian CPI; (2:15pm EST) USD US FOMC Statement; and (10:30pm EST) CNY Chinese/HSBC Flash Manufacturing PMI.
4. Thurs. Sept. 22, 2011 - (3:00 to 4:30am EST) EUR French, German and EUR Flash Manufacturing PMI Reports; and (8:30am EST) CAD Canadian Retail Sales; and (8:30am EST) USD Unemployment Claims.
5. Fri. Sept. 23, 2011 - Japanese Bank Holiday and IMF Meetings.
The swing trade for this week Asian-London-U.S. sessions is to BUY the GBP/USD @ 1.566 to 1.567 with a STOP in the 1.563-1.564 area due to extreme volatility and a TARGET of 1.579 to 1.580 to fill last Friday’s gap for over 130 PIPS. Remember volatility and trades based on the info above with real loose stops and small position sizes depending on your risk tolerance.
That's it for this week. Any changes to outlook for the month or next week will be covered in the next weekly letter. I typically trade in the Live Forex Trading Room between 1am-6am Eastern Time. I hope to be hosting my regular 3-4 hour session and assessing and exploiting PIP opportunities as they arise shortly when the Live Trading Room is completed.
Enjoy trading and good luck everyone!
Mr. Green
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