$ £ € ¥
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 12th to the 16th. 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 THE EURO.
FROM LAST WEEK -
The position trade for September is to SELL the EUR/USD in the 1.440 area looking for targets of 1.380 and 1.350 to exit with small position sizes with very loose hard stops around 1.457 and exit this trade prior to the FOMC meeting (Sept. 21) regardless if the target has been hit or if not stopped out.
Well this trade managed to get as high as 1.436 last week before promptly collapsing and is now at the 1.35 area. I am sort of annoyed at not filled in this area, but that why small sizes with very loose stops are being recommended in this volatile environment as I was able to get some filled at 1.42. Given the speed of this move, I now expect a 1.300 EUR/USD also in part due to an expected Greek default before the Sept. 21 FOMC meeting. 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.
EURO - A full-blown crisis looks inevitable now with a looming Greek default. The EU leaders are feckless at best and I no longer believe this crisis can be averted. From last week, “... expect the 17-member monetary union will fracture and the euro will be kaput. We are not at the panic-phase yet, but we should be as the situation is steadily deteriorating. As the run on the money markets continues, more banks have to go "cup in hand" to the ECB seeking loans to stay afloat. At the same time, ECB chief Jean-Claude Trichet will have to step up his sovereign debt purchasing program to prop up plunging bond prices to help not only the insolvent Greece (which be all intents and purposes has defaulted as no one can honestly expect them to continually roll over their short term 2-year maturity debt that stands in excess of 40% per annum) Italy, Spain, Portugal, Ireland and any other sovereign debtor to stay upright. This is a loan shark interest rate, but it is not the Mafia that is acting as the lender of last resort, it is the ECB backed by Germany and France who are also weakening under the stress. Someone's going to go belly-up and take down a good portion of the EU financial system along with them.”
Well looks like that Greece! 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 first in the first half of this month. Note the trades below.
From last week, “... the U.S. Dollar is no longer perceived as a safe haven and those that piled in looking for safety that will find themselves flat-footed and scrambling for the “door” to unwind those positions when a key level of 73.0 gives way for good. But first I look for and expect a minor USDX uptrend to about the 77-78 area that should reverse after the US FOMC meeting on September 21st and then the USDX downtrend should continue if not accelerate into the month of October. Remember, longer term, the US Dollar needs to complete a decisive breakdown from a symmetrical pennant below 73.5 and with the USDX now at 74.8 and an eventual pattern projected TARGET of 67 (coincides with a PFF SELL target of 64).” So far can take an “A” for that call.
WEEK AHEAD: The Dollar now near 77.7 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?$USD.
EUR is the inverse of the USDX and with the backdrop of a PPO on daily and weekly SELL signals. Look for the 1.344 to 1.348 as minor support for a bounce but trend is down so caution is advised on any bounce play here as 1.300, prior support/resistance could be seen here in short order as seen in the chart here, http://www.stockcharts.com/charts/gallery.html?$XEU. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
GBP - Cable just feel out of bed with the coincident dollar strength and is at range support at 158 but looks like a falling knife here and could be sold should 158 give way 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 to possible to 1.13 - 1.15 on a safe-haven bid still looks 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 1.04 and 1.00 areas hold, 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 and policy light but with the Greek default looming expect volatility on any minor news event. Key items of note are:
1. Mon. Sept. 12, 2011 - Chinese Bank Holiday
2. Tues. Sept. 13, 2011 - (4:30am EST) GBP UK CPI.
3. Wed. Sept. 14, 2011 - (4:30am EST) GBP UK Claimant Count Change; (8:30am EST) USD PPI and Retail Sales; and (5:00pm EST) NZD Official Cash Rate and RBNZ Rate Statement.
4. Thurs. Sept. 15, 2011 - (4:30am EST) GBP UK Retail Sales; (8:30am EST) USD CPI and Unemployment Claims; and (10:00am EST) USD Philly Fed Manufacturing Index.
5. Fri. Sept. 9, 2011 - (9:55am) USD Preliminary Consumer Sentiment.
There is no swing trade for today’s Asian-London-U.S. session due to extreme volatility other than to take some position trades based on the info above with real loose stops and small position sizes.
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
Risk Warning! Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. All information posted on this website is of our opinion and the opinion of our visitors, and may not reflect current situations and occurrences. Please, use your own good judgment and seek advice from a qualified consultant, before believing and accepting and acting upon any information posted here or on this website.
No comments:
Post a Comment