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Current Currency Trading Opportunities
By Jamie Saettele, CMT, Sr. Technical Strategist
14 June 2011 22:30 GMT
SUMMARY
REMEMBER…ALWAYS USE STOPS
The
CBOE equity put/call ratio called a bottom yesterday and the rally is
constructive. We could get some weakness in the overnight session but
I’m looking higher towards 1296.75 September (at least) over the next
few days.
The bond market is
often considered ‘smarter’ than the equity market and I think we saw
that today as the yield curve steepened. The long end of the curve
soared. The widening of spreads between safer (short end) and more risky
(long end) debt is an indication of risk aversion. Expect this story to
gather steam in the months ahead – especially once equities start to
decline. Ironically, this is probably USD bullish as the USD is the only
currency that can satisfy liquidity demands in such a situation.
The implication from the above is probably a lower USD on balance over the next few days to week. I like…
-EURUSD to 14550, support is 14415 and 14380 (below 14320 negates)
-GBPUSD
above 16550 (as per the 3 wave decline from there), support is 16285
and 16345 (jobless claims may spark 2 way volatility) – below 14200
negates
-AUDUSD to 10840-10900, support 10655 and 10620 (below 10568 negates)
-USDCHF
higher to at least 8550 (early May low), support at 8420, below 8345
negates. There is the possibility of a sharp rally in the USDCHF. Swiss 2
year yields (green) are at their lowest since September 2010. The
difference between US 2 year yields (black) and Swiss 2 year yields are
at their highest since March – the yield differential has bottomed out
and the exchange rate appears to be lagging – it’ll catch up eventually.
The difference is plotted on the bottom of the chart. SNB is Thursday
by the way.
Jamie
Saettele holds the Chartered Market Technician (CMT) designation from
the Market Technician Association and is the author of Sentiment in the Forex Market. Send requests to receive his reports via email to jsaettele@dailyfx.com.
14 June 2011 22:30 GMT
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