Wednesday, September 22, 2010

EUR/USD Fibonacci levels to watch

Well who says Fibs don't work? LOL.
EUR/USD at 1.26 nicely bounced off the 50% level (1.1869 - 1.3344).

Now that we have breakout of the 1.3344 high we focus on 1.35 which is the 50% of the bigger 1.50 - 1.186 move.

Tuesday, September 14, 2010

Currencies Breakout versus the US Dollar

AUD/USD broke above psychological 0.94. Now in uncharted territory we can't really force a target - the Channel top gives a notional 0.9550 cap on the breakout move.

EUR/USD broke above 1.2920 and trading above 1.30 now. Trendline comes in 1.3050 but significant focus of the market will be attracted by the flat Resistance converging with the 200-Day MA at 1.3286.

GBP/USD has been a weak link especially on the crosses reflecting the global imbalances like GBPAUD and GBPCAD.

GBP/USD is trading above the 1.55 BOX top with immediate targets at 1.5580 and 1.57.

Monday, September 13, 2010

Volatility is making new lows but Bond Yields are turning

10-Year Note is making Bullish Engulfing pattern with low at the 50-DMA Support.
So we look for confirmation on the upside.

10-Year Yield made a Bearish Engulfment right at the 50-DMA Resistance.
ROC is in overbought territory but RSI is just signalling a bullish trend so a confirmation on the downside is needed as we saw the same situation above in the underlying bond price.

Volatility broke to a new Low as complacency seems to win over fear and markets are managing to run higher. My guess is we break out of this state of mind very abruptly but in timing we must be canny so I'd watch for a close above the Horizontal line.

Wednesday, September 8, 2010

Volatility is reaching support - Expect a RISE in Fear

Short term Volatility fund VXX is reaching a Support trendline. I expect Volatility to rise and this should mean fear will spread again.

Bonds are trading higher - Yields are easing

TLT has notably bounced off Gap Support line and TYX correspondingly is trading lower after reaching my notional target at 3.9% as I wrote a week ago. All is going okay in the New Normal...

Tuesday, September 7, 2010

Japanese Govt Bonds are correcting but running into Support

Yield is creeping higher inside the downtrend channel targeting 1.46%.

Weekly bond prices came off Overbought levels on the Weekly RSI however they are at a long term support level and will have to consolidate before the move resumes and certainly IF only the global re-flation is on the menu again.

Investment Cycle by John Paulson

This interesting piece was published and insightfully commented by ZERO HEDGE.
Here a link: