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Wed, Mar 10 2010, 12:36 GMT
by Kshitij Consultancy Service Team

Kshitij Consultancy Services | View company’s profile

FX Thoughts for the day : 10-Mar-2010 – 1219 GMT

EURO, JAP YEN and EURO-YEN
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Read our current comments and trade recommendations on EUR-USD, USD-JPY and EUR-JPY by registering at
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Our comments on Dollar-Swiss, Sterling Pound and Australian Dollar are given below
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USD-CHF @ 1.0741/44…Holding long
R: 1.0802 / 1.0830-51 / 1.0886
S: 1.0722 / 1.0684 / 1.0650

Swiss touched a high of 1.0794 and has come down from there. We may see the pair test the immediate Resistance level at 1.0802 in the US Session today, but a break above it looks distant.

On the downside, 1.0722 is seen as the immediate Support level and may be honoured in the US Session today, however we see less chances of a break below it.

Overall, we see some volatility in the pair but the outer levels remain the same as mentioned in our Morning Comments ie 1.0722-1.0802.

Largely, it has been trading in the range of 1.0650-1.0890 for the last 3 weeks and we may see the pair move beyond this range in the sessions post the SNB Meeting, scheduled tomorrow.

Holding:
USD 10K Long @ 1.0730, SL 1.0625, TP open

GBP-USD @ 1.4925/28…Resistance at 1.50
R: 1.50 / 1.5050 / 1.5100-320
S: 1.4865-50 / 1.4800 / 1.4775

Cable fell in the Asian session today as expected and recorded a low of 1.4872. Though it has bounced back from its low, the continue to remain bearish and we might expect a test of the Significant Support at 1.4850 in the coming sessions. A strong break below 1.4850 might see further dip towards 1.4775.

Any sharp upmove is not looking likely now and we expect the immediate Resistance at 1.50 to hold. However, a strong break above 1.50 might increase the chances of a rise to 1.51.

AUD-USD @ 0.9159/62…Resistance near 0.9179-0.9200
R: 0.9179-0.9200 / 0.9231-42 / 0.9277
S: 0.9116-13 / 0.9089-63 / 0.9031-10

Aussie has appreciated in the European Session and may test the immediate Resistance region near 0.9179-200 in the US Session, still a break above this looks unlikely today.

We do not expect much downside but may see the pair test the immediate Support near 0.9132-03 region, though we have a lower weightage on this movement.

Essentially, we expect the movement within a range of 0.9132-9200 in the US Session today. Nevertheless, in coming weeks, we see the pair equipped for a rally towards 0.9350.

We have exited the long position entered @ 0.9107 with a profit of 58 pips.

Holding:
AUD 10K Long @ 0.9080, TSL 0.9110, TP open
As soon as the market trades 0.9180 bring TSL up to 0.9135.

Happy Trading!

Published on Wed, Mar 10 2010, 12:41 GMT

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Wed, Mar 10 2010, 12:33 GMT
by Benny Menashe

Finotec Group Inc. | View company’s profile

The British pound tumbled to below $1.50 on Tuesday on weak economic data and as credit ratings firms warned on Britain’s sovereign rating and those of its commercial banks. Political uncertainty about a hung parliament as the latest opinion polls showed a close race in key marginal seats also hurt the pound, as well as a general pullback in riskier assets. The pound was also hit after Fitch Ratings said Britain’s sovereign credit profile had deteriorated, and urgency for fiscal adjustment was greatest for the UK, Spain and France among the larger AAA sovereigns.
But it also said Britain was still within tolerance of its top-notch rating. “Sterling has been hit by comments by Fitch; the trade data showing weaker exports; and the earlier data on the housing market,” said Hans Redeker, global head of fx strategy at BNP Paribas. “Ultimately, the move on sterling is to the downside.” The GBP/USD is currently trading at $1.4990 as of 20:21pm, GMT, with a bullish trend.

The euro dropped versus the yen after Fitch Ratings Director Christopher Pryce said at a conference in London that while the outlook for Greece is “probably OK” in the short term, prospects in the next six to nine months are less certain. There are “clearly already the beginnings of dissent within the Greek cabinet,” Pryce said. The euro erased its loss versus the yen after the European Commission said in a draft report Greece is on course to meet its budget goals in 2010. The report will be discussed by EU finance ministers at a regular meeting in Brussels next week. “Over the past few days there was optimism that the austerity packages announced would lead to underlying improvement,” said Todd Elmer, global market currency strategist at Citigroup Inc. in New York. “‘Concerns over solvency in euro area will linger, and that will weigh on the euro.” The EUR/USD is currently trading at $1.3600 as of 20:43pm, GMT, with a bearish trend.

Canada’s dollar traded near its strongest level in over seven weeks as gains in stocks and persistent strength in commodity prices drove investors into currencies tied to economic growth. “Oil prices are not far off from cycle highs,” said David Watt, senior currency strategist in Toronto at Royal Bank of Canada, the nation’s biggest lender. “Ditto for the S&P 500. There is thus a clear triangulation that puts commodity currencies in a positive light, the Canadian dollar included.” Crude oil earlier declined as much as 2.1 percent to $80.16 a barrel before trading at $81.40. The Standard & Poor’s 500 Index advanced 0.3 percent. The USD/CAD is currently trading at 1.0262 as of 21:13pm, GMT, with a bullish trend.

Today’s Economic Events

Published on Wed, Mar 10 2010, 12:43 GMT

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Wed, Mar 10 2010, 12:25 GMT
by Cornelius Luca

CME Group | View company’s profile

Most of the foreign currencies futures open as expected in the US, with all the European and commodity currencies but the pound up, and the yen down. The pound, which remains the weakest of the major European currencies, was hurt today by an unexpected contraction of the UK industrial production. Meanwhile, the euro failed to benefit properly from strong regional industrial production reports because it remains marred by the Greek financial tragedy. The US economic agenda remains barren for a second day, adding to the lack of trading direction.

The Asia/Pacific stock markets ended flat, while the European bourses, oil and gold are trading higher. The US stock indexes are up in pre-open market; watch out for the declining volume seen in the past week or so.

The short-term outlook is still slightly bullish for the European and commodity currencies and bearish for the yen. The medium-term outlook remains bearish for the European currencies and sideways for the yen and the commodity currencies. My model is long all of the foreign currencies futures except for the yen and the pound.

Look for updates on my model’s positions on Twitter: They are free – for now. Then, you will have to subscribe to get the model turns in advance.

Analysis based on:

“Trading in the Global Currency Markets” – Prentice Hall Press, 3rd edition 2007

“Technical Analysis Applications” – McGraw-Hill, 2004

Overnight:

• China: The country recorded a trade surplus of $7.6 billion in February, down from the $14.2 billion surplus in January.

• Australia: Westpac Consumer Sentiment Index rose 0.3 index points to 117.3 in March.

• Australia: The leading indicator of employment fell to -1.019 in March from -0.939 in February.

• Japan: Core machinery orders in Japan fell 3.7% in January following the 20.1% surge in December. On an annual basis, machine orders declined 1.1% following the 1.5% fall in the previous month.

• Germany: The foreign trade balance showed a surplus of EUR 8 billion in January, down from EUR 13.4 billion in December. Exports fell 6.3% and imports grew 6% on a monthly basis.

• Germany: CPI was revised to +0.4% in February from 0.2%. The CPI was down 0.6% in January. The CPI rose 0.6% year-on-year in February, slower than the 0.8% growth in the previous month.

• France: Industrial production grew 1.6% in January following a revised 0.2% fall in December (from -0.8%).

• Italy: Industrial production grew a seasonally adjusted 2.6% month-on-month in January, rebounding from the revised 0.2% decrease in the previous month (from -0.7%).

• Italy: The final revision of the GDP for the fourth quarter of 2009 was -0.3%, slightly faster than -0.2% estimated previously. This contraction follows a revised 0.5% growth in the third quarter, when the economy ended five quarters of negative GDP.

• Eurozone: Formation of a rescue fund for Europe would not be a solution for Greece’s budget crisis, Jean-Claude Juncker, head of the group of euro area finance ministers, said.

• UK: Industrial production fell unexpectedly by 0.4% in January after recording 0.5% increase in December. Annually, the index of production fell 1.5% in January, smaller than December’s 3.7% decrease.

Today’s economic calendar:

• US: The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications increased 0.5% for the week ended March 5.

• Canada: No data

EUR- March

Luca Model: Long since February 26

The March euro opens higher in the US after closing off its lows on Tuesday and is trading in a short-term triangle. The short-term outlook is slightly bullish. The medium-term outlook is bearish but my model is long.

The 21-day moving average resists at 1.3670. The next caps are 1.3737 and 1.3800.

Immediate support is at 1.3573. Below 1.3520, the low of the downtrend is 1.3433.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Bullish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Slightly bullish

MEDIUM-TERM: Bearish

LONG-TERM: Bearish

JPY – March

Luca Model: Short since March 5

The March Japanese slipped overnight, as expected, after closing up on Tuesday. The short-term outlook is slightly bearish. The medium-term outlook remains sideways and my model reversed its long signal.

Initial support is at 110.50 from the 55-day moving average. The bottom of the Ichimoku cloud follows at 110.02. Distant support lies at 109.24.

Strong resistance is at 111.22 from the 21-day moving average. Above 111.56, distant resistance is at 112.49.

INDICATORS

Fast stochastics: Bearish (oversold)

MACD: Bullish

Ichimoku: Bullish

OUTLOOK

NEAR-TERM: Slightly bearish

MEDIUM-TERM: Sideways

LONG-TERM: Bullish

GBP – March

Luca Model: Short since March 9

The oversold March pound remained under pressure overnight following the weak industrial production report. The short-term outlook is sideways to slightly bullish though, as the worst is behind it. The medium-term outlook is bearish and my model is short.

Initial resistance is at 1.4990. The next caps are 1.5041, 1.5095 and 1.5174. The 21-day moving average resists at a very distant 1.5308.

Wednesday’s low is 1.4872. Further support is at 1.4778.

INDICATORS

Fast stochastics: Slightly bearish

MACD: Sideways

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways to slightly bullish

MEDIUM-TERM: Bearish

LONG-TERM: Bearish

CHF – March

Luca Model: Long since February 26

The March Swiss franc struggled higher overnight after closing off its low on Tuesday and is trading in a short-term triangle. The short-term outlook is slightly bullish. The medium-term outlook remains bearish, but my model is long.

Immediate resistance is at .9332 from the 21-day moving average. This is followed by .9393. Above .9442, distant resistance is at .9525.

Good support is at .9250. Further support is at .9208. The low of the downtrend is .9176.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Sideways

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Slightly bullish

MEDIUM-TERM: Bearish

LONG-TERM: Bearish

CAD – March

Luca Model: Long since February 26

The March Canadian dollar opens flat in the US after hitting the second high of the uptrend on Tuesday. The short-term outlook is slightly bullish. The medium-term outlook is sideways and my model is long.

The top of the uptrend is .9780. Above .9827, distant resistance is seen at .9898.

Immediate support is at .9730. Further support is at .9697 and .9669. The 21-day moving average supports at .9608.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Bullish

Ichimoku: Slightly bearish

OUTLOOK

NEAR-TERM: slightly bullish

MEDIUM-TERM: Sideways

LONG-TERM: Bullish

AUD – March

Luca Model: Long since February 26

The March Australian dollar remained firm overnight, climbing to a new high for the upmove. Check out the free-angle Fibonacci retracement on this chart; the Aussie is advancing within the 38.2%-61.8% channel now. The short-term outlook is slightly bullish. The medium-term outlook is sideways and my model is long.

Nearby resistance is at .9169. The next cap is .9200. The top of the uptrend is .9275.

Immediate support is at .9128. The next floors are .9091 and .9050. The 21-day moving average follows at .8994.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Bullish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Slightly bullish

MEDIUM-TERM: Sideways

LONG-TERM: Bullish

Published on Wed, Mar 10 2010, 12:47 GMT