-
Search Results
-
Market Update: Sparring Match
It feels like a sparring match in holiday thinned trading ahead of key events this week, highlighted by Wed’s release of US CPI.
EURUSD unable to shake a focus from 1.12 (currently trading softer back below). Day range so far: 1.1183-1.1217
US stock market bulls are hoping earnings season, starting with big banks reporting on Tues and Wed, will lift to new highs. US500 came close but paused today below its 7845 record high.
Crude oil is back to about unchanged after initially opening lower.
EURUSD 1 HOUR: Is low in or just a retracement?
Trying to build siome upoward momentum off the low and holding its bid while above 1.12.
Faces layers of resistance at 1.1263/68/77 ahead of the key 1.1285 level, only above the latter would suggest more than a retracement.
High so far: 1.1243. Above 1.1250 would be needed to put the resistance zone in play.
USDX (US DOLLAR INDEX DAILY: Would need to see EURUSD make a firm break of 1.1161 (1.1164 low) for USDX to make a run at its 102.94 high
[MARKET UPDATE] US 10-year Treasury yield rises to 5.3496%, its highest level since 2002; seeing broad Dollar strength, to detriment of global FX peers, and spot gold tumbles to underneath USD 4.1k/oz (Newsquawk)
EURUSD 4 HOUR: Focus back to 1.12
French yields up (after a relief dip yesterday) => EUR down (vs crosses as well) so keep an eye on whether this correlation continues.
EURUSD: Up momentum broken, 1.12 clearly pivotal in setting its tone. damage not fatal unless 1.1161 is broken, resistance at 1.1203, 1.1220-40
Market Update: EUR reprieve, Firm stocks, Weaker oil
EURUSD: Getting a repieve while above 1.12 that would need to break 1.1250 (Friday’s close) and 1.1261 (Monday’s high) to neutralize the risk and then 1.1289 to make this more than just a bounce off the low. Support at 1.1220 blocks a return to 1.12. High so far at 1.1247.
US500: Stocks supported by the dip in oil but 7800 remains an obstacle to exposing the 7818 record high.
XBRUSD: No matter which Brent market you trade, $100 will stay pivotal in eventually setting its tone (futures last at $98.61)
EURUSD WEEKLY: Crisis of confidence?
EUR has been slammed, both vs. the dollar and on its crosses, by French debt concerns in what appears to be a crisis of confidence.
As Bobby and I pointed out following the break of 1.15, the next key level (and potential target) was 1.1065 (today’s range: 1.1160 – 1.1260) and it has been a choppy road in that direction.
Whether there will be a run at 1.1065 will be dictated by how it trades vs. 1.12 (currently back above it) and if the market chooses the path of least resistance via EUR crosses should there be more selling.
Power of “50”
EURUSD just tested the “50” level at 1.1250 (held) cited earlier as the pivotal one to watch.
Why is the “50” level pivotal, not just in the EURUSD but across markets?
My Favorite Trading Secret: The Power of the “50” Level
USDCHF vs. EURCHF
CHF outperforminmg so far for the 2nd day with a weaker EURCHF pushing USDCHF down and causing EURUSD to lag (after diverging yesterday).
EURCHF low at .9305 paused 2 pips above next support at .9303, (below risks ..9270) and USDCHF paused so far above .8264 so keep an eye on this cross if trading the CHF.
EURUSD 1 HOUR: Watch 1.1250 and…
While the focus of trading will be on the reaction in bonds to the US jobs report, a focus in forex will be on the pivotal 1.1250 level.
Why?
1.1250 will dictate whether the market makes a run at the 1.1215 low or 1.1312, above which would indicate low is in for now and confirm a break of momentum to the downside.
Forex Market Snapshot
When 2 currencies move in opposite directions it indicates real money flows.
What stands out is the CHF trading up and strongest, JPY well off its low while EURUSD trades weakest and the USD is firmer elsewhere (EURCHF (down) is the underperformer. What does this suggest? Unwinding of carry trades and other crosses to start the new quarter as funding currencies are in demand (note equities down, yields tumble as mood turns risk off).
Market Update: Crosses weighing on EURUSD
When you see 2 currencies move in opposite directions vs. the USD it indicates real money flows. In this case JPY moving higher and EUR moving lower = EURJPY selling.
Note, market had more trouble absorbing the EURUSD selling component than the USDJPY selling.. See now whether EURUSD can hold above 1,1250
Keep an eye on correlations 2-year yield
Markets, expecially forex, continue to be hypersensitive and correlate with US bond yields moves, this time a dip in yields led by the 2 year as longer-term lag (curve steepener)…makes for fickle trading Price moves today… 2-year 4.92% => 4.854% / EURUSD 1.1254 => 1.1312 (resistance cited earlier has capped the upside) Followup: 2 year blips to 4.866% / EURUSD dips to 1.1293 A word about intra-day correlations: They work until they stop working
Market Update
Oil up, yields up, USD up (ahead of Friday’s US jobs report)
EURUSD: With no ley support nntil 1.1065, 1.12 increases in importance. Resistance starts at the former low at 1.1312. US500: Extended pattern around 7700 to 7 days in a row but inability to stay above it leaves it dependent on 7650 (tested again) holding to maintain the range and avoid opening the door to 7600.
Market Update: Month/Quarter End
A bit of a disconnect as month/quarter end flows dominate.
- OIl (up)
- Bond yields (still elevated but lower)
- Stocks; Rangebound but so far unable to regain a bid (e.g. US500 still below 7700)
- USD: Month/quarter end flows a factor: EURGBP (down), AUDJPY (down). GBPUSD up but so far meeting resistance at 1.3300, EURUSD lags. Keep an eye on the 4PM London fixing.
