Tuesday, June 28, 2011

Focus on EURGBP Cross & EURUSD Live

Monday, June 27, 2011

Focus on the EURGBP Cross Rate

On a technical perspective the daily EURGBP daily chart formation has all the typical bullish signal in spite of the double top formation that it has been showing including the weekly formations. However, with the continuation of the volatility in the market, not to mention the back & forth scenario establish with the European debt crisis just adds to the wider price fluctuations seen through out the past few weeks.

Now with that said, the irony of the matter is that the idiosyncrasy of the GBPUSD / EURGBP has time and again been proven that such a formation would otherwise move to the direction higher than most would really expect. Currently, with the EURGBP taking its steps further higher is at the 0.8926. With a steadier Euro from fundamentally supported by iad for Greece ( for now) again have been quite supportive for the cross rate as well. The reaction counter to the USDX corrective movement at the 75.50 from a 75.96 high made it happen. The EURUSD steadier to normal higher move with a secondary move lower for the GBPUSD would fuel the next leg higher for the cross to attain it initial objective above the 0.9010 or better. Depending on the volumes and momentum build up would determine the time frame that this move would hold for the time being.

Plus the 'Rising Three Methods' identified on the candlestick formation would trigger technicians to re-establish long EURGBP positions the same way we have done so. This strategy is applied to maximize the profit and market potential of the EURGBP strength, with slight to lower corrective moves for the GBPUSD to fuel the direction higher. While the EURUSD holds just above the 38% Fibonacci rising fan formation as indicated on the chart. This has been our simple approach applied whenever such typical candlestick formation occurs. Keeping the short with protective trailing stops to liquidate/settle our shorts on the way up; while maintain a cross trade long ( short term daily basis) on the EURGBP to cover the probable loss on floating pips on the GBPUSD. Thus maximizing the market potential on both directions without having to sacrifice the quality of trades made from the past week of June 07 to the current time frame involve. Please refer to our continuing market strategies applied from June 07 from our market view analysis and the corresponding chart formation and video supporting these technical applications. However it may be, as the strategies made are with a substantial, managed and appropriate funds portfolio with a well defined risk appetite to follow whenever the opposite occurs.

Thursday, June 23, 2011

3Comparative Charts EUR-GBP Live

Tuesday, June 21, 2011

Euro reacts on Confidence vote!

As the market anticipates a crucial decision for Greece government led by PM Georgios Papandreou will survive as he revamped his cabinet to make certain that a continued support for austerity would be made. That is inspite of the continued strikes and protest against the programs. This has prompted the EURUSD to move higher to 1.4432 and the cross rate on the EURGBP to move back upwards to the 0.8883 high respectively. Yet, the unconvincing rally can only be considered to be a correction from its low; as no other significant momentum build-up for the Euro to move further was indicated. the only exception was the negative figures on existing home sales that added to the USDX to move lower back below the 75.05 near term support price level.

With commercials still dominating the market place, we do expect a continuation of this near-term rally on a daily basis with wider trading ranges that may run out of steam nearing the closing of the month's trading. Although, the FOMC and the EU June 23-24 meeting would be dictating the direction for the market by then leaving a much wider room for volatility to increase significantly.

And even the precious metals and stocks have been the beneficiaries of this continued market condition after experiencing a roller coaster ride from the past week's trading. With Gold prices back up at the USD1550.00 levels from a low at USD1510.45 and the Dow Jones at the 12190.00 levels.

Weighing Fund vs. Tech

Fundamental:

As volatility continues to increase speculative trades has been much lesser due to the wider trading ranges of the majors. This is equally true to the back & forth resolutions and market activity in the Euro Zone with Politics playing a greater role in determining the direction for the Euro. Meanwhile, the relief rally on the stocks have been seen with some reluctance from investors as the net change of the economy has not been that convincing. In spite of the USD recovery, a slow yet gradual momentum is still building for that much awaited USD rally from the past week that has led the Euro and the British Pound to move lower.

Although, a slight recovery is being made from the opening of the week's trading, the main focus would be the EU debt crisis weighing in on the market. Since the economic calendar for the US is fairly thin except for the existing home sales data expected. The upcoming June 23-24th meeting of EU leaders is being monitored well, as everyone is transfixed with Greece and their vote of confidence would help and ripple through the financial markets.

Technical:

Analysis back from the previous COT as released by the CFTC last June 14th; commercials were more prominent players in the market than that of speculative transactions and non-commercial participants. That is the very reason such volatility has been present were such position adjustments are made transforming a wider transition of prices from the previous highs of the European currencies and the lower US Dollar that led to the rapid recovery as seen from last week's movement. Keeping pace with commercials with speculative trades would be more risky as retail investors and traders would not have access to these information only after the release of the COT at the end of each trading week. The Volumes and Open Interest in the futures market would be a substitute although would not be able to replace the COT as it has more vital data/information to see. As almost all technical indicators are lagging behind and such confirmation remains after the fact or the market prices has moved.

Pls refer to a complete report and chart analysis in our website: www.megatrade101.com

Wednesday, June 15, 2011

FX Confirms Price & Trend Reversal

The catalyst igniting the USD rally for investors flight to quality investments and position adjustments were simply derived from the EU crisis where its ripple effects on the stocks, combined with the political rampaged of protesters fueled the EURO go move much lower than most have expected. However, the mixture of reports from the US side didn't do much to help from the start. That is why we have mentioned before that the market's condition and behavior has been more on the fundamentals on the EU sovereign debt crisis again that has been taken the limelight from the market.

Although, the yellow metal has had a roller coaster ride from its low price levels of USD1,510 - 1,540.00 trading range adding to the turmoil of the market participants. Especially with the recent report from the COT whereby a majority of open interest for long Euro may obviously been scrambling towards the exits as prices continued to move lower back down to the 1.4180 and 1.6180 respectively for the GBPUSD.

Meanwhile, the USDX has garnered enough momentum from its recent correction of 74.38 and is currently at the 75.50 bp as of this writing. True enough, the price reversal was indeed the first signal where the initial bottom for the USDX is now at the 73.15 -74.20 range levels called from our recent market view analysis dated the 07th of June 2011. And this was initiated with a speculative trade short on the EURGBP and GBPUSD. Simultaneously, hedged with along USDCHF at the 0.8378 levels. this has been a strategy to be able to maximize the market's potential on both directions of the trade. Although. a bit more expensive to maintain as increasing risk appetite were made based simply on a pre-calculated risk factor where the USD was too close from its all time low levels. Please refer to market view analysis dated on the above date of the 07th of June for a complete report on our website.

Do expect that the rest of the week's trading towards the month end would be a bit more favorable for USD bullish players with wider fluctuations for the currency pairs from hereunto. A long as the USDX would maintain its levels above the 75.05-50 basis points plus other fundamentals favoring a flight to quality position trades against the Euro then expect a build=up of momentum, increase in open interest and volumes in the next few weeks of trading activity. Of course, there will never be any real guarantees whenever one deals with the volatile currency market. Exercise caution and sound financial advise before taking such risk.

Tuesday, June 14, 2011

USD, EUR, GBP Volatility Increases

The market's price volatility on giving back its gains and losses has been the norm for the past several weeks with an average true range of about 120-150 pips on both directions of the market periodically done on a daily basis. As this also has been the trademark of institutional players dominating the market place.

Apparently, as seen on the corrective move on the US dollar Index touching a key point resistance price level of 74.80/90 basis point; have retreated back down to the current 74.40 corrective move. However, a second attempt would not be discounted on the next leg up as it gains momentum from position adjustments and fresh incentives for the coming week. Timing is obviously important. However, a struggle between bullish & bearish players between hedge funds and institutional banks has been dominant in the market place with a small percentage of speculative players barely surviving the wide trading range for the past week.

As the the USDX moved higher the previous week have pushed some forced liquidations from sellers turned bullish players of the EURO as the prices turned around reaching the 1.4321 from the previous registered high of 1.4695. currently, the EURUSD has turned around back up towards the 1.4458 as of this writing. And subsequently with the GBPUSD at the 1.6429.

The lack of synchronize trading price levels from the rest of the other major pairs have led to this correction while rebuilding the momentum for a follow-through in volumes have diminished open interest to increase. Unless some fresh incentives would lend to support the recent upward US Dollar rally then the obvius retreat would still maintain. Although, we would be watching price and market behavior more closely for any signals that may state otherwise.

For a complete report and analysis; pls. visit our website: www.megatrade101.com

Friday, June 10, 2011

EUR /GBP Price Reversal



Bloomberg's survey of market sentiments in stocks and the overall economic outlook have been more on the sluggish economy from jobs, housing and consumers feeling the pinch on commodity prices including the cost of oil causing a spike on the gas pumps have limited the market the ability to sustain its growth. With stocks tumbling to its support levels on the 12K levels made it all possible for traders to short on rallies.

However, the real cause for the European currencies to move lower was the arguments between the ECB and the other European leaders on the debt crisis. It has affected the Euro more than seeing a strength on the USD. Which obviously have been the case. In spite of the negative numbers from last week's report still prompted the USD to recover for a very timely. manner. Although, this does not assure a true trend reversal but it does have a good basis of a technical bottom price for the USDX at the 73.10/50 basis point and support levels. Currently at the 74.32bp have given a much awaited and reluctant traders to call this move a true reversal. Of course until such time whenever new lows would appear at the closing of next weeks trading.

However, talks of QE3 has been minimal but it has been up in the air from most of the news reports. But for the time being, the end-result for the EURUSD, GBPUSD and the EURGBP to move lower is in the making. And in line with the cyclical patterns ending of the 2nd quarter has been in the watch for sometime where a USD recovery is expected. Against all negative market sentiments for the US to recover overwhelmingly prevailing in the market place.

With that expectation, risk of shorting GBPUSD vs. our EURGBP cross would be a more likely strategy to protect the gains made while taking a short term Long on the USDCHF as a net position. With a very minimal risk on fresh new position to go long at 0.8378 USDCHF is well worth it comparing its historical price levels regardless of any market condition. A more speculative decision in the final event where momentum builds in a short term basis where the US dollar is showing it color as of the moment.

Tuesday, June 7, 2011

USD weakness continues



The highlight on Fed Chairman Ben Bernanke would be then main focus on assessing the US economy. This would be two weeks before the Fed policymakers would meet to discuss interest rates and their monetary policy. Which apparently would also focus on the coming end of QE2 this June. With the signs of negative sentiments due to the sluggish economic growth with higher unemployment figures does not rest well with the USD. The continuation of its weakness and the some EU leaders political resolve in helping to provide more support on the European crisis have helped the Euro advance its price levels even as of this writing.

Contrary to what other analyst and retail FX traders say that this movement is a correction from its downward trend is actually the opposite. As others have taken an earlier short position starting at the 1.4350, then to the 1.4550 and is currently at the 1.4660 levels. By the time it touches the 1.4880 price levels again then that's the time that they would change their sentiments to a more bullish tone.

We have maintained our stance from its major corrective movement and a price reversal back to it major trend at the 1.3968 low and closing above its 1.4280/00 the last two weeks sessions. However, the cross rates on the EURGBP has had more of a distinct configuration that we called a continuing bullish trend back to the 0.8900 or better since it also did the same corrective movement together with the EURUSD. Currently, at the 0.8920 levels from a registered high of 0.8944 at the start of this week's trading. Some unexpected pullbacks would be seen, as position adjustments and forced liquidation would take place within this week. As some earlier sellers on the Euro would consider throwing in the towel whenever a new high would register.

A mixture of sentiments would prevail after the GBPUSD showed some initial strength at the start of the week compared with the GBPJPY attaining its initial price objective lower at the 130.64 neckline support. Eventually, this support may also be retested but may meet some hedge strategies once penetrated to the low as USDJPY may do the same. This week's trading activity would be critical fro the Japanese Yen vs. the Pound and the Euro. So a careful watch should be taken.

Friday, June 3, 2011

Trend Following EURGBP /GBPJPY



The established trend from the major pairs such as the Euro and the Japanese Yen has made it all possible to follow and trade within it major trend, setting the pace for a renewed strength on the cross rate of the EURGBP in particular. Mixed reports with a continued bias for a USD weakness lent support for the EURGBP to go back to the 0.8890 from a pull back corrective move down to 0.8610 major support levels. Price reversal signals were eminent through the bullish candlestick formation that started the week of May 22, 2011

Unfortunately, call of a market reversal were seen all over the market place with talks of the Sovereign debt problems of Greece contributed to the negative sentiments for traders to short sell the currency pair. As the short-lived recovery for the USD also lent support for more sellers for the Euro. However, our market view report on the 'Major correction within a Major trend' has always been the basis of consistency to maintain our overall sentiments of a continuation of the Euro and the British Pound to continue its upward trend.

The Chart above shows the indication of a continuation of the upward trend by the EURGBP from its 0.8610 price reversal. Meanwhile, the current price as of this writing is at the 0.8881, slightly above the 50% Fib of its major correction trading range.

The contrary movement of the GBPUSD lower correction due to the negative report in UK and the remarks by Trichet for the Euro; lent the support for the cross rate to confirm our speculative move to go long for the EURGBP and an equivalent short hedge for the GBPJPY as indicated on the right hand side of our article. Currently working at the 131.70 low from a high of 135.10 resistance levels.
Some expected pull backs may occur as closing of the trading week and not a lot of positions would dare be establish by now especially NFP figures are expected.