This Blog Has Moved

For those of you who have my blog bookmarked… subscribe… read via RSS feed, I want to inform to all of you that my blog has moved.

The new address is

The look & content is the same.  All previous posts have been moved to the new domain.

Please update all reference to my blog.

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Midweek View: The Catalyst With The Next Move

I discussed how rough it was to trade the FX market past 2 weeks, which was also echoed by other traders.  It is normal for markets to be in such conditions, and it is normal for breakouts to occur when they get out of a such condition. A catalyst was needed.

Would it be Egypt (as expected by some traders Friday)?
Would it be economic figures/central bank announcements? Continue reading

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The Past Week & The Week Ahead (1/23-2/4)

Last week was a long week that provided a list of important economic figures (to name a few… several Central Banks Interest Rate decisions, US housing/consumer confidence/GDP, UK GDP), and political events (State of the Union, World Economic Forum, Egypt turmoil) which made for a very rough week. It felt like FX market sat there waiting for the economic numbers to be released before it decided to budge out of it’s tough price action (in some ways, it is still trying to budge out of it). Other traders echoed this sentiment on Twitter this week as well.

@dennisgjones Many great trade set ups have turned sour. When renowned professional #fx traders are beating their heads then you have to wonder.

@brasil61 FX currency traders ..if you were shaken rattled and rolled this month ..dont worry the best in the business were too – stay positive

@JamieSaettele these market will drive a trader mad – an overleveraged trader broke – i’d rather be mad than broke

Another interesting piece of sentiment I gathered from other traders most part of this week is a lot of people have different views of the market. Granted, it is normal, but it just seems more different views then normal.

As I reviewed the charts (challenging this week), the price action is making me really think about what is ahead next couple of weeks. My sentiment is telling me we are due for a correction (especially after Friday). A few things have to occur, plus confirmation, which will be discussed below.

Sometimes, a catalyst is needed & things need to be played out. This feeling was also expressed on Twitter by couple analysts.

@alaidi IRAQ, GRCE, EGPT; Cradles of Civilisation All Catalysts to Major Market Tops CHINA NEXT ? $FXE $SPX $SPY $USO $$

@JohnKicklighter Looks like we will end this week off with the first nudge for a reversal on the S&P 500; but we still need confirmation and conviction.

Note: Before the charts are reviewed, most of you know I like to use fib levels. After reviewing this week’s action (with & with out fib levels), I decided they will not be included in most charts in this week’s outlook.

US Dollar Index

Solely by looking at the chart, I see it going lower, at least testing the 61.8 fib at 77.46. Although, after reviewing the individual pairs, the US Dollar Index will be going up, as I see US Dollar strength ahead.

US Dollar Index

US Dollar Index


It was a virtual grind upwards for most of last week, with little luck of holding on to a position before the stop is triggered. Wednesday & Thursday was as close to sideways as you can get, but still closed positive. Price action was saying it was getting exhausted. It touched the 61.8 of the 1.4284 high/1.2869 low, thus another reason for a sell-off. Friday was the day it got out of it’s messy action. Confirmation is needed Monday & Tuesday on this though, and 1.3500 is key support if more downside will occur.

Euro / US Dollar

Euro / US Dollar


The Pound was a total mess all week. On the daily chart, it was consolidating on the upper trendline of the symmetrical triangle. One can make a case it is a sign it is preparing to break the upper trendline of the triangle to go higher. There were a few days though where the moves were pretty dramatic & messy. 1.5750 is key for further downside, but also watch out for the lower trendline of the triangle. The break of the lower trendline will prove of it wants to go lower.

British Pound / US Dollar

British Pound / US Dollar


I pointed out a bear flag last week, which was broken. Only then, it decided to go in a sideways direction, with dramatic moves up & down (this is why confirmation is needed). It is also in a tight symmetrical triangle. It has just gone upwards, but price action has been uneven since Fall 2010. It has all the elements of a major correction. The two support levels to look out for is 0.9832 & 0.9726. The break of the triangle in my opinion will not be enough for a correction, due to it’s inability to hold 1.000 for more then 2 weeks at a time.

Australian Dollar / US Dollar

Australian Dollar / US Dollar


I continue to be neutral in this pair. It is a pair worth looking at intraday, for market moving clues, but the daily cannot go above 83.00 or below 82.00. One thing I can take way from here is it wants to go lower, so look for a big move lower with a daily close below 82.00. It could very well happen with the turmoil in the Middle East.

US Dollar / Japanese Yen

US Dollar / Japanese Yen

Economic outlook: The State of the Union & the World Economic Forum proved to be non-market moving, but the turmoil in Egypt was one of several elements that caused volatility Friday (weaker then expected US GDP & stronger then expected US consumer confidence). The FOMC was close to a non-event as you can get, with little change in the statement. In the UK, Bank of England Governor, Mervyn King, said he will not raise interest rates any time soon & a worse then expected GDP was released. On the other hand, in Australia, there is talk of lowering interest rates, after a lower CPI/PPI & signs of a slowing economy. Japan’s debt was downgraded as well.

Next week, we have EuroZone & Australia interest rate announcements, US unemployment numbers, housing & PMI figures out of the UK. The wildcard is will happen in the Middle East, which remains to be seen. Regardless what happens, it is expected to be a market mover (especially if Saudi Arabia is next).

On a side note, if you are not watching Al Jazeera for Egypt coverage, then you are not getting the best coverage around.

This Week’s Major Economic Numbers (all times EST):

  • Monday: 8:30 AM Canada GDP
  • Monday: 8:00 PM China Manufacturing PMI
  • Monday: 10:30 Australia Interest Rate
  • Tuesday: 2:00 AM UK Halifax HPI
  • Tuesday: 4:30 AM UK Manufacturing PMI
  • Tuesday: 10:00 US ISM
  • Tuesday: China Bank Holiday
  • Wednesday: 8:15 AM ADP Unemployment
  • Wednesday: 4:45 PM New Zealand Unemployment
  • Wednesday: 7:30 PM Australia Building Approvals/Trade Balance
  • Thursday: 4:30 AM UK Services PMI
  • Thursday: 5:00 AM EuroZone Retail Sales
  • Thursday: 7:45 AM Interest Rate Decision (8:30 Press Conference)
  • Thursday: 8:30 AM US Unemployment Claims
  • Thursday: 10:00 AM ISM Non-Manufactoring PMI
  • Thursday: 1:00 PM US Fed Chairman Ben Bernanke Speaks
  • Thursday: 7:30 AM Australia Interest Rate
  • Friday: 7:00 AM Canada Unemployment
  • Friday: 8:30 AM US Unemployment
  • Friday: 10:00 AM Canada PMI
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The Past Week & The Week Ahead (1/16-28)

This week proved to be a challenging week, both in trading, and sentiment on the immediate term direction.  Some traders sat it out, but some still wanted to play along.  The good news is by weeks end, direction was sorted out, making the game plan for the up coming week a little easier.  There were some interesting economic figures released out of China, along with inflation numbers out of Europe, both igniting more fears.  On the flip side, confidence worldwide is increasing. Continue reading

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The Past Week & The Week Ahead (1/9-21)

This past week was an overall good week with plenty of opportunities, although it did not appear to be the case on Monday & Tuesday where plenty of traders wished they stayed on the sidelines.  China decided to mix things up at weeks end.  After doing weekend analysis, it appears Monday & Tuesday will be key days on the direction of the FX market.

I am going to start this week with the US Dollar Index, which was not included last week. Continue reading

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The Past Week & the Week Ahead (1/2-14)

It’s a new year & I told myself I am going to change some things in my life.  The list is to be kept private except for the fact I want to blog more.  So, welcome to my premiere 2011 post as I take a look at technicals in EURUSD, GBPUSD, AUDUSD, USDJPY on a daily basis. Continue reading

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Levels to Watch for in the US Dollar

Traders were greeted with a slate of key economic reports last week, interest rate decisions from the US, Euro Zone, United Kingdom, Australia & unemployment from the US (those were only the highlights). All of these events caused volatility traders either love or hate.

By weeks end, the price action became interesting. Members of the StockTwits community see bulls head for the US dollar. I am staying neutral & let the market action tell me where it is going. There are several areas I will be watching that will persuade me to go one way over another. Continue reading

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