The Wizetrade FOREX Blog

US Index Futures are just a little bearish as we move towards the open bell this morning.  The data calendar for the week is quiet until Wednesday morning when the Bank of England will release their inflation report.  We do have earnings this week, and after last year, everything seems to look better by comparison, so this could encourage some bullishness in the equity markets that might create a pull back against the recent USD Strength, but watch for the breakouts from the narrow ranges established overnight.

The G7 conference concluded with an agreement to keep stimulus in the markets for now, and the Euro zone was given the go ahead to work towards resolution of financial crisis in Greece, not to overlook housing in Spain and other challenges in Portugal.  The market reaction to all the goings on at the G7, not much of anything, which is better than having the bears run wild had exit strategies from stimulus been more vigorously discussed.

Watch the equity markets for the next couple of days for clues on Forex trends.

USD NEWS-08:30 US Non-Farm Payrolls, Annual Unemployment Rate, Average Hourly Earnings.

Keep in mind that a worse than expected number for Non-Farm will have an initial impact of USD weakness, but it will also weaken the equity markets, which could cause the USD to whip back the other direction.  Additionally, a better than expected report would initially strengthen the USD, but then the buying pressure in the futures ahead of the open bell would push the USD back down.

The tendency with Non-Farm has been that we will see strong initial moves in the first 5 minutes with a retrace in the 10 to 15 minutes after the report is released, and then a follow through that will trend based on Index Futures and Equity markets into the afternoon.

STRONG

Short                            EUR/USD                    1.3650*

Short                            GBP/USD                    1.5650

Long                            USD/JPY                     .8980**

Long                            USD/CAD                   1.0780

WEAK

Long*                          EUR/USD                    1.3850

Long                            GBP/USD                    1.5850

Short                            USD/JPY                     .8930

Short                            USD/CAD                   1.0700

The values in the T-chart data represent the next levels of significant support or resistance with trade opportunities to these levels, or breakouts beyond these levels. The use of Astrid denotes key sustained support or resistance levels, or counter trend opportunities in the market.

USD NEWS-08:30 ET Weekly Unemployment Claims, Prelim Non-Farm Productivity for quarter and Unit Labor Cost for Quarter, 10:00 am ET US Factory Orders

STRONG

Short                            NZD/USD                   .6850

Short                            EUR/USD                    1.3750*

Long                            USD/CAD                   1.0700

WEAK

Long                            GBP/USD                    1.5920

Short                            USD/CAD                   1.0600

The values in the T-chart data represent the next levels of significant support or resistance with trade opportunities to these levels, or breakouts beyond these levels. The use of Astrid denotes key sustained support or resistance levels, or counter trend opportunities in the market.

Recap from Yesterday's Blog into Today's action:

GBP/USD: asked you to look for a 180 with significant power for a swing...you got a swing short

EUR/USD: told you I wanted it to fail and that if it popped and remained above 1.40 we might not get the play....guess what. It popped and couldn't hold 1.40...you got the play short that we wanted.

USD/CHF: told you that if we could hold above 1.05 you might be able to work a swing trade out of it...low today was 1.0498 and it pushed higher for the swing we wanted marking highs at 1.06 today.

USD/JPY: remarked for I believe a 3rd day the range of 90/91, we ran the range today and popped above 91 only to the 91.27 level, this may be able to lead us into a direction to the long side if we can hover at/around 91 and push again with USD strength tonight.  You still want to be aware of the range.

USD/CAD: I told you that I wanted to see this one rally off of the 1.0550s...your low today was 1.0545.  It pushed highs today at 1.0630. Gave us exactly what I wanted.

AUD/USD: I told you that I wanted this one to come up for us and it did early in the session. I also mentioned that in order for it to really get going it would have to really come above the 0.89 level...it breached it by 15 pips and found its failure.

Tonight into Tomorrow: Always wait for the appropriate charts!

GBP/JPY: Stalk this one like mad!!! It has been a number of days that I've been saying this and I will continue to say it until it gives us a worthy break.  It is starting to show a preference to the long side.  We have to stay above 145 if we want it to grow. Pay close attention.

GBP/USD: This one is still annoying.  1.59 is an important number to hold or to break.  If we break down, be careful around 1.5830s.  I would prefer scalping or active opportunities on this one.  It hasn't really chosen a trend.

EUR/USD: We broke a trend line on the 180 with the Short swing that we wanted that came to be.  It could develop a bit lower, but 1.39 is an issue for us at the moment and of course on the high end of things we still need to watch the 1.40.  Your trading range may narrow itself a bit, I would evaluate scalping/active trades and then build into swing if the market allows you to.  If 39 holds then you may end up with some risky long side scalps as well.

USD/CHF: 1.06 is the number to beat for this pair.  If it can't breach it well and maintain above that level it wouldn't surprise me to see some failure of the trend.  Super Active/Active...build into swing only if it is paying you.

USD/JPY: See summation above.

USD/CAD: This one was bullish today which was what I wanted but now it is respecting some prior resistance levels.  Key chart for me on this one is the 60 minute chart. The 720 also comes into play as is does not look strong enough to hold.  I almost want this one to fail again, but it looks a little confused at the moment so I may not watch it all that closely.

AUD/USD: For a second day I would like to see this pull up again. Same rules apply as did yesterday.  Please review yesterday's blog post for details.  You have a couple of key levels on this one...0.8850 ballpark support and 0.8900 ballpark resistance.  Regardless of which direction this goes, you need to probably remain in an active trading mindset as you have additional secondary levels that aren't too far away.

That's it for today...be careful tonight and remember that we are pulling into the Thursday before Non-Farm/Unemployment....things could get a little weird in advance of what should be major news Friday.

Wishing you all the PIPs you can handle!

Lindsay Hall

Yesterday-Recap:

GBP/USD: -I asked you to watch support at 1.59 as it was holding us up...guess what your low for today was? 1.5902

               -Iasked you to pay attention to small opportunities with local breaks of the 1.5960s and 70s....guess where our current bid is 1.5966

EUR/USD: -I gave you a key to evaluate additional buying pressure around 1.3900...High today 1.39711, Low 1.3886.

USD/JPY: -I asked you to keep on eye on this one as it was ranging between 90 and 91 and sitting in the middle of the range...current bid is 90.38 with a High for today at 90.90 and a Low at 90.26.

AUD/USD: -I told you that the pair really needed to break 0.8930 to evaluate buying pressure...guess what your High was...0.8926, and what did it do? Sold off.

There is no way to be accurate with all that we talk about and evaluate and there will always be losses in addition to the winners, but I hope that following along helps each of you to establish your own observation patterns as well as gain a bit of insight from my perspective.

Today is rather boring to me and nothing jumps out as phenomenal.

Tonight I would really enjoy seeing failure of the EUR/USD and a return to trend, however if it pops and remains above 1.40 then we may not get that play just yet.

Keep an eye on the USD/CHF.  If 1.0500 holds us up then you may be able to work a swing trade out of it.

The GBP/USD is boring me to tears...Watch the 180 for significant power and if you are playing ranges keep it tight.  Lack of direction prevails and if you get the right charts then either side may be a swing trade opportunity.

USD/JPY: See yesterday and the 90/91 issue....needs to break one way or another.

USD/CAD: Trying to develop a third cycle down on the 180, but personally I would like to see this one rally off of support. Watch the 1.0550s and key on the 720 Minute light.

AUD/USD: Now that rate information has been absorbed, my preference here is Long, but we have to wait for the right charts to try and make a move.  It needs to come above the 0.89 level to feel its oats but at the same time you have to be careful of 0.90 as a psychological.  This one may need to have a couple of days to figure itself out.

My favorite to watch and stalk right now is the GBP/JPY...the Long term month offers us nothing.  The Mid term week gives us slight selling pressure with ascending lows. The Short term day is where I start to key in...no real direction for about a week...a lot of action and comfort in the 144s but this needs to be broken and that's what I want to see.  I don't care what direction it goes, but a swing is what I'm looking for...the 180 and 720 will be key.  Start small and grow into it b/c you don't have a lot of support for a true direction.

Wishing you all the PIPs you can handle!

Lindsay

Majors Review:

GBP/USD: 1.5832 is a number to watch as support from the Short term day chart.  Of course before we can get there we need to break through the 1.59 level which seems to be holding us up a little bit.  Keep a close eye on these support levels, but realize that your day chart is already a couple of days in on the short side so keep profit targets tight if you find a short side trade. Watch the 1.5960's and 70's on your smaller charts for local resistance breaks.

EUR/USD: Strong trend short still remains and little pullback today may need to additional short PIPs into tomorrow.  Key in on a 720 minute chart to see how slight the buying pressure has been.  If you are looking to take it back in trend then please keep it to super active or active opportunities should they arise.  Key light to evaluate for additional buying pressure would be the 180 Minute chart with resistance around 1.3900, keeping in mind the potential to headfake 20 high or so.

USD/CHF: Nice USD strong trend on this one, but again your day chart is overextended.  Even with that said as is key with the EUR/USD, it is so also with this one that the 720 is quite shallow.  It may lend itself to additional buying pressure, but please keep your trades more active  with tight targets.

USD/JPY:The Short term day has finally pulled up a little bit.  If this can continue, you may be able to find a swing long, but be careful because the heavy trends are mixed. You need to pay close attention to behavior around 91.00 and also around 90.00.  We sit directly between them at this point.

USD/CAD: Already delivered what I asked for this morning on Opening Bell...I mentioned that I wanted it to fail at the time that is was around1.0686 and it later fell to a low on the day around 1.0621.  I hope that some of you were able to catch that after the heads up on tradingviews.com this morning.

AUD/USD: This pair has failed as I wanted it to for the last couple of weeks and now I would be perfectly alright with it gaining a bit of strength.  It has rallied back a bit today, but the numbers and chart you need to watch are these: 180 Minute Chart.  This pair really needs to break above the 0.8930 level in order to have an attempt at breaking the latest negative trend.  Because of the fact that it has already moved up today, please be cautious with long side opportunities and keep them to scalping for active trades.

Come see me on Opening Bell via TradingViews.com on Monday morning where we weill cover all markets.

The USD has shown dominance in the market again today...let's run through potential setups for Sunday night.

GBP/USD: The Long term month is now angling slightly downward but still finds no strength or stability.  It has been months since we have had a really good trend on this one. The Mid term week is second timeframe and lows are coming up a bit.  Prior low from the weekly chart that we need to watch for is 1.5832.  Granted, we are still sitting around 1.6000 so we have a bit to drop before reaching that level.  The Short term day has stretched into a gorgeous bounce and the 720 as well.  Let this settle and realize what kind of power showed up to break the range on the 720. I wouldn't fight the short side on this one and I would wait to evaluate the charts for active to swing plays.

EUR/USD: Long term month still negative and pretty. Mid term week is strong and stable to the short side. The Short term day will be pushing a day 5 scenario so please use caution in trend expectations.  While the angle and separation are great, you are already four days in. Please evaluate scalping or active trades in trend.

USD/CHF: This one shows up better than the EUR/USD with the USD strength that has arrived. Long term monthhas the potential to try and reverse the downward trend, but we will have to wait to see if it can build additional power to do just that.  The Mid term week is gorgeous with great strength and stability to the long side. The bounce on the day chart is also much stronger than that of the EUR/USD. A fresh 720 may give you an opportunity to scalp into swing long, but keep expectations reasonable if the charts show up...just realize that even though our day chart has angle and separation we will still be day 5 coming Sunday.

USD/CAD: Long term month all mixed up, no help at all. Mid term week is strong but starting to slow with lack of stability. The Short term day is massively overextended so I am dying for scalps/actives short, but you have to wait for the charts and keep in mind the greater trend.

USD/JPY: Still completely confused. Month=sideways, Week=sideways for a long time, Day=sideways for about 5 days.  Scalp this or try to play a break on the 180. Be Careful! Not my favorite pair right now.

AUD/USD: Last week I told you how much I wanted this one to fail and it has done just that for us but now we need to be cautious.  Month sold off a bit but not in a dramatic fashion...could easily come back up.  Mid term week still strong and somewhat stable to the short side with support levels around the .8750s The Short term day is still showing selling pressure but the overextension means that I would not be surprised to see retracement long soon.  If evaluating short side...try scalping or active.  If you are truly looking for swing it may only come to you countertrend.  Pay attention.

Market bulls could make an appearance today, and the AUD has recently weakened to where it is trading at the extremes of support and resistance within its pairs.  Look at the Mid Term ranges and then watch the little lights.  AUD strength will be counter the more recent trend, so smaller positions and nimble trade management is in order.  Bulls in the equity markets are needed, and commodity currencies may receive some selling pressure from speculation that demand for physical commodities may be reduced if a forewarned downtern in the markets materializes.

The equity markets are quiet from the overnight as we saw follow through from yesterday's selling pressure in the US spill into the Asian Markets.  That bearish sentiment was supported with BOJ Gov. Shirikawa comments that he would take whatever actions were required to provide financial stability.  As the European Markets opened the bulls came out with an open above the previous days close on improved earnings, and some optimism that the US GDP would show improvement in the US economy.  This ahs US futures pointing a little higher going into today's open. 

The USD index held strong to recent gains, but we did see the JPY retreat which means the JPY pairs moved higher overnight.

Care should be taken in the markets today as the World Economic Forum is underway with global Central Bankers and Finance Ministers providing commentary throughtout the day from Davos.  These meetings are open to the media, and various attendees do speak to the press at this event.

China's Finance Minister has already voiced concern about overheated markets driven by US carry trades, where investors borrow the low interest US Dollar to make investments in foreign markets with higher yields.  That being said, today's investors seem to be encouraged by better than expected earnings news,and the prospect of a strong print of the quarterly US GDP.

Currency pairs have moved in narrow ranges overnight (this includes the Yen pairs with a weaker JPY) ahead of the GDP post, so support and resist that defines the ranges could be easily broken once the markets decide how to react to the news.