12th March

EURUSD – Last week’s decline ended a sequence of 5 positive weekly performances in a row. A Bearish Engulfing pattern was formed and a significant lower high posted. Failure to maintain the lows does worry slightly but initial losses are likely in the coming week with 1.3014 the initial target.
An unchanged close to EURGBP trading for the week indicates investor indecision at current levels. Not overbought but it has capped close to the Bollinger Band top so expect losses this coming week. Key support level to watch for is .6744.
CABLE’s outlook is particularly dynamic one way or the other. A 2nd negative weekly performance was posted but the lows were sharply rejected. Prefer to be square. Key resistance level is 1.9535.
In USDJPY, this week has to begin with a positive tone as the last few days have shown a strong rejection of the lows. However, it is worth noting an important level, Marabuzo line of course, at 118.94. Failure to make an early daily close above that point would renew selling pressure.
Despite the very impressive recovery in FTSE, it didn’t reverse more than half of the previous week’s deterioration. In addition, a Bearish Gap left at 6268 hasn’t been filled, even after 5 up days in a row. There isn’t  a clear enough signal to be short but I wouldn’t be long at this point either. A move beneath 6177 would re-ignite negative sentiment.

8th March

EURUSD - was stronger than I expected yesterday and traded comfortably through the important 1.3144 level. Although 2 positive daily performances in a row have been produced though, Monday's sharp deterioration has yet to be reversed. That day's high of 1.3212 therefore, is now the key level. A daily close above is needed to continue positive momentum and even add to demand with a subsequent target of 1.3259.
CABLE - I continue to be on the sidelines in this currency pair as, despite 2 positive days in a row, the recovery from Monday's low remains weak. Nenetheless, without any sell signals what I think is underlying bearishness has not been confirmed.
Yesterday saw an 'Inside Day' created in USDCAD emphasising market indecision at current levels. Trade a breakout of the 1.1730 - 1.1824 range.
FTSE's recovery, although expected at the beginning of this week, has been more pronounced than anticipated. However, the top of a Bearish Gap - 6268 - approaches and I think this level will attract some fresh selling interest.

7th March

EURUSD - The 1.3144 Marabuzo line I mentioned yesterday has proved to be extremely effective and remains the key level. Confirmation of renewed Bearish momentum would be selling through 1.3104 with very important support @ 1.3072 the next target.
CABLE - Similarly to EURUSD the Marabuzo line, here @ 1.9323, held on a NYK closing basis. However, this time the decline from that level hasn't been impressive. Prefer to stand aside on this one for the time being.
USDCAD - Bearish Engulfing pattern formed on Daily Candle charts yesterday @ overbought extremes. Small Short here with position added to on a move beneath yesterday's 1.1730 low.

6th March

Despite this morning's rally, the downside remains the weaker side for EURUSD. 1.3144 (Marabuzo line) holds the key here. It is expected to hold on a NYK closing basis to maintain the bearish tone to trading. Intraday, a broader 1.3144/54 area should cap the topside on a 2-hourly closing basis. Expect renewed selling pressure to be triggered on a move through 1.3093.
CABLE - US$ strength Monday was more pronounced against the pound - a 3rd negative daily performance in a row was posted. This morning's rally should be limited in both size and time and the Marabuzo line level to be monitored here is 1.9323.
USDJPY is showing a more significant rally so far today. But given what has preceded it, thats less than surprising. Prices have hugged the lower end of the extended Bollinger Band (2.5%) for some days and consolidation is necessary. For the moment I think it is wise to stand aside but a failure to exceed 117.60 would be regarded as confirming Bearishness.
Finally, I mentioned in my notes Monday that buying interest was likely to be attracted in FTSE near the lower end of the Bollinger Band. This has happened but I must stress that although I won't short it yet, gains are not expected to be extensive in the immediate term.

5th March

FTSE - Lets get away from FX just for today to reflect the current stock market problems. FTSE's fall confirmed a weekly stochastic divergence problem (measured against overbought levels back last October). This means that these losses were a correction waiting to happen and is healthy, albeit painful. There is immediate support at 5974 (bottom of weekly Bollinger Bands - measured with a standard deviation of 2.5 which I prefer). This co-incides with a trend of higher monthly lows that dates back to March 2003. As such it should be given respect as it is likely to attract renewed investor buying.
Dow Jones - obviously a very similar story to FTSE but it does have deeper downside potential as the bottom of the weekly Bollinger Bands comes in at 11753 - again very near a monthly trendline, this time from the Dec 2002 low.
USDJPY is Trade of the Week though - Last week's fall re-emphasised investor demand for the Yen. Look for December's 114.43 low to be re-tested.
Finally, apologies for the current lack of charts. I have system restrictions at the moment which I hope to solve in the near future.

Last weeks trading results were;

2nd March

EURUSD - I was wrong yesterday about the topside being the weaker. Renewed selling pressure took prices back down to a key 1.3150/60 area. While that level holds the underlying tone should still be regarded as Bullish. Loss of that support and the corrective move is likely to focus on 1.3080. For the moment I prefer to stand aside.
CABLE - Similar to EURUSD, Wednesday's rejection of the downside was ignored. However, yesterday's losses and this morning's have yet to take out this week's 1.9517 low trade and this should be regarded as the key level. An hourly close below that point would then focus the market on 1.9460 and 1.9430.
What I did get right yesterday was the weakness of the USDJPY recovery. Prices deteriorated through the 117.48 level that I drew attention to but were unable to close below - Focus remains to the downside while spot is below 118.85 but immediate losses shoulb be limited close to 116.95.

1st March

EURUSD - while a small negative daily performance was posted Wednesday, trading didn't break the level I mentioned of 1.3160. In addition, the underlying positive tone is emphasised by the sharp rejection of the downside. Expect renewed demand with Bullish momentum increasing after 1.3259 is broken, targeting 1.3329.
CABLE - dipped a little further than anticipated yesterday. Isn't it always the way with this currency pair! However, the impressive rejection of those losses does keep the focus on the topside. Things are likely to remain volatile but once 1.9673 breaks a more sustained improvement should be looked for.
USDJPY I was right about the weakness of yesterday's rally with the Marabuzo level mentioned not even close to being threatened. Focus has now returned to the downside but I would expect this week's 117.48 low to remain intact today.

Feb Archive