EUR/USD Continues...

The European-shared currency, as highlighted yesterday, was finally the victim of a corrective appreciation disguised in bear's clothing. After a promising upside day on Wednesday, risk appetite was nowhere to be found in the last US session, leading to solid bids in the US Dollar, as US equities suffered a major turnaround into negative territory. Part of the reason some commentators are blaming the strong USD performance across the board is due to the Senate's decision to not approving the last attempt to agree on spending cuts, resulting in the automatic spending cuts, also known as 'sequestration' to kick in today March 1st, which may shave over $85 billion worth of spending cuts in the current fiscal year. Kathy Lien, co-founder at BK Asset Management, notes: "We've been down this road before with the debt ceiling and survived." But as Kathy adds, here comes the kicker: "The Obama Administration has another 30 days to come up with a deal to cancel and avoid the cuts. The more important deadline is March 27th, when the government runs out of money and will be forced to shutdown if no additional measures are taken." Investors are holding out hope for a last minute deal, Kathy says. While market participants are holding out hope in the United States, on the other side of the pond the ability to patiently await for political news out of Italy is also the main focus. For now, and despite the Euro depreciation on Thursday, peripheral bond and equity markets also showed a good effort of calmness, with mixed low volatile activity, but nothing even close to break loose... The key is now wait for a possible grand coalition government or schedule second elections. Negotiations in Italy to form a coalition government are expected to be held in the week ahead, and according to Bank of Tokyo-Mitsubishi London office, "will leave the euro vulnerable for longer to the downside" although the bank says that "fresh elections are unlikely to be called in the week ahead", suggesting that talks may drag for quite some time. Investors will need to be prepared to be extra-alerted to all the possible risk headlines. The bottom line, according to Kathy, is that "the outcome will most likely be a weak government that is unable to deliver meaningful reform or austerity." Technically, as noted in a previous article, there is an ongoing bearish pattern in the EUR/USD, best noticed from the H4 chart, in which price has developed a sequence of predictable behaviours in each correction before the subsequent sell-offs. The dynamics of this pattern seems to suggest that the selling pressure is set to continue. As Valeria Bednarik, chief analyst at FXstreet.com, notes: "The hourly chart shows 20 SMA gaining bearish slope above current price while indicators head south in negative territory, supporting further slides. In the 4 hours chart technical readings also support the downside, with recent lows around 1.3010 as key level to break, targeting then the 1.2880 price zone."

Market Wrap

Market wrap Global market sentiment: There were mixed performances across major asset classes last night. European equities and bonds did well as prospects for a functioning Italian coalition appeared to have improved and ECB’s Draghi earlier affirmed policy would remain stimulatory. The Eurostoxx 50 closed up 0.8%, the Shanghai Composite earlier closing up 2.3%. The S&P500, currently up 0.3%, was restrained by a mixed bag of economic data, Q4 GDP disappointingly revised from -0.1% to only +0.1% but Chicago PMI exceeding expectations. Interest rates: US 10yr treasury yields were directionless, fluctuating between 1.87% and 1.90%. Eurozone peripheral bond yields fell, Italy’s 10yr -8bp, Spain -14bp and Portugal -14bp. Australian 3yr bond yields ground slightly higher from 2.74% to 2.77%. Currencies: The US dollar index (DXY) is around 0.5% higher. EUR fell from 1.3157 to 1.3058, influenced by an advisory report saying the ECB will probably discuss interest rates at next week’s meeting. USD/JPY ranged around the day’s high between 92.00 and 92.60. AUD followed EUR’s lead, falling from 1.0290 to 1.0228. NZD similarly fell from 0.8323 to 0.8266. AUD/NZD bounced off 1.2325 to 1.2380. Economic wrap US Q4 GDP growth revised from –0.1% to 0.1% annualised, from a marginal contraction to a marginal rise. The most significant drivers of the revision were net exports, a turnaround of 0.5 ppts, partially offset by a further 0.3 ppts drag from inventories. US regional business surveys: two up, one down in Feb. The Chicago PMI rose from 55.6 to 56.8 in Feb, its highest in almost a year, with production and orders both slightly above 60 but jobs easing from 58.0 to 55.7. The neighbouring Milwaukee-NAPM rose from 51.3 to 56.5, its highest since June. However the Kansas City Fed factory index slumped from –2 to –10 in Feb, its fifth straight sub-zero reading and its weakest in four years. US initial jobless claims fell 22k to 344k in the week ended 23/2 but that result may have been distorted by the Presidents’ Day holiday. Canadian current account deficit narrowed slightly from C$18bn to C$17.3bn in Q4. Meanwhile industrial product prices were flat again in Jan indeed they have been flat or falling since May last year, apart from posting just one monthly gain of 0.5% in Sep. Eurozone core CPI falls from 1.5% yr to 1.3% yr in Jan, its lowest since mid 2011. Meanwhile the headline CPI was unrevised from the flash estimate of 2.0% yr in Jan. In Germany, inflation eased from 1.7% yr to 1.5% yr in the preliminary Feb report. German unemployment fell 3k in Feb for a steady 6.9% jobless rate, revised up from 6.8% to 6.9% in Jan. With the German rate no longer falling the Euroland jobless rate is sure to rise further towards 12% (Jan figures due March 1). UK consumer confidence steady at –26 in Feb according to GfK. Outlooks Event risk today: NZ has Q4 terms of trade, Westpac expecting a sub-consensus flat result reflecting lower commodity prices last year. Australian data is minor – PMI, house prices and a commodity index. Eurozone unemployment and US inflation (core PCE deflator is the Fed’s preferred measure) plus US consumer sentiment will be watched tonight. NZD/USD 1 day: Likely to be restrained between 0.8225 and 0.8325 today. NZD/USD 1-3 month: The positive trend since May has been broken and we now targets around 0.8100 during the month ahead. Our view of a fresh high later in 2013 remains intact though. NZ 2yr swap yield 1 day: Opening today up 1bp at 2.98%. NZ 2yr swap yield 1-3 month: Following this correction, which could yet extend to the 2.80%-2.90% area, a rise above 3.20% should ensue. AUD/USD 1 day: A corrective bounce towards 1.0290 is expected today. AUD/USD 1-3 month: Remains inside an 18-month consolidation triangle, which should see it reach 1.0150 before an eventual break above 1.0600.

USD/CHF...Fights Resistance

USD/CHF potential sell likely.. Notice the red line, this is the long term trend resistance, price bounced off this. Some resistance to get through as you can see, notice the uptrend channel, which could be tricky. Yellow Star on the chart at the top.. CCI divergence confirms a likely sell off here.. SEE my recommended books HERE

USD/CAD confirms....

USD/CAD Confirms a sell on 4 hour chart, at major resistance.. In this example, we can see the red line which is major resistance, Long term... The price is finding it difficult to go higher. A WHITE STAR, the most powerful reversal signal Diverence on the CCI Trigger NOW CONFIRMED ON THE EXPLOSION..

EUR/AUD

EUR/AUD confirms a BUY on the 4 hour chart Notice the Yellow Star and excellent level of support, also notice the red line, which is also support from the previous long term trend. I hsall be doing a video on support and resistance on You Tube "philtheforex" shortly. CCI confirms divergence, and the EXPOLOSION indicator also Triggers A BUY Discover more here :

EUR/AUD is coming back..

EUR/AUD is coming back into the trend, notice the blue line above the red.. A yellow star, diveregence with the Trend... You could convert your chart to a trend chart to confirm the entry price...

GBP/CHF goes Long

GBP/CHF confirms a break of the downtrend ....

This is Day chart, showing the White Star

Notice the divergence on the CCI 

Highly likely to see a sharp move higher in the coming days/weeks...

GBP/USD is ready..

The GBP/USD is ready once more...

A White Sar has appeared, Strong reversal sign..

CCI is showing divergence and..

The Explosion indicator has gone green BUY NOW...

NZD/JPY Trend continues...

NZD/JPY Trend is still in tact, despite a slight pull back the price has held, an important fact, which confirms another leg up is highly likely

Although we have a white Star, which is likely to be resistance, notice the Blue line, Above the Red Line, Above the Green line.

With a strong uptrend line....NO resistance above 7450  :) No Target

GET THE NZD/JPY SIGNALS HERE

GBP/USD

The GBP/USD is showing signs of a possible reversal, by the time you read this we may have gone long....

Notice the White Star a great reversal Indicator, the strongest sign you can get..!

CCI divergence agrees with the White Star

Explosion Indicator also confirms, what are you waiting for!

MOUSE HERE GET THE SIGNAL SENT TO YOUR MOBILE PHONE NOW!

MARKET UPDATE

EUR/USD

In spite of reports by Bild that the ECB are worried that the EUR strength will hurt recovery in crisis states, the pair settled the session higher, supported by a weaker GBP after BoE’s King hinted that near-term upside inflationary risks may be temporary ignored. Until recently the ECB rarely commented on exchange rates and therefore this comment from the ECB, which hints that Euro is too strong, has caused weakness in the EUR currency. Elsewhere, it was reported citing G7 official, the G7 are less concerned about current level of JPY. Furthermore, officials noted that statement aimed at speed of JPY depreciation and seeks to avoid overshoot and that all G7 members accept no currency war right now and Japan policy to fix domestic economy. In terms of technical levels, supports are seen at 1.3364/25 and then at 1.3300. On the other hand, resistance levels are seen at 1.3577/98 and then at 1.3660.       

GBP/USD

GBP underperformed its peers on Wednesday as market participants digested comments from BoE's King who said the BoE will look through CPI to support recovery. King also added that while the BoE is ready to provide more stimulus, there are limits to what monetary policy can do and that more targeted measures must complement monetary policy. GBP also came under pressure in reaction to comments from the governor who said that investors view GBP depreciation as more likely than appreciation. The Q&A by King following the release of the Quarterly Inflation Report indicated that the central bank is becoming more flexible on inflation targeting and in turn puts emphasis on growth. In turn, this implies that the central bank will not hesitate to ease further, although it remains to be seen whether more Gilt purchases will be carried out or a more creative program will be introduced. In terms of technical levels, supports are seen at 1.5490/58 and then at 1.5414. On the other hand, resistance levels are seen at 1.5700, the 10DMA line at 1.5712 and then at 1.5810.

USD/JPY

The pair settled the session little changed and Japan/US 2y yield spread extended further into negative territory, which points to further JPY weakness. Nevertheless, the price action was somewhat choppy after it was reported citing G7 official, the G7 are less concerned about current level of JPY. Furthermore, officials noted that statement aimed at speed of JPY depreciation and seeks to avoid overshoot and that all G7 members accept no currency war right now and Japan policy to fix domestic economy. In terms of technical levels, supports are seen at 92.36/17 and then at 91.96. On the other hand, resistance levels are seen at 94.46 which is the Feb-11 th high and then at 94.99 which is the May 4 th 2010 high, as well as the August 24 th 2009 high at 95.10.  

EUR/CHF A Big Move coming...

EUR/CHF be patient with this one, although we are in profit the target of 12500 may take a while...

Yellow Star, not as strong as a White Star, but notice the Trend, BLUE line above RED......the price should continue nicely into more profits

Divergence as well on the CCI, a great set up....:)

AUD/USD gone too far?

AUD/USD looks oversold, especially if EUR/USD continues higher above 13400

A white Star has appeared, a strong indicator confirming Support

CCI divergence also a clue, whilst everyone is looking to SELL,  we will look to BUY

USD/JPY continues into profit...

Comments by Japanese Finance Minister Taro Aso sparked a fast and furious sell off in USD/JPY and yen crosses as traders booked their profits and dumped the pair ahead of the long Tokyo weekend. Speaking in Japanese Parliament Mr. Aso said, “The yen’s sudden move from 78 or 79 to 90 was not something we anticipated.”

That one sentence was enough to trigger a massive selloff in USD/JPY which quickly tumbled more than 150 points off the session highs to hit a low of 92.16 before rebounding to 92.50 by mid-morning european trade. Mr. Aso’s comments seem disingenuous at best since Prime Minister Abe specifically campaigned on raising the USD/JPY rate to 90.00. However, now that the pair has exceeded that target and has weakened further to hit 94.00 this week, Japanese fiscal authorities are clearly concerned with the pace of depreciation.

While Japanese officials definitely want to see further yen depreciation, the runaway rally that we’ve seen over the past few weeks may be causing both political and economic risks as the country now comes under strong criticism from its Asian neighbors while the market volatility creates hedging problems for its export driven corporate sector.

Therefore today’s statement by Mr. Aso was a clear calculated move to temper some of the investor flows into USD/JPY and allow the pair to consolidate around the 90.00-94.00 region while the Abe administration looks for a BOJ nominee and continues to assert it power over the monetary policy making apparatus.

With the weekend ahead, and serious damage done on the technical level. USD/JPY may be vulnerable to further sell-off in North American trade as shorts try to target the 92.00 level.

USD/JPY continues into profit...

Comments by Japanese Finance Minister Taro Aso sparked a fast and furious sell off in USD/JPY and yen crosses as traders booked their profits and dumped the pair ahead of the long Tokyo weekend. Speaking in Japanese Parliament Mr. Aso said, “The yen’s sudden move from 78 or 79 to 90 was not something we anticipated.”

That one sentence was enough to trigger a massive selloff in USD/JPY which quickly tumbled more than 150 points off the session highs to hit a low of 92.16 before rebounding to 92.50 by mid-morning european trade. Mr. Aso’s comments seem disingenuous at best since Prime Minister Abe specifically campaigned on raising the USD/JPY rate to 90.00. However, now that the pair has exceeded that target and has weakened further to hit 94.00 this week, Japanese fiscal authorities are clearly concerned with the pace of depreciation.

While Japanese officials definitely want to see further yen depreciation, the runaway rally that we’ve seen over the past few weeks may be causing both political and economic risks as the country now comes under strong criticism from its Asian neighbors while the market volatility creates hedging problems for its export driven corporate sector.

Therefore today’s statement by Mr. Aso was a clear calculated move to temper some of the investor flows into USD/JPY and allow the pair to consolidate around the 90.00-94.00 region while the Abe administration looks for a BOJ nominee and continues to assert it power over the monetary policy making apparatus.

With the weekend ahead, and serious damage done on the technical level. USD/JPY may be vulnerable to further sell-off in North American trade as shorts try to target the 92.00 level.

USD/JPY Uptrends

The USD/JPY is in a clear uptrend as we close our trade for + 167 pips, last month we bank many 1,000 pips trading Yens......Despite this has it gone too far?

In this example of the chart, we can see the Swing Software is confirming a likely sell off.

A White Star is a strong reversal point at 9400

Divergence on the CCI, using Fixed ratio money management the stop should be a close one if we get the trigger to enter a sell.....

GET THE TRIGGER HERE

GBP/CHF looks good..

GBP/CHF looks like a buy......

Against the trend though, so be careful..

Notice the Divergence on the CCI, positive divergence..

Also a white star has appeared.

NOW BUY GET THE SIGNAL TEXT TO YOUR PHONE...

GBP/JPY looks good again...

GBP/JPY continues it's uptrend, now our USD/JPY is in profit then this is likely to do the same....

We await the Trend system to trigger, by the time you read this we may have entered this trade.

We await the candle to go BLUE, and all moving averages to stack on top of each other, as before on this chart where we banked over 200 pips....

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EUR/CAD sells off...

The EUR/CAD now confirms a sell, although in an uptrend there is resistance on this weekly chart

A white star, confirms resistance.

CCI confirms divergence

We have a trigger....

SELL

MOUSE HERE TO GET THE SIGNALS

CAD/CHF confirms a swing entry..

CAD/CHF, now hits resistance on the weekly chart....

WHITE STAR, has appeared a strong reversal.

Divergence on the CCI and the TRIGGER BUY NOW...

MOUSE HERE FOR THE SOFTWARE

CAD/JPY break out trade

CAD/JPY looks promising specifically as we are in profit again on the USD/JPY..

A break above 9321 would give a higher high, on the charts, with little resistance..

Notice the moving averages stacking on top of each other, uptrend..