Oil is almost ready so is EUR/CHF, USD/CHF, EUR/USD....Get ready!

EUR/CHF Swing Trade confirms divergence:

 In this chart example we can see the trend, BLUE ABOVE RED.

Divergence on the 4 hour, Stochastic oversold.......

We need to get closer to the action...

Early Warning system confirms a trade..

The above chart shows the White star, divergence and now we have a golden cross..Look to BUY

OIL

Major support at 9200, if broken opens up 9000, however if price holds above 9200 Look to BUY..

The above chart confirm support with a yellow star, in an uptrend.

Notice divergence as well and OVERSOLD Stochastic

Early Warning System

The above chart goes closer to the market, White star, divergence.

We now await the Blue line to Cross the red for a BUY.

EURCAD is ready but....

In this chart we can see we have confirmation of a sell..with the trend....

Yellow star an excellent divergence tool.

CCI has divergence.

WA Explosion confirms red bar above the yellow line.

Looking for price to pull back to 13350, with 100 pip stop.

TECHNICALS ON MAJORS

Technical Analysis

EUR/USD

EUR/USD is traded at weekly PP
“It’s the U.S. economy that’s in the vanguard, and that explains why the dollar continues to advance. The Federal Reserve might exit its quantitative easing sooner than later, while the BoE is going to do more QE and the ECB is favored to do more.”
- Miller Tabak & Co. (based on CNBC)

• Pair’s Outlook
  The common European currency recovers, as the price breached the monthly S1 level at 1.2875 and weekly pivot point at 1.2885 yesterday. Seems that Dollar’s appreciation takes a break and the pair undergoes a small correction. Considering its possible extent, it is likely to see an attempt to overcome an intersection point of the 55-day SMA and weekly R1 at 1.2974. Possible target for our long position. However, a trend of the market depends on the FOMC decision regarding the monetary easing programme.
• Traders’ Sentiment
  Euro-bears enlarged their share by another 2% to 54%. It seems that investors foresee a stronger Dollar again, as the U.S. economy improves. Pending orders market is gently bearish with 54% of sell orders.

GBP/USD

GBP/USD gains above weekly PP
“There’s a bit of position squaring after the run we have seen and ahead of Bernanke this week, but the dollar remains a buy on dips. The Bank of England revised their growth outlook last week but it’s hardly the stuff of legends.”
- HSBC Holding Plc. (based on Reuters)

• Pair’s Outlook
  GBP/USD strengthened yesterday, as the exchange rate increased from the monthly S1 at 1.5191 to the weekly pivot point at 1.5340. The pair was pushed higher amid better-than-expected home sales data, indicating that the domestic economy might be really recovering. In case bullish sentiments persist this week, it is likely to see the price around a 1.5322 level, where the 55-day, 100-day SMAs merge with the weekly R1 level.
• Traders’ Sentiment
  Bullish share in SWFX market contracted by 5% to 55%, meaning that currently there are a lot of speculators, who are ready to profit from very small corrections. Placed orders segment is neutral, since both sides have exactly the same amounts.

USD/JPY

USD/JPY remains unchanged
“The yen has weakened in part because Amari tried to downplay his remarks. Amari’s comment hasn’t shown any clear change, but it’s milder in terms of slowing yen weakness.”
- Aozora Bank Ltd. (based on Bloomberg)

• Pair’s Outlook
  USD/JPY pair is in the middle of a battle between bulls and bears, since the price has been trading flat past two weeks. The pair fluctuates between 103 and 102 levels around the weekly pivot point at 102.43. A bullish trend should succeed, as some bank analysts deliver bullish signals for the rest of a year. On the other hand, traders say that the pair is overbought now (hence our short position), as the major indicators deliver warning signals. Mostly due to that the pair is moving sideways in recent sessions.
• Traders’ Sentiment
  SWFX marketplace investors shift towards bullish sentiments, as the buy side increased by another 7%, compared with the data last morning, to a 73% share. Waiting orders market is also bullish with 67% of buy orders.

USD/CHF

USD/CHF hovers near monthly R2
“Markets remain jittery about the potential for the tapering of asset purchases ahead of Chairman Bernanke's testimony to Congress.”
- Barclays Plc. (based on Reuters)

• Pair’s Outlook
  USD/CHF has already dropped 100 pips from a Friday’s peak, when it reached a 0.9761 level. Currently the pair is traded at 0.9663, where the monthly R2 and weekly PP are located. Further movement directly depends on the sentiments regarding the U.S. Dollar. If investors continue to buy assets denominated in the U.S. currency, USD/CHF should proceed its up-move while facing the resistance at 0.9799, where the monthly R3, weekly R1 and Bollinger band coincide.
• Traders’ Sentiment
  Investors keep their strong bearish sentiments, as the sell side has 71% of all opened orders in the market. Pending orders segment is slightly bullish, since 58% of waiting orders are to buy the buck.

GBP/CHF lets try again....

GBP/CHF  shows signs of a reversal here:

Divergence on the MACD, Divergence on the CCI, white star.

Head and Shoulders chart pattern..

Sell now

Eur/Usd Finished the day down.....

The EUR/USD finished the day down 116 pips at 1.3044. Economic data was quiet for the most part but weekly jobless claims out of the US came in better than expected at 323k vs. 3.35k forecast. The US Dollar was well bid across the board, with the majority of action taking place in the USD/JPY which crossed the 100 threshold for the first time in four years. This seemed to help provide additional USD buying against other pairs, and also helped limit advances in commodities which were primarily lower for the day. Economic releases out of the Eurozone in the coming session include German Trade Balance, Italian Industrial Production, and EU Consumer Price Index. 

After the better than expected jobs number past Friday, and another week of improvement in continued claims, some analysts view it as a sign the US Dollar could be set up for further gains in coming weeks. Furthermore, if we see continued gains in USD/JPY it could also be a tailwind and help the US Dollar remain well bid in other pairs.

According to Kathy Lien of BK Asset Management, “The timing of the drop in claims couldn't better for the U.S. dollar. The Federal Reserve was surprisingly optimistic at their last monetary policy meeting and their sentiment was confirmed by the stronger non-farm payrolls report and now the improvement in claims suggests that May payrolls will be solid as well. This will keep discussions of tapering asset purchases going inside the Fed, which should help dollar at a time when other major central banks are actively weakening their currency through lower interest rates or currency intervention.”

Although we did see a lot of economic data out this past week during the Asia session, releases during the European/US sessions were limited which likely helped keep the EUR/USD range bound the majority of the week. Furthermore, we didn’t hear much chatter from ECB Officials regarding ideas of further easing. These developments did not help clear up the technical picture which still remains neutral at the moment. 

According to Val Bednarik of FXStreet.com, “The EUR/USD saw a 100 pips quick slide in this American afternoon, triggered by a strong upward momentum in greenback, as USD/JPY broke above 100.00. Regardless the wild moves across the board, the EUR/USD manages to hold above the base of this past months range, respecting the 1.30/1.32 levels. However, this move has definitely put bears back on alert mode, and further slides may come along the way, with a break below 1.2970, 38.2% retracement of the latest daily fall signaling a stronger midterm fall, eyeing first 1.2880 static support zone.”

She went on to add, “As for the short term, the 4 hours chart shows still plenty of room to go, as indicators head lower around their midlines. Short term sellers will try to catch the rally on pullbacks towards the 1.3050/80 price zone, yet as long as below this last, downside remains exposed.” 

From a longer term technical perspective, the situation remains the same as it has since early April. The pair continues very choppy trading in a range between 1.3240 and 1.2950. Unfortunately, short term moving averages and momentum indicators are also stuck in neutral and not providing much help as to the future direction of the pair. Initial resistance will come in at 1.3074(the 20dma), followed by 1.3102 (the 9dma). First support sits at 1.3006 (the 50dma), followed by 1.2950 (bottom of range)

After a quiet week of economic data out of the coming week will bring a number of releases that may be the catalyst to finally break the EUR/USD out of its recent trading range. Should economic data out of the US continue to beat estimates (as recent employment data has), the EUR/USD may be set for further downside. 

In conclusion, some of the important reports out of the Eurozone to monitor next week include: German CPI, EU Industrial Production, German ZEW, German GDP, and EU GDP. Furthermore, the reports of the US to monitor will be: Retail Sales, NY Empire Manufacturing, PPI, Industrial Production, CPI, Housing Stars, and the Philadelphia Fed Index.

CAD/CHF is ready..

CAD/CHF confirms a downward move....

This chart confirms divergence on the CCI along with the yellow star.

Look to sell once the WA Explosion goes red and above the yellow line

EUR/CHF break out strategy

EUR/CHF is in a trend, or will be once it breaks 12324..

The white line is the resistance area, once this breaks we can expect it to go to at 12550

Look to buy above 12324

Notice the trend, Blue above Red, above green above white ALL stacking on top of each other!

Market Update

The dichotomy between hard economic data and asset market performance continues but unlike over past weeks at least there was some justification for the rally in equity markets following the stronger than expected US April jobs report. US non farm payrolls rose by 165k while revisions added 114k to previous months and the unemployment rate dropped further to 7.5%.

The data will offer the Fed some comfort perhaps reducing the need to expand further asset purchases in the months ahead. Nonetheless, the jury is still out and following the shift in Fed language at the FOMC meeting last week, in which they opened the door to increasing quantitative easing, it may take more than one, albeit important data release to completely erase expectations of more QE.

Further Fed thoughts on the jobs data as well as the plethora of disappointing data releases over previous weeks could emerge from the Chicago Fed conference this week, with several Fed speakers including Chairman Bernanke scheduled to speak. Given that there is little else on the data front market direction will take it cue from Fed comments.

Aside from central bank meetings in the UK and Australia the data slate is similarly thin elsewhere. No change is expected from both the Band of England and Reserve Bank of Australia but the latter is a much closer call given weaker data both domestically and in China. If the RBA does not move AUD will find some further support after rallying on the back of the jump in copper prices last week although gains will be limited as markets may just push back Australian easing expectations to the next meeting.

In the Eurozone, the final services confidence indices and German industrial data will be on tap and will add more evidence of the weaker economic trajectory and likely restrain the EUR and keep Eurozone core bonds supported. EUR/USD will find little else to give it direction, with higher US yields also likely to help keep any gains in EUR/USD capped, with resistance seen around 1.3220.

Japan has little on the data front too with trade and current account data in focus. The jump in the USD/JPY following the US jobs report will mean that attention will be on whether the 100 level can finally be cracked, with the spike in US 10 year Treasury yields likely keeping the USD supported versus JPY. I suspect that this level will not be breached unless US yields rise further.

GBP/USD is ready again..

GBP/USD is topping out at these levels and showing sings of a reversal

A white Star, the most powerful reversal indicator confirms it cannot go any higher :)

Divergence on the CCI, notice the CCI moving down, yet the price action is heading higher.

WA Explosion indicator is above the yellow line, this is the Trigger to SELL NOW.