Gold is getting set...

The gold markets fell during the beginning of the Wednesday session, but as you can see bounced back above the $1600 level, to only reinforce the feeling of support at this level. The candle that was printed for the session was a hammer, which of course is bullish in and of itself. If we can get above the $1620 area, it looks like we could breakout to the upside and pick up $40 relatively quick. Is it $1660 that we start running into significant resistance, but we think ultimately the gold markets will go higher. 

For those on the Gold service expect a Text shortly....confirming exact Entry, Stops and targets.

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White Star..Divergence on CCI.....

Yellow Star, with the trend, hitting support, divergence Perfect!

Yellow Star, divergence, with the Trend

White Star, divergence, get ready..

White Star, divergence....lots more text coming!

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Video of Market Update, see new trade set ups...

Market Update, see how GBP/USD confirms 2 trades, compound your account....

Where the Hell is Spring?

The end of the Cypriot incident is not really the end, of course. The only way Cyprus can thrive is by imposing capital controls, even against its fellow EMU members—something that is expressly forbidden in the Maastricht Treaty and old-fashioned, too boot. The modern world is supposed to be free of capital controls. In fact, members seeking to join the EMU have to have “free markets,” among other criteria. The only case of capital controls in recent history is Malaysia during the Asian crisis. Then the IMF disapproved, but later came to agree that countries being victimized by currency wars (Brazil) could impose controls. 

From the Cypriot point of view, the controls seem to be the death knell for its place in the world as a taxhaven and money laundry. This is what the Eurogroup wanted—for the banking sector to contract to a reasonable ratio to GDP (with Luxembourg, whose banking sector is even more bloated than Cyprus’, escaping such a judgment). Quite how capital controls are going to work is not clear. Are Cypriots cut off from the rest of the EMU financial system now? And as the WSJ says, “… lasting damage has likely been inflicted on the Cypriot economy…. Cyprus could see its economy contract by 10% or more in the years ahead, economists said.” The sustainablility of Cypriot public debt is therefore just as questionable as it was before the crisis. Moreover, as the FT reports, Swiss and UK banks are scrambling to pick up the tax haven (and presumably the money laundering) business. The Cypriots see it as hypocrisy—they are being deprived of 50% of their GDP so others can take it. But the UK and Switzerland are not EMU members. 

Therefore, if you are an EMU member and your banks get into trouble, the Eurogroup will go along with any stupid idea you may have about defaulting on deposit insurance or capital controls. If you are a bank depositor, you are now required to evaluate the solvency of your bank. Technically, a depositor is a creditor, but hardly anyone has the qualifications to judge bank solvency or capital adequacy. That’s why we have deposit insurance in the first place. Capital flight, either slow or fast, is the inevitable outcome. The ECB’s regulatory subsidiary had better get going PDQ. Net-net, the euro is at risk of a steady drip-drip-drip of outward cash flows on the loss of confidence in the only EMU institution with any power and credibility, the ECB. As we wrote last week—cui bono? Switzerland, the UK, Hong Kong, even the US. Well, maybe not the US. As we see from the tepid euro relief rally so far today, the EMU has lost the confidence of its citizens. Nobody knows how far the loss of confidence will go, or when, but a river has been crossed and the troika did itself lasting damage. 

Elsewhere, the US Congress gave itself another two-week holiday out of Washington, having passed two budgets. This looks like progress (to some). We don’t get any big data releases this week so attention turns to the Supreme Court judgment on gay marriage (along with France’s), the bankruptcy of Stockton, CA and maybe how the Feds are going to run Detroit. More dead pigs (16,000) are found in a Chinese river and commentary on pollution and environmental destruction in China is being cacophonous. And it’s still snowing, not only in the US but also the UK. Where the hell is spring?

EUR/USD Saga Continues..

The bloc currency remains trapped around the proximity of the 200-day moving average on Tuesday, flat-lining in a wait-and-see mode against the backdrop of increasing fragility in the Cypriot front. At the moment, seems that both capital controls and the final levy on deposits above €100K would dominate the headlines in today’s session, as the re-opening of the local banks on Thursday looms. 

… Fears of contagion on the rise

The inaction seen in the EUR/USD since 2013 lows on Monday around 1.2830 has extended overnight alongside the lack of news emanating from Cyprus. Furthermore, that scenario remained pretty much unchanged into the European open, as markets seem to favour the isolation against the ongoing rumours that have been dominating the price action as of late. 

Nonetheless, the D-Day in Cyprus would definitely be Thursday, when the banking sector meant to re-open its doors to the public. The subsequent reaction of both depositors and banks would be under the microscope, as well as any echo on the Spanish and Italian debt markets – the next victims?.

Anyway, investors’ confidence remains badly hurt and it is posed to keep on taking the brunt of further (surely unpleasant) events in Cyprus. Furthermore, market participants continue to be vigilant, paying close attention to comments by EU and Cyprus’s officials after yesterday unfortunate declarations of Eurogroup’s J.Djisselbloem. After all, words rather than facts have been the main drivers since the crisis in the island aggravated. 

In the technical field, the cross returned to trade within the downtrend channel set from February highs, after the attempt to follow through the psychological limestone of 1.3000 on Monday did not prosper. It meanders around the 1.2870/80 region, home of the 200-day moving average and December 2012 lows.
Initial north barrier sits around 1.3075 – Fibonacci retracement of 38.2% of July’12 – February’13 upside – ahead of 1.3107 (March 15th high), If strong impulse persists, then 1.3134 (March 8th high) would be exposed. 
Further downside however would expose the region of 1.2660/80, home of the November lows and the 61.8% retracement.

Euro Ignores Drop in Ifo Hopes for Cyprus Resolution

Market Drivers March 22, 2013

IFO misses but market doesn't move as all eyes on Cyprus USD/JPY selling accelerates on profit taking, nothing new from Kuroda Europe -0.56% Nikkei -2.35% Oil $92.51/bbl Gold $1612/oz.

Europe and Asia:

AUD Conference Board Leading Index 0.2% vs. -0.1% EUR German IFO - Business Climate 106.7 EUR German IFO - Current Assessment 109.9 EUR German IFO - Expectations 103.6

North America:

None

The IFO report missed its mark declining for the first time in 5 months, but the news had little impact on the EUR/USD which remained above the 1.2900 level in morning European dealing as all eyes remained on Cyprus. The situation in Cyprus remained unresolved as the Finance Minister failed to get an extension of the loan from Russia while the Parliament continued to debate an alternative plan that involved the possibility of monetizing some of the country's gas reserves via a bond offering.

With no concrete plans on the table pressure continued to mount on Cyprus and Angela Merkel added to it, by stating flatly that the country's business model of attracting offshore deposits was dead irrespective of how the banking crisis is resolved. A spokesman for the Cypriot Parliament is expected to make an announcement this afternoon and the current hope in the market is that some sort of a solution may be reached before the week-end.

If Cypriot lawmakers are unable to reach some sort of a solution before the markets close, the downward pressure on EUR/USD may resume with traders fearful of holding positions over the weekend. For now the pair remains remarkably resilient on hopes that some sort of a solution will materialize.

Meanwhile as Cyprus continues to command attention, the news on the economic front shows further deterioration. The IFO sentiment survey dropped to 106.7 from 107.8 forecast, as fresh concerns about the EZ credit markets clearly weighed on business sentiment and demand began to taper off. This is the first drop in the IFO reading since September and may be an ominous sign that the economy in the EZ is beginning to worsen rather than improve as the quarter progresses.

This possibility is being ignored by the market right now, as Cyprus dominates all flow, but when traders attention turns back to fundamentals the prospect of negative growth in the EZ not only for this quarter, but perhaps Q2 as well, could start to sink in and that in turn could put fresh downward pressure on the unit after the Cyprus crisis is off the front page.

EUR/GBP the First EWS text

EUR/GBP shows divergence on the 4 hour, White Star, in an uptrend on the 4 hour and daily..

In the next chart we can see...

Once more on the lower charts we see the White star, notice the WA Explosion has gone green above the yellow line..

The Stochastic confirms upward direction, from an oversold position and divergence.

Upgrade your signals to this package. In this instance we expect over 4 times risk

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AUD/USD finds resistance..

After hitting session highs beyond the key resistance of 1.0400, the Aussie dollar trimmed those initial gains and is now back to the red territory trading in the vicinity of 1.0380

The RBA released its minutes from the last meeting, although the AUD reaction was muted. “The Minutes added nothing particularly new, again reiterating that with “inflation likely to remain around the middle of the inflation target, members judged that there would be scope to cut the cash rate further to support demand, should that be necessary”, commented Adrian Foster, Analyst at Rabobank.

The cross is now losing 0.19% at 1.0381 with the next support at 1.0365 (MA200d) followed by 1.0332 (hourly low Mar.18) and then 1.0309 (MA10d).
On the upside, a surpass of 1.0401 (Upper Bollinger) would bring 1.0414 (61.8% of 1.0599-1.0110) and finally 1.0425 (daily cloud top).

Market Wrap..

This mornings institutional research has a distinctly Anglo-Saxon feel to it. The revival of USD is sharply in focus, with many analysts highlighting the numerous reasons for believing that the dollar is fighting back while BoE Governor King´s interview last night has come under scrutiny after he stepped back from claims of verbal intervention, suggesting that GBP had found fair value.

USD

Sebastien Galy of SocGen notes that a trilogy of risk factors are dominating the FX market and they are all pointing towards a stronger dollar. The three issues at hand are the US economic revival, diverging monetary policy expectations and the unfinished Euro area crisis. This belief if shared by Nomura strategists Jens Nordvig, Saeed Amen and Matthew Slade who add US equity related inflows as being a further factor worth considering when examining USD strength. David Bloom of HSBC notes that USD has risen since January and we expect the rally to continue in the short term. He feels that there appears to be an asymmetric bias where both strong positive and negative data could cause the USD to strengthen and for the USD it seems, for now, to be a case of: heads I win, tails you lose. On another note, Jim Reid of Deutsche Bank notes that last night, the Fed announced that it had approved the capital plans of 14 banks in the US in its Comprehensive Capital Analysis and that US banks will be interesting to watch as the US opens. 

GBP

Derek Halpenny of BTMU notes that last night BoE Governor King spoke out to step back from claims of verbal intervention, describing the pound as being “properly valued”. However, he adds that in the context of global focus on currency strength, there was little else that King could really say. Jim Reid of Deutsche Bank adds more colour, writing “The outgoing BoE governor said that “there is momentum behind the recovery that’s coming” and “during the course of 2013 we will see the recovery come into sight”.” David Bloom of HSBC comments that GBP has fallen quite sharply since the beginning of the year, but the fall has actually been relatively modest in historic terms. He writes, “GBP remains above ‘fair value’ levels and we believe the currency could decline further.” Meanwhile, Danske Bank analysts note that GBP stands out as the market is pricing in the probability of a shift in the UK monetary policy framework as we approach the March 20 budget report

NZD/USD is ready,,will the EUR/USD go higher?

NZD/USD has confirmed a buy

The price is now 8221 and we have a WHITE star

The CCI has confirmed divergence as well...BUY NOW

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EUR/USD capped at 13000

Market Drivers March 12, 2013

Euro rally fizzles as pair hits technical resistance on the crosses
UK IP, MP miss sending GBPUSD below 4850 but cable rebounds to 1.4900
Dow -0.06% Europe -.25% Nikkei -.28%
Oil $92.69/bbl
Gold $1591/oz.

Europe and Asia:
AUD NAB Business Confidence 1 vs. 3
JPY Consumer Confidence 44.3 vs. 43.0
EUR German CPI 0.6% vs. 0.6%
GBP NIESR GDP Estimate -0.01%
GBP Industrial Production -1.2% vs. 0.1%
GBP Trade Balance -8.2B vs. -8.8B

North America:   USD Monthly Budget 12:00

The EUR/USD rally fizzled by midday North American trade as the pair ran into resistance at key levels on the EUR/GBP cross and reports of some EU banks seeking capital provided intra-day traders with an excuse to lock in profits.

Earlier in the session the pair rose to a high of 1.3073 on the back of strong buying in the EUR/GBP cross which hit a high 8777 before meeting stiff resistance and dropping back to 8740 by the end of European equity trade. A large investment bank reportedly put out a buy recommendation on the pair driving it to session highs.

The long EUR/GBP call was likely driven by the belief in persistent pound weakness rather than euro strength. Earlier at the start of the European session UK saw another horrid set of numbers from the manufacturing sector which sent GBP/USD to fresh yearly lows below the 1.4850 level. UK Industrial Production declined by -1.2% versus 0.1% eyed while Manufacturing Production sank -1.5% versus 0.0% forecast. This was the worst reading since August of last year and suggests that the manufacturing sector will weigh heavy on Q1 GDP as the contraction accelerates.

Today's data shows that the massive divergence between UK's manufacturing and service sectors continues to expand with the former contracting sharply while the later remains relatively robust. Although manufacturing is a small part of the UK economy it will nevertheless impact the overall growth and as such remains an anchor across the neck of sterling. Today's NIESR GDP Estimate indicated that growth is likely to contract by -0.1% in Q1 of this year.

Despite the negative news, sterling found some bids underneath the 1.4850 level and stabilized in the aftermath of the release. Although the UK data is undeniably atrocious, the pair is so grossly oversold that the downside may be limited barring further bad news. With services sector and labor demand remaining relatively resilient 1.4850 could have marked a near term bottom as the pair consolidates and tries to recover towards the 1.5000 figure over the rest of the week.

As to EUR/USD, the pair remains in a very tight trading range between 1.2950 -1.3050 as market participants await the next round of economic and political developments in the region. It appears that EU policymakers are coming to the conclusion that further austerity measures in the periphery economy may be counterproductive and if this tilt towards the "relaxation of austerity" takes hold, the EUR/USD may find a stronger bid on the assumption that the EZ economy will finally begin to recover.

NZD/JPY sells off

NZD/JPY sell off from the highs and confirms a sell..

Notice the White Star, amazingly accurate reversal indicator on the MT4 charts..

A strong divergence signal on the CCI, now go down to the 4 hour chart and see what your chart looks like...

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EUR/JPY retracement

EUR/JPY looks promising for a sell towards 12180.....a nice profit

Notice the yellow star, CCI divergence..

Sell

EUR/CHF confirms....

EUR/CHF now confirms a sell...

A yellow star at major resistance, with the continued weakness of the Euro..

Divergence on the CCI, agrees and the Explosion indicator gives us the Trigger, target 12150, the previous low.

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AUD/NZD Reaching resistance..

AUD/NZD now is reaching the resistance


 

 Notice the red line, showing the downtrend and how the price has now reached it...We also have a Yellow Star confirming a reversal signal, should start to head for 12150 shortly.. Lets see

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EUR/USD heads higher

The dollar weakened broadly during the New York session and fell versus most competitors after the global central banks remained on hold at today's monetary policy announcements. The euro advanced, moving off recent lows sub-1.300, after the ECB held its interest rates steady. In the subsequent conference, ECB President Mario Draghi said that even though the decision was not unanimous, the ECB never precommits. Draghi also sounded optimistic by saying the economy will gradually recover and played down the Italian elections effects on the eurozone. Comments from Draghi alongside better-than-expected US jobless claims helped to boost the EUR/USD which rose above 1.3100 for first time in a week. So what's ahead for the EUR/USD after the ECB? Tomorrow's US jobs report should provide some direction for FX markets heading into next week. "As the week has progressed the here been some improvement in market sentiment, helping to support gains in U.S. European equities and many foreign currencies", says Nick Bennenbroek, Head of Currency Strategy at Wells Fargo Bank. "Should the U.S. jobs report show a solid gain tomorrow the commodity and emerging currencies could rise further, though we are more cautious on prospects for the euro, yen and pound". Euro rises to 1.3100. Could it hold gains? After today's rally, EUR/USD technical indicators have turned positive in the short-term supporting a steeper correction. However, as hourlies reach overbought levels and ahead of the NFP report, the cross will likely see a period of consolidation before another leg higher. The EUR/USD would still need to regain the 1.3160 area (Feb 28 high) in order to challenge the broader bearish bias. On the downside, a break below 1.2965 (March 1 & 6 double bottom) would expose the 1.2900/08 zone (psychological level/ Fib 76.4% of 1.2660/1.3710). Commenting on today's EUR/USD advance, Christopher Vecchio, Currency Analyst at DailyFX says that the rally could be short-lived, especially if tomorrows US Nonfarm Payrolls report for February lives up to the hype (+170K expected). "The growing divergence between the Euro-zone and US economies will be too apparent to keep the EURUSD bid on President Draghi’s 'hopes' for an economic recovery, despite no new policies on either the fiscal or monetary side that would indicate otherwise", he comments. Meanwhile, on a wider view, TD Securities analysts note that if the market takes today's ECB tone too strongly, we could once again find ourselves in a replay of January-February, where Euribors and euro move so much that the ECB must then take another dovish tack to keep market expectations in check. "1.3150-1.3200 is a key risk area for EUR/USD as a push through there would likely bring more upside risk", TD team says.

EUR/JPY Buying Opp?

EUR/JPY is setting up for a large move higher... In this example of a trend chart, we can see an ascending triangle, which is likely to give a positive outcome if you were to go Long. A break above 12219, will give a break out trade and head for 12500 very quickly...if the USD/JPY decides to go UPWARDS, a break below 12090, will open up 11916. Lets see where this goes from here, but a great trading opportunity, either way!

Market Outlook and Comments

Technical Analysis EUR/USD EUR/USD rallies up to 1.3040 “The Italian situation won’t be resolved soon, so the euro malaise will continue. I think the ECB will consider rate cuts going forward. It’s unlikely there will be any euro-buying catalysts from the ECB meeting this week.” - Marito Ueda, FX Prime Corp. (based on Bloomberg) Pair’s Outlook EUR/USD has returned back to the down-trend at 1.3040 that now lies overhead, but the current bias is bearish, meaning we are more likely to see a sell-off here than a surge back above this line. However, development of a dip may not be rapid, since beneath the spot price lies the 200-day SMA at 1.2922/12, which usually is of interest to the market. Traders’ Sentiment Neutral traders’ sentiment towards EUR/USD is perfectly unchanged since yesterday, as 52% of traders are bullish on it and 48% foresee further depreciation of the single currency. The ratio of buy to sell orders is less stable, falling to 40% to 60% from 43% to 57%. GBP/USD GBP/USD pares losses “CAD, EUR, GBP, CHF and JPY are all held net short against the USD.” - ScotiaFX (based on CNBC) Pair’s Outlook Daily technical indicators turned bearish, implying that yesterday’s recovery does not mean a reversal, but is only a short-term bullish correction. Still, the rallies are to be capped by a strong resistance area at 1.5227/1.5175 and sent en route to 1.44890/44 through interim supports at 1.5080 and 1.4938. In the long run we may expect a decline down to 1.4231, the 33-month low. Traders’ Sentiment Popularity of the British Pound is plummeting, as less and less traders remain convinced that debasement of the currency will stop in the near future (53% on average in the whole market). The distribution between the longs and shorts on GBP/USD is 46% to 54% respectively. USD/JPY USD/JPY’s rally falters “We have promised to achieve 2 percent, making it clear in our joint statement to meet the target as early as possible. This is our pledge, so we'll do the utmost to achieve it.” - Hiroshi Nakaso, BOJ official (based on Reuters) Pair’s Outlook The currency pair again retreats, lacking upward momentum ahead of the key resistance zone that stretches from 95.00 down to 94.42 and is mainly formed by the up-trend resistance line. The present weakness could be stopped by 92.89/66, but a decline to 92.15/09 appears to be more likely, even though the weekly indicators continue giving ‘buy’ signals. Traders’ Sentiment An overwhelming majority of the SWFX marketplace participants (72%) believe the tendency of USD/JPY to rise is going to reveal itself once again, as they are holding long positions. The difference between the shares of buy (70%) and sell (30%) orders is unchanged. USD/CHF USD/CHF to extend surge “The central bank shouldn’t scale back its accommodative policy stance so as to support a stronger economic recovery and growth in employment.” - Janet Yellen, Federal Reserve Vice Chair (based on MarketWatch) Pair’s Outlook Yesterday the currency pair has confirmed a positive outlook by closing above the support at 0.9400/0.9387. This should now act as a springboard and push USD/CHF up to 0.9512, while the nearest resistances, specifically at 0.9450 and 0.9488, have a high chance of being neglected by the bulls. On the other hand, there is no consensus among the technical studies. Traders’ Sentiment Over the last 24 hours positioning of traders with respect to USD/CHF was not subject to drastic changes. The bulls stay in minority, constituting 38% of the market, whereas bears take up most of it—62%. Concerning orders, 71% of them are to buy the greenback against the Swiss Franc.

NZD/USD is ready

NZD/USD is ready to trade WHITE STAR CCI DIVERGENCE Ready Steady GO

A great start to March..

A great start to March with + 153 pips so far, with many charts now setting up for some BIG moves... AUD/CAD + 117 We sold this at 10551, you should have received a TEXT, currently + 117 ----------------------------------------------------------------------------------------------------------------------- EUR/AUD we have held for few weeks, very slow move but now in profit by 32 pips, we bought this at 12800....lots of patients needed here: ----------------------------------------------------------------------------------------------------------------------- GBP/CHF has been in a downtrend for some time, so this is a retracement + 4..not much happening here so far....

EUR/USD?

The Euro is trading timidly above the all important 1.30 contention area against the US Dollar, an occurrence that will likely keep volume activity in the pair at fairly high levels as the wrestling to determine the next direction continuess. As a reminder, the pair traded as cheap as 1.2966 last Friday, on notable USD-strength across the board. The sellers are the side playing with advantage for now, with the latest development in the Italian political landscape reassuring Euro skeptics that instability in the Euro-zone is here to stay for longer, a recipe for more hesitation to hold Euros. This weekend's main headlines in the Italian front suggest that center-left Bersani - his party obtained the most seats -, said he may plan to form a government on his own as alliance from the other main parties looks improbable. However, a government which wouldn't enjoy enough support from the Senate seems as a very inadequate option to implement fresh new changes. Another rumour doing the rounds was uncovered by The Telegraph's editor Ambrose Evans-Pritchard, noting that "Italy’s president Giorgio Napolitano is exploring the creation of a second technocrat government to break the political log-jam and calm markets after key parties failed to reach an accord, risking a serious popular backlash." Despite the Italian political odyssey, key element to understand the ongoing selling pressure in the EUR/USD, the Euro has been actually making some progress in the crosses. However, investors continue to pile in on the USD long trade, a phenomenon gaining momentum over the past few weeks, as "systemic risks" within the Euro-zone build again, says Kathy Lien, founder at BK Asset Management. As Kathy reports: "Eurozone economic data was actually quite good last Friday, with German retail sales jumping 3.1% in the month of January and Eurozone manufacturing PMI revised up slightly to 47.9 from 47.8. Unfortunately economic data matters little when systemic risk has returned." The fundamental commentator adds that last Friday's ECB's report that European banks only returned EUR12.5 billion in LTRO payments vs EUR67 billion the week before, in her words, was the main catalyst of the EUR/USD sell-off, "as lower LTRO repayments are negative for the euro because it reflects concerns about liquidity needs in banks" she said. From a technical perspective, according to Sean Lee, founder at FXWW: "The break back below 1.3000 is a bearish sign for EUR/USD and selling rallies looks like the most logical play." The Sydney-based analyst, however, notes that "this move seems to be based more on USD strength rather than EUR weakness, with the single currency making gains against all the other majors" he says. Marc Chandler, Global Head of Currency Strategy at BBH, also has $1.2880 as the main target for sellers, a significant level as it aligns with "the 50% retracement of the gains scored after ECB's Draghi promised to do whatever it took" Marc notes. Chris Capre, founder at 2ndSkies, notes: "The key role reversal level at 1.3150 held, so bulls will need to take this out to gain any traction. Bears meanwhile are gunning for 1.2965 which is the weekly low." Chris adds: "Considering the market every week for the last four weeks has had a minor pullback, I’ll look towards selling on a rally instead of taking a short on the break, so will watch the 1.3150 area for any price action signals." On the upside, as explained in a previous article, sequence of near-by resistances will most likely see mid to high selling interest around 1.3035/40 - highest from last NY close - ahead of 1.3050/55 - Feb 28 swing low , with only break above the latter accepting 1.31 target speculations as valid.

AUD/CHF

AUD/CHF, the trend is down yet we see the price moving UP, good news.... In the above chart, notice several thing, Blue Below Red= downtrend CCI overbought at and above 150.... Notice the previous high 9630 GREAT Risk to reward