Wednesday, December 27, 2006

Test Of Support

After failing to break through the close of last week, the EUR/USD pair is now looking for support. Our target is 1.3130. A breach of that level would signal another leg in this correction. Watch for movement from the US new home sales due at 15:00 GMT.

Tuesday, December 26, 2006

Holiday Tempered Action Continues

The FOREX markets continue to meander as holiday hours continue to be observed. Closed are the UK, Swiss, Australia, New Zealand, Germany and Canada markets. We don't expect to see much action today.

Friday, December 22, 2006

Getting Ready For Christmas

The last trading day before the Christmas holiday has the EUR/USD pair taking another run at resistance. Overnight action saw the pair make a steady climb. We were able to scalp the market for a few pips yesterday but will once again watch for a break above resistance around 1.3215. Another failure should see a retreat to the 1.3030 level.

Thursday, December 21, 2006

More Data To Move The Market

Traders will be watching the US final GDP numbers today.  Most traders look at the bounce from the 1.3160 support area as positive for the EUR/USD pair. This tells us that the uptrend is still intact. Yesterday's correction kept us out of the market, but we will try to scalp at the release of data at 13:30 GMT.

Wednesday, December 20, 2006

Looking For More Gains

After digesting yesterday's US data, the EUR/USD pair staged a nice rally.Once again we were able to book a profit. The market has paused to consolidate during the London session and appears ready to continue upward during the New York session. With no event risk, we will be looking at technicals only today.  Longs will be in play above 1.3230. 

Tuesday, December 19, 2006

Data Continues To Move The Market

Yesterday it was the US current account figures which surprised the market. We were able to book a nice profit. Today we have US PPI, building permits and housing starts. As the EUR/USD pair appears to be trying to resume its uptrend, we think it will look for any excuse to test support before the next move up. We will remain cautiously optimistic and enter long above 1.3175.

Monday, December 18, 2006

Calm After The Storm

We will look to catch our breath today after Friday's wild swing. Between the US CPI data and the US TIC data, we saw a 128 pip swing in the EUR/USD.  That's the situation we hope for when trading with the Institutional System. Action in the London session has been very choppy, but we see a large descending triangle froming. Current momemten is neutral but we will watch for a breakdown out of the triangle. The EUR/USD pair is much closer to that instead of resuming an uptrend. Our trigger is set at 1.3077.

Friday, December 15, 2006

Another Step Lower

The EUR/USD pair was hampered yesterday by the better than expected US initial claims data. Any attempt at a rally during the Tokyo session has been met with renewed selling. We don't see the Euro going much lower from here. We see medium term support at 1.3084.

Thursday, December 14, 2006

At Support

Yesterday's better than expected US retail sales numbers gave the US dollar a quick shot in the arm. But this only succeeded in taking the EUR/USD pair to our support level. Since the Euro has been range bound recently, we will wait for a clear signal before committing too heavily to the market.  As always, we'll look for scalping opportunities as they present themselves. Current bias is down, but we will try to catch a few pips if the market breaks above 1.3215.

Wednesday, December 13, 2006

More Volatility

The EUR/USD pair stopped short of our trigger yesterday bur did give us some scalping opportunities. The market is now consolidating ahead of US retail sales data. Any weakness or surprise in this number should bring a test of yesterday's high of 1.3292, which is now resistance.

Tuesday, December 12, 2006

"Substantial Cooling" Noted In Housing Market

As expected, the FOMC left Fed funds target rate unchanged at 5.25%. While noting a continued concern with inflation, they expect it to moderate over time. After digesting the FOMC statement, we see strong gains in the EUR/USD pair. The rally continues.

Continued Weakness In The USD

We were able to catch a small profit yesterday as the Euro pushed ahead. The move was fueled by statements from former Fed Chairman Alan Greenspan who confirmed the weakness in the US dollar. The word that some European and Asian principals have reduced their holdings of US dollars. As for today, all eyes will be on the announcement from the FOMC regarding interest rates. Although the consensus is for no change in rates, the language of the statement seems to always have an impact on the market. We currently see the EUR/USD pair leaning toward the bearish side, but most traders are still looking for the rally to resume. We will too, and watch for another break above resistance at 1.3296.

Monday, December 11, 2006

Looking For New Direction

The US dollar showed a bit of strength at the end of last week. That strength continued into this morning's Tokyo session. We see a retracement at the start of the London session, but not much momentum associated with it. The general consensus of technicians is for further strength in the Euro with a target of 1.3500 by year's end. We will be cautious today looking to trade into market strength. Our indicators are currently neutral. We'll watch for a break above 1.3220 for a long on the EUR/USD pair.

Tuesday, December 05, 2006

A Market On Hold

Yesterday's choppy market gave us very little with which to work. It appears that the EUR/USD pair is consolidating ahead of 1.3240 in anticipation of its next move. Daily studies are bullish, but overbought. Many technicians are looking for 1.3500 on the pair by year end.

The market is also looking to major economic data being released this week. Last week's US ISM manufacturing number fueled the rally in the Euro. Since the US economy is largely service-based, look for today's ISM non-manufacturing number to move the market as well. Thursday will bring the ECB rate decision and Friday has the US NFP numbers. Each of the events are expect to move the market. Volatility has increased considerably in anticipation.

We will still look to ride the next wave higher as long as the weakness in the dollar continues. We'll keep an eye on our resistance level at 1.3375 as a setup. A break of support at 1.3240 changes everything.

Monday, December 04, 2006

More Weakness For The USD?

While the EUR/USD pair has contracted to 1.3280 following the recent rally, we expect more upward momentum. Expect a test of 1.3380 following a breach of 1.3315.

Friday, December 01, 2006

A Good Week

It was really nice to ride the rally in the Euro yesterday.  We were able to post another daily profit as the EUR/USD pushed to 1.3273.  The pair challenged at the London open, but quickly consolidated to support at the 1.3220 area.  Most technicians see further strength in the Euro as the whispers about a recession in the US are becoming louder.

US ISM manufacturing data comes this morning.  The consensus is for a modest gain m-o-m.  The reading for last month was the lowest since June, 2003. My guess is that it will take more than a modest increase to pull the USD out of its doldrums.  Watch for this number to move the market. A negative surprise is not out of the question.