Wednesday, October 31, 2007

Rate Cut In Sight?

All eyes will be on the US FOMC today as they release their decision on interest rates today. Many are expecting a quarter point cut.The US economy has been hammered by a credit crunch, turmoil in the housing market and rising crude oil prices. The economic slowdown seems ripe for a rate cut. Add to that the increase in the Eurozone inflation rate and you have the makings for a volatile day in the EUR/USD currency market. We still expect the EUR/USD spot to gain strength and a test of 1.4535 should be next.

Monday, October 29, 2007

Calm Before The Storm

After making new highs against the US dollar overnight, the Euro appears to be consolidating in preparation for an eventful week. The EUR/USD currency pair continues to show strength ahead of Wednesday’s anticipated rate cut my the Fed. Wednesday also brings US GDP numbers, and Friday spotlights the US non farm payroll numbers. with indicators pointing north, we will look to use dips as buying opportunities. Minor support is at 1.4350. Given the slowing US economy and rising crude oil prices, we expect to be long north of the figure.

Thursday, October 25, 2007

Choppy Market Continues

The market has been a bit wild this week making it difficult to trade. That may continue today. The overnight surge in the EUR/USD currency pair brings it ever closer to a major resistance at 1.4340. A break of that level will have the bulls running for 1.5000. But given an excuse, the market may continue its consolidation. An anticipated rebound in US durable goods order could be that excuse. The US releases the durable goods numbers and the new jobless claims at 12:30 GMT.

Tuesday, October 23, 2007

Market Jitters Over?

As relative calm returns to the US equity markets we will once again try to find another trend in the EUR/USD currency pair. Credit worries hammered the equity markets last week. After hitting new highs against the US dollar, then retracing, the Euro is now consolidating at short term resistance of 1.4210. Although our indicators are neutral, we will watch for further declines from this level if resistance holds.

Friday, October 12, 2007

US Dollar Stablizies

The EUR/USD currency pair stalled short of our target yesterday as it rallied to 1.4240. We expect further consolidation this morning ahead of the US PPI and retail sales data to be released at 12:30 GMT. The consensus is looking for a rebound in retail sales which could bolster the US dollar even further.Our indicators are currently neutral with a slight negative bias. We’ll wait for the data release to look for trading opportunities. And the US retail sales data are one of the best times to use the strategy found in the Institutional FOREX System.

Thursday, October 11, 2007

Euro Gains Strength

Following good economic news and statements from the ECB, the Euro has rallied overnight. Another push at 1.4281 seems to be in play for the EUR/USD currency pair. Current indicators are positive, but overbought. We look for some consolidation below 1.4210 before resuming its climb. Next target is at 1.4253.

Wednesday, October 10, 2007

Fed Minutes Leave Traders Divided

Although the Fed feels confident that inflation is under control, most economists still expect another rate cut before year’s end. The only question seems to be on of timing. The consensus is divided between October and December. This has bolstered the Euro and the EUR/USD currency pair is moving higher. For a long trade watch for a sustained break of resistance at 1.4148. A retest of the recent high of 1.4281 may be in play.

Tuesday, October 09, 2007

Euro Trends Lower

The EUR/USD currency pair has been somewhat lackluster yesterday due to the US holiday. The pair drifted lower throughout the New York and Asian session. Minutes of the last Fed meeting are due at 18:00 GMT and traders will look closely at the discussion that resulted in the Fed’s recent rate cut. Many feel that last week’s employment numbers changed the landscape enough to push back additional rate cut for now. As this will bolster the US dollar we look to short the Euro today. Our indicators are in negative territory and we will look for support around 1.3935.

Monday, October 08, 2007

Quiet Session Ahead

We don’t expect much action today as financial markets in the US are closed for the Columbus Day holiday. That should be a relief to those traders who were caught in the buzzsaw on Friday. The US non-farm jobs report gave a boost to the US dollar with its better than expected numbers. But that was short lived as the EUR/USD currency pair sold off during the day to wipe out any gains. We are looking for the pair to consolidate during the New York session. Indicators are pointing south so we’ll look to go short on the next move.

Friday, October 05, 2007

Event Risk - Chapter Two

All eyes will be focused on the US non-farm payroll numbers today. The consensus is for a nice rebound from the August contraction. In any event, look for considerable volatility in the market when the data are released. Anything but a positive surprise still has the possibility of plunging the US dollar lower. The US is clearly in an economic slowdown, the housing market is in dire straits, and a cut in interest rates by the Fed is but a foregone conclusion. Numbers that are in line with estimates could still see a major spike in the EUR/USD currency pair. We see pair currently close to Fin resistance at 1.4130. We will look to play the news to the downside, or not at all. In our view, the odds favor additional consolidation, at best.

Thursday, October 04, 2007

Event Risk - Chapter One

With the EUR/USD pair breaking support yesterday, shorts were in play. And with plenty of event risk ahead, caution is the word of the day. Today it’s the rate decisions by both the ECB and the BoE, and US initial jobless claims. Tomorrow brings the US non-farm payroll numbers. All eyes will be on Trichet and the ECB. While the consensus is for the rate to remain unchanged, recent talk concerning the strength of the Euro may have some traders jittery. Our indicators are currently neutral but we will take our lead from the ECB decision.

Wednesday, October 03, 2007

More Of The Same

The EUR/USD currency pair continues to consolidate in a week where US non-farm data will be released on Friday. ADP employment numbers will be released today at 14:30 GMT. Historically most traders have paid little attention to this data, but over the past few months it has been an accurate precursor to the non-farm report. Some traders may try to position themselves today based on that report. As the US dollar weakness continues we will look to be long on the Euro. Our first resistance should be ahead of 1.4200.

Monday, October 01, 2007

Monday Data

Then EUR/USD currency pair is currently consolidating recent activity. The US dollar posted another record low against the Euro during the London session today. Traders are now anxiously awaiting US ISM manufacturing data to be released at 14:00 GMT. This could set the tone for the week. The consensus forecast is for an unchanged number from last month. We expect to see a much more volatile reaction to a number worse than expected than one better than expected. A decline will be the third straight month of negative growth. And that, coupled with an anticipated US Fed funds rate cut, could do considerable damage to the US dollar. Otherwise we will expect to next see action when the US non farm payroll numbers are released on Friday. Again we will look to make our hedge play using the Institutional FOREX System.