For more market information connect and follow us

Weekly FX Commentary Weekly FX Commentary

June 12th 2011 June 18th 2011

Twitter: ElitePipMaker Web: www.eliteglobaltrader.com

Authors: Anthony Rousseau & James Putra

FX Market Flash
Pair Assessment Comment

Event Risk
Monday: CNY: CPI 10pm Tuesday: GBP: CPI 4:30am USD: Core Retail Sales 8:30am USD: PPI 8:30 USD: Retail Sales 8:30am Wednesday: GBP: Claimant Count Change 4:30am USD: Core CPI 8:30am USD: TIC Long-Term Purchase 9am Thursday: GBP: Retail Sales 4:30am USD: Building Permits 8:30am USD: Philly Fed Manufacturing Index 10am JPY: Monetary Policy Meeting Min 7:50pm
Neutral

AUDUSD

AUDUSD Looking at the AUDUSD, RBA gave very little incite on any rise of rates, looking like 2012. With the USD gaining some strength we will most likely see this top at 1.0772 be the short-term top in place giving a clear direction of a bearish outlook to 1.0357 and 1.0202 over the next few weeks. May see some short-term congestion, but outlook and projections close to parity stands firm. Recommendation: Careful of congestion between 1.0500-1.0700. We may see some cycle plays with the focus on the bearish side, we are looking for targets of 1.0440,1.0350,1.0200 over the next few weeks, look for shorts after a rally up to resistance in the 1.0600 area.

Neutral

EURUSD makes a strong pullback last week after a strong move up from May low 1.3979 to 1.4706, looks like for the short term we have a lower top in place from this years high up at 1.4939, we are cautiously looking at short-side, we see possible consolidation at current levels while we get more data from Euro countries and the ECB, talks about another rate hike in July will hold this pair up. With USD strengthening we may see a move back down to the 1.4100 levels before the end of June. We are keeping a close eye on ECBs moves with more talks about rate hikes this pullback could be short EURUSD lived. Current strength is on the short-side. With the uncertainty with Greece and the aid package they will be receiving we see continued losses before another major move up to test highs. Recommendation: Look the week to start off with a rally up towards 1.4410-1.4470. Looks like we may get some cycling action with downward pressure, while we wait to see how Greece bailout unravels, continued downside pressure this week is expected. Targeting 1.4300-1.4250 this week after the rally. EURJPY is still in an ascending wedge pattern that started at Mays low of 113.39 and it has been toppling in 117.80 range. We see a possible test of 113.16 this week to come, if this 115.10 level holds we will see a play back up to the top of the channel 117.82 Recommendation: play the cycle trades up and down, use the support and resistance as targets. Keep an eye on when the USDJPY makes it's move up we may see all Yen pairs move together. 115.90 and 116.40 the 2 resistance levels that look to be hit towards the beginning of the week. GBPUSD We expect this pair to rally back up towards 1.6300-1.6350 before we see the continued downward push to 1.6150 range for the short term, which is a upward trend line that starts back in May 2010 and a break of that line we see a for sure target to 1.6050. We are looking at the BOE statement coming in a week to give reason for a break of the recent low in May at 1.6057. With the dollar starting to gain strength and QE2 ending we may see another test and a possible break of low down to 1.5885-1.5800. Recommendation: Look for a rally this week up to key resistance 1.6280-1.6300, then look for the next move down. We are still in a very uncertain range of the true direction we need a break below 1.6050 for trend to fully change to bearish. Keep an eye on Inflation data out of the UK and the employment figures. With a slowing UK economy we should see continued downward movement this week. Targeting 1.6150-1.6050 this week, wait for rally. GBPCHF is looking to have the same pattern as the USDCHF, with Swiss Franc selling look for a opportunity in this pair as well. I will look to take the same type of risk as with the USDCHF in terms of position size. Look for the GBPCHF to be trading upwards of 1.4064-1.4107 in the next 3 weeks. Recommendation: Watch for the USDCHF to start making it's move up, catch trend change on 240 or Daily and ride this up with caution, the weekly is very weak still, but the Daily and 240 can produce a nice move up to some resistance levels. USDJPY is creating a solid bottom in the 80.00 range, we see a move back up to 82.00 before the end of the month very likely. The BOJ will not stand for the Pair to be traded below 80.00 level, which makes most traders weary of shorts at current pricing. Recommendation: Stay away from shorts at this level, look for trend change bullish and move back up to 82.00-83.50

Neutral

EURJPY

Friday: USD: Preliminary UoM Consumer Sentiment 9:55am

GBPUSD

Neutral

GBPCHF

Bullish

USDJPY

Bullish

NZDUSD

NZDUSD: Pattern starting to form at highs, we are looking for a reversal play to the short side, looking for cycling from .8100-.8300 over the next week. Recommendation: Step aside wait for reversal pattern to form and look for move down.

Bearish

CRUDE Oil From the supply side, since OPEC didnt reach an agreement this might keep crude oil prices high and might even push them up. From the demand side, the recent economic indicators show that U.S, Japan and China arent advancing as they did earlier this year. This might ease the advances of crude oil prices. Therefore, in the short term, these forces that push crude oil prices in Crude Oil opposite directions may keep them at their current level of $100 per barrel for WTI and $117 for Brent oil. But the rising gap between Brent oil and WTI oil might indicate that the European oil market is further tightening and may even suffer more from the oil shortage from Libya than US oil market does.

Neutral

Gold

Gold - US economic data for May was disappointing, including a drop in manufacturing activity, causing sharp fall in stocks and increase in gold to $1,550. Signs of a strengthening US dollar may also apply pressure on gold. The short term outlook is for weakness with a positive bias in the medium term.

Neutral