Posts by "rezz"

87.30 level in AUDJPY being visited for fourth time in 11 days now... Break below can look ugly with stops getting triggered. Either AUDUSD will be dragged down or else USDJPY!!

Watching USDJPY 83.45 level. Would assume there is heavy long positioning by now (after all the talk of 86 target etc..), so a break and continuation down is bad for carry trade?

USD/CHF looking attractive at .8970

Predicting what the EUR will do from here is tricky. Read an article a few days ago on cnbc saying that additional windfall profits from oil sales is leading middle eastern fund managers to diversify and buy euros. Of course if i were them I would wait for a pull back at least for a bit before continuing to buy, but then who am i to argue lol... At the same time when everyone begins to talk about a target zone as being a new resistance zone in EUR (based on top rising channels), my initial experience in FX is assume the worst. I feel with so much liquidity due to us retail investors, the pros refrain from selling into what may be a generally perceived resistance area just because they feel the subsequent nervousness of retail (if it doesnt go in their direction quickly) will cause panic covering adding fuel to the fire. It seems FX is getting harder because the money printing in japan is adding extra punch (to the feds QE2) with people willing to take more carry trades with confidence. On the flip side it could all end badly for the long carry traders. In these times we can only wait for the market to show its hand with a good sell off and a partial retracement before new shorts can be taken at a good risk reward.

A related article today at DailyFX: "Oil, Gold and Silver to Fall if Risk Appetite Sours After ECB Rate Decision" http://bit.ly/hGqB7M
My own thinking is that an ECB rate hike will affect bond yields across the short and long ends of the yield curve, hence "cost of equity capital" rates go up which is negative for equity valuations. The Euro economy is over 15 trillion dollars so any slowdown in euro growth even by fractions of a % can affect commodity prices.