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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 903
Posted: Feb 22, 2010 5:00
Comments: 903
Forum Topic:
CHF
Discuss CHF
The pre-planned short positions from key resistance range levels have been implemented with attainment of basic anticipated targets. OsMA trend indicator, having marked this week`s low by formation of reversal bullish signal with further rise in buying activity, suggests preference of planning buying positions for today. At this point, considering descending direction of indicator chart, we can assume probability of rate return to close 1,2280/1,2300 supports, where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term buying positions, on condition of the formation of topping signals the targets will be 1,2340/60, 1,2400/20 and (or) further break-out variant up to 1,2460/80, 1,2520/40. The alternative for sales will be below 1,2200 with the targets of 1,2140/60, 1,2080/1,2100.
JPY
The pre-planned break-out variant for sales has been implemented with attainment of minimal anticipated target. OsMA trend indicator, having marked break of key supports by formation of reversal bullish signal, in the bigger picture, considering no clear level of bullish counteraction, suggests preference of sales in planning trading operations for today. Therefore, at this point, considering direction of indicator chart, we can assume probability of rate return to close 90,00/10 resistance levels, where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term sales, on condition of the formation of topping signals the targets will be 89,60/70 and (or) further break-out variant up to 89,20/30, 88,60/80, 88,00/20. The alternative for buyers will be above 90,40 with the targets of 90,70/80, 91,10/20.
GBP
The pre-planned break-out variant for buyers has been implemented with attainment of minimal anticipated target. OsMA trend indicator, having marked break of key resistance levels by sign of rate overbought, nevertheless, did not reveal any strong level of bearish counteraction, which favors preference of bullish direction in planning trading operations for today. Therefore, at this point, considering descending direction of indicator chart, we can assume probability of rate return to close 1,4920/40 supports, where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for buying positions, on condition of the formation of topping signals the targets will be 1,4980/1,5000, 1,5040/60 and (or) further break-out variant up to 1,5100/20, 1,5160/80, 1,5240/60. The alternative for sales will be below 1,4860 with the targets of 1,4800/20, 1,4740/60, 1,4680/1,4700.
CHF
The earlier opened long positions had a positive result in attainment of minimal anticipated target. OsMA trend indicator, having marked preserved low activity of both parties, as earlier, does not clarify the choice of planning priorities for today. Therefore, considering current ascending direction of indicator chart, we can assume probability of another rate return to 1,1100/20 support levels, where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term sales, on condition of the formation of topping signals the targets will be 1,1040/60, 1,0980/1,1000 and (or) further break-out variant up to 1,0920/40, 1,0860/80. The alternative for buyers will be above 1,1180 with the targets of 1,1220/40, 1,1280/1,1300.
The strong rally from 1.04 to 1.17 has enabled the long term moving averages to turn positive and the odds favour buying dips towards the 61.8% retracement at 1.0930 which is also where the 100-day MA is. A test of this level still looks possible with the short term trend still bearish and having difficulty breaking back above 1.1160.
Dependent On Risk Sentiment; 90.00/91.70 Short Term Range
Any decent sized rallies in USD/JPY seem to be met with waves of selling from Japanese corporates and this is putting a serious cap in place. On the other hand, the market had gotten itself quite short in the JPY crosses and short-covering there has provided the bid tone for USD/JPY. This all means that USD/JPY is tied into fairly tight ranges with short-term parameters at 90.00/91.80 for now, once break out occur pace will takeover.
Risk Sentiment Still Fragile
The bullish sentiment which was emerging yesterday in the wake of the Chinese moves on the Yuan seems to have retreated somewhat. The EUR is lower across the board despite no major bad news emerging; EUR/CHF continues to make new lows, EUR/JPY has given back all of the strong gains made in early Europe plus some, and the EUR/USD is very much back in mid-range territory. The AUD has managed to maintain some of its gains but if risk aversion returns then it will also be pressured. Good luck today. Still looking out for recommendations and signs :)
There few more progress in commodities which we are deciding to sell actively there no clear signals in the market which is a healthy sign for a quick consolidation, We held our copper from 283, 286, 289 and profited at 304, since 304 I am selling again, collecting 298 on the way expected to come out at 288. Gold we still hold long and will not change for a while. While silver is my preferred short.
YOU HAD AN EXCELLENT VIEW ON USDCHF
Dima
Ashraf
Confidence has plummeted to extreme lows and it will be several months before appetite for risk trades returns. The AUD and NZD as well as many Asian currencies will struggle over the interim period before their appreciation trend finally resumes.
In contrast to the weakening of risk currencies, CHF strength is showing little sign of letting up. Switzerland recorded a massive 50% jump in FX reserves in May to CHF 232 billion from CHF 153 billion in April. This is not usually market moving data but the scale of the jump in reserves is huge and it is not just due to valuation changes. The Swiss National Bank (SNBs) effective abandonment of defending a particular level in EUR/CHF turned into more a smoothing operation but this did not stop the bank from massive FX interventions. Despite the interventions EUR/CHF dropped by 0.8% over the month.
Aside from alleviating upward pressure on the CHF the interventions had an indirect effect of reducing the pain of holders of CHF mortgages. E.g. around 30% of Hungarys bank loans and 60% of mortgages are denominated in CHF but countries across Europe have plenty of CHF denominated loans, especially Austria. Although Hungary announced steps to meet its deficit targets its woes are far from over.
The CHF has appreciated by around 3% since the beginning of May versus HUF, exacerbating the pain for CHF borrowers in the country. The fact that CHF strength shows no sign of letting up on the back of strong data and safe haven flows, the pain for these borrowers will only add to the problems for banks and borrowers alike in Europe.