General Notes:
Is it not strange that the big drop in the EURO today is when you have a bank holiday in Germany? In general, the markets are in a state of uncertainty. It is hard to stomach what happened last week, in the sense that you could invest wisely for a long time, and in one or two weeks lose it all, in the frenzy of the markets.
It is also disturbing to hear about the obvious lack of knowledge from the decision makers and their unwillingness to acknowledge the inherit problems of the system. Reforms and regulations are nice but is it really changing the landscape?
And is it doing so in the time span needed? It seems that the 2008 crisis did not change anything in the real world of derivatives and leverage.
AUD/USD Visual Trading Update
Price and Indicators Technical Overview:
Last time we said: "The break and test of the weekly rising trend line was really important here. The pair is down hard, even when it has one of the highest interest rates attached to it. It shows you that fundamentals are less important than the technical's and that in this case the liquidation of the pair have background reasons we cannot see in the media. We think it is attached to China. Oversold, but as we saw in the EURO, it can kill if you take a position for the rebound too soon." The pair is starting to stage a basing pattern, but there is time yet for the correction up.
EUR/USD Visual Trading Update
Price and Indicators Technical Overview:
Last time we said "The question now is if the pair will reach the lower boundary of the descending channel. Strong support says now, momentum says yes. We will see. Look at the general notes about our view here. OVERSOLD! But it can continue….And it did reach the boundary. Now what? Is it not enough or will the currency finds some footing here. We need to see more price action to decide." Short covering or not, it is still a fractured pair and we need to see some more upside action before we know that the trend has changed.
USD/JPY Visual Trading Update
Price and Indicators Technical Overview:
Last time we said: "You can see the exact correlation between the stock (risk) markets and this pair. It is the "funding" carry trade game that is moving the pair these days and the technical's are quite bad. In principle, we should see a test of the lows at least. Maybe a double bottom was found here?" 88-95 is the very big trading range here. Look for the 4H chart to make some higher or lower highs and lows before deciding.
Charts Legend:
3 Price Windows: Main (Daily), Right Side (Up: 4 Hours, Down: Weekly)
INDICATORS:
Simple Moving Average (20): Green
Average of Average (9 weighted): Violet
Price Channel (20): Orange
Volume: Black
Daily separations: Black Dots
Support & Resistance price areas: Light Blue Areas
Trend lines and Channel Boundaries: Blue
Elliott Waves Counts: Black and Blue numbers
RSI (10): Blue, ADX(20): Blue
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