General Notes:
Larry summers said that the European problems can affect the global and the US economy. Well, it was a new piece of information that we could not live without! The contagion is spreading not only inside the developed world, but also in the developing world.
No global economy recovery means no more need for natural resources and cheap labor. China, Brazil and even Russia could and will feel the effects of this new ugly wave of uncertainty.
Can somebody do something? We would like to think so, but it is not a US centric problem and therefore it will be more difficult to find the saviors. Europe was once described as the "old" continent with distain, but now, the current crisis shows you that even old entities can bite quite hard.
Instead of the EURO we are looking more at the LIBOR and the TEAD spread again. Remember 2008-2009.
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. Maybe a double bottom?
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. Maybe double bottom here also?
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
Green Wave Capital LTD (c) INFO@GreenWaveCap.com
