General Notes:
There is one thing that you should always remember: You will see the change in the markets way before CNBC or Bloomberg will tell you why it is happening. Positioning or deleveraging are functions that starts or stops without the big lights.
The EURO went from 1.51 to 1.40 before we heard Greece mentioned and the megaphone top in the equities of April started to form while the US was in a state of euphoria about the "recovery".
That is why we believe in technical analysis for timing with a god dosage of fundamentals to understand the pitfalls a bit before they happen. Sovereign debt?! Is there a problem that was more obvious than this one since 2000 or even 2007?
But, Dubai, Greece, etc… came to be urgent problems just lately. Why? We don't know (actually, we think it is because of the CDS raiders) but the EURO was a tell tell for a while before it erupted.
AUD/USD Visual Trading Update
Price and Indicators Technical Overview:
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:
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? We look at the ADX for the main guidance here because the extremes in it (and the reversal) is showing that the pair could have reached the highest conviction level for shorting. A move up (conviction for the other side) could take a while…
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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