Few interesting charts...

EURUSD is in a nice downtrending channel with appropriately stacked 10, 20 and 30h ema. It has been forming lower lows and lower highs for about a week now. Situation is very similar when looking at USDCHF. USD strength has been exhibited in form of higher sloping moving averages and up channel. Further USD strength is expected, keep buying USD on pullbacks.

USDJPY has been in a strong downtrend for quite some time now. Area 90.35 - 90.50 is a resistance formed by 50% retracement from 92.52 to 88.22 and by a downward sloping trendline. Buy JPY on pullbacks to 90.40

USD continues to strengthen. Reversal is here...

USD continues to get stronger across the board. Oil dropping like a stone (currently 65.90) has big implications for the USD (and specifically against the CAD). It's likely that USD has formed a bottom and we'll get the much needed retracement.

US equities are in red (S&P down 1.18%) and there is plenty of room to the downside.

Chart shows a great confluence of events: EURUSD broke below 10 ema, previous candle was also red, MACD formed a bearish cross and Stochastics fell below 80. Keep shorting the Euro. It wants to go down now.

This is probably it. Get ready for USD bounce

USD retraced all of the losses it incurred during the London session following weaker German Ifo 91.3 vs exp. 92.1 and especially after weaker US existing home sales 5.10M vs. exp. 5.36M. GBPUSD melted down from 6385 to 6067(!). USDCAD jumped from 0707 to 0890 as wti crude is hammered to 66.40 and AUDUSD dropped from 8770 to 8667 as XAUUSD dropped from 1019 to 993. USD index jumped from 76.10 to 76.79. Strength in the buck is reflected in the S&P which is currently in the red by about 0.9%. Unless the buck retraces these gains, which looks unlikely at this point as there are no more news releases, daily charts will show a very toppish formations.

Further USD strength is likely as dollar negative momentum is exhausted and traders have started to close the USD shorts to realize profits especially because of the G20 meeting. Buy USD on pullbacks to 10-20 hour ema.

EURGBP short from yesterday currently up about 45 pips

Short EURGBP against 91.00

Nobody likes the USD... The buck was sold across the board today and reversed all of its previous gains sending USD index from highs of 77 to below 76. Dollar selling momentum is too strong. The greenback is weak again. However, when the USD strength comes, it will come and take everyone by surprise (maybe tomorrow FOMC statement?). I do not feel comfortable selling USD at these levels so lets look at some cross action.

EURGBP formed a very nice bearish candle formation that gives us great short opportunity. Recent rally stopped right at the 61.8% retracement from March high of 9492 to May low of 8399. Multiple bullish days were followed by a clear signs of bullish move exhaustion: doji followed by an inverted hammer and yesterday a bearish candle. Go short at current levels (0.9042) with a stop above 91. First target is a trendline resistance turned support around 8950. At this level close 1/2 and trail rest with 40 pip trailing stop.

GBPUSD formed a long bullish candle after a hammer pointing to additional strength. GBPUSD move up would help to push EURGBP down.

Interesting week ahead, USD stronger as expected.

USD is stronger across the board at the beginning of what is likely to be an interesting week. FOMC meeting, G20 meeting, German IFO and other events and news releases promise exciting and volatile week. As noted last week, USD index likely formed a bottom at around 76.20 and bounced nicely to 77 level. Trendline resistance comes above 78 so there is plenty of space for additional follow through. Supporting the USD strength is oil below 70 and gold breaking 1000 once again. US equities are currently down about 0.4%.

Looking at charts, 10, 20 and 30h emas are nicely stacked in correct order pointing to additional USD strength. Buying USD on pullbacks seems viable for the next couple of days. For today the move is likely to be exhausted so wait for a test of 10h ema, stop above/below 20 ema (or alternatively use trendlines to initiate trades).

Turn may be coming tomorrow, multiple dojis and hammers

Turn in many markets can be finally upon us... it is about time. After two weeks of relentless USD selling, the charts started to show signs of possible reversals. Dojis and hammers were formed on many currency pairs and gold even posted lower close compared to open. Obviously depending on your broker your chart may look slightly differently (some consider the end of the day 5pm NY time, some midnight London time and some even midnight NY time.

Many traders use trading strategies in which they open long positions after 7-9 bearish daily candles (or short position after 7-9 bullish candles). Regardless of what the number of days is, US dollar index formed bearish candles over the past 10 days. Bounce is due and return to 77.50 - 78 area is very likely. It's just question of time.

Friday will bring a triple witching hour (simultaneous expiration of equity index futures; equity index options and equity options) so we can expect high volatility. This volatility will probably bring the recent rally to a stop.

Trading plan: bet that markets will turn around with stop above swing high.

EURUSD breaks 12/18/2008 highs

No stopping for EURUSD. The european currency breached another major resistance level at 1.4718 from 12/18/2008 and reached a high of 1.4733 after another round of USD selling. USD index broke below the 76.50 and reached a low of 76.15. Increasing price of gold and oil contributed to USD weakness.

As mentioned yesterday, GBPUSD continues to bump up against a resistance at 6490 which propped EURGBP up to 8926 a level not seen since beginning of May.

On fundamental front: US headline CPI surprised to the upside coming at 0.4% exp. 0.3% while core came as expected at 0.1%. However, TIC data came much lower than expected (15.3B vs. exp. 65.3B, 90.2B last) showing slowing foreign demand for US assets.

EURUSD will correct, it is just a question of time. Considering recent run-up, the correction is not too far. However, no sense trying to pick a top. The trend is up as long as 4630 does not give way. So continue buying EURUSD on pullbacks. Be aggressive with taking profits though.

GBP hit after BoE remarks

GBP is sold across the board after BoE remarks that reducing interest rates on reserves is being considered. GBPUSD is down from 1.6661 to 1.6413, EURGBP is up from 8771 to 8895. On the news front: GBP CPI was higher than expected (1.6% yoy vs. 1.4%). German ZEW disappointed at 87.7 vs. exp. 59.9. US retail sales and PPI came up better than expected at 1.1% vs 0.4% core and 1.7% vs. exp 0.9%.

USDCAD turned around little earlier than expected and reached only 0871 before dropping 100 points. EURCAD behaved more predictably. As assumed yesterday, it reached a high of 5880 before dropping to 5740!!! That's the power of trendlines on the daily chart.

Given the significant move in GBPUSD and the underlying reason for the move the trading plan will be to sell GBPUSD on strength. Selling a test of 10 hour ema (currently at 6490) with a stop above 20 h ema advised.

Canadian dollar approaching a major resistance

Canadian dollar is approaching a major resistance against the buck and the euro. Trendline on the daily is coming at around 1.5915 in EURCAD and 1.0970 in USDCAD. In calm technically driven trading these trendlines will probably keep prices under pressure. However, if oil plummets (head and shoulders formation is being formed) that could give the CAN$ reason to weaken rather substantially. As long as oil trades above 67, sell the CAD crosses. If oil drops below 67 CAD crosses are likely to shoot higher. Tomorrow is turn around Tuesday so large moves are likely.

USD index forming a bottom

USD index is probably forming a bottom. On 8 hour chart, MACD just made a bullish crossover and at the same time the index broke a 10 EMA to the upside. Turn around Tuesday may be coming!

I like USDCHF to the upside. As mentioned earlier, USD weakness has been overextended and it is time for a pullback. Even daily oscillators started to show loss of momentum. EURCHF is currently around 1.5128 which is pretty close to the line in sand that SNB is watching. This should prevent further CHF strength. Time for an intervention?

USD continues to be sold in the ongoing session.

USD continues to suffer during the ongoing session. EURUSD reached a higher high at 1.4653, USDCHF reached a lower low at 1.0327. However, against the kiwi USD is stronger after yesterday's retail sales disappointed (-0.5% vs exp. +0.6%). Despite the present USD weakness, the move has been extended and reached what I consider unsustainable levels. Pullback (USD strength) is expected. Against the EUR I expect to see levels around 1.42 and against the kiwi, where strength is already showing, to levels around 0.6770. Oil below 69 should help to push CAD lower against the buck. USDCAD seems to have formed a bottom and bias shifted to the upside - buy on pullbacks. US equities are already in the red and I expect to see further weakness after Obama speech.

Good trades.

GBP breaking to the upside after no change in QE

GBPUSD broke up and reached 1.6675 after BoE announced no change is Asset Purchase Facility. As expected, there was no change in official bank rate currently at 0.50%. EURGBP sold down from 8827 to 8731 and formed a nice bearish engulfing pattern on the daily chart. Further downside probable.

In the US unemployment claims were better than expected coming at 550k vs. 560k expected. US trade deficit widened to 32B vs exp. 27.1B. In Canada rates were left as expected at 0.25% and CAN trade balance came at -1.4B vs. exp. -0.1B. USDCAD strengthened from 1.0880 to 1.0795.

Gold broke back below 1000 and dipped to 984. Gold started to form lower lows and lower highs on the hourly chart and faces trendline resistance at 995. EUR was able to make a new high against the buck reaching 4607 before breaking down 100 points. If we fail to close above 4575 nice doji will be formed on the daily chart pointing to stalling up momentum. Light shorts with a stop above swing high advised.

Good trades

EURUSD weekly chart - BB resistance and 61.8% resistance

EURUSD may stall its uptrend as there are two very important resistance levels on the weekly chart. (current price 1.4562) First, we have a bollinger band (settings: 20, 2) resistance around 1.4625 area and at the same area we have 61.8% retracement of the fall from 1.6035 to 1.2329. These two areas may provide a strong resistance that could be exploited on the short side. Relatively large stop and limit advisable.

Good trades.

Another round of USD weakness

As expected, USD continues it's move down. As mentioned yesterday, until this trend ends, continue to sell USD on strength (test of 10 or 20 ema). The aussie continues its ascend, reaching 86.68 despite yesterday's fundamentally weak retail sales (-1% vs. +0.6% exp.) and home loans numbers (-2% vs -1.5% exp). USDCAD may be forming a bottom as it failed to create a new low despite better than expected housing numbers (150k vs 138k). Relative strength winner is the JPY which sent all JPY crosses way down. USDJPY tested a July's low at 91.73 and USDCHF is testing lows from December 08. Gold failed to make a new high as well which suggests consolidation of large gains seen over the past 10 days.

USD sold across the board, key levels breached

Last week when gold broke the triangle on a daily chart to the upside I asked what leads and what follows. It is clear now... Gold regained 1000 level, oil is above 70 and international equities are all in black. As a consequence USD has been sold relentlessly across the board. Largest moves seen over the past 24 hours in EUR (+1.22%) and CHF (USDCHF -1.39%). USDCAD continues its downmove it started on Friday after employment report surprised to the upside 27.1k vs -12.4k.

Considering the magnitude of the move additional follow through is likely. 10, 20 and 30 EMAs are stacked in correct order pointing to further USD selling. Trading strategy should be based on selling USD on strength. However, for today the move is likely to be exhausted, plus EUR is facing a trendline resistance on a daily chart. Selling EUR now against the swing high makes sense. Limits at 1.4460

Good Trades.

Gold continues ascend and breaks out from a triangle formation

Who's buying all that gold? Gold broke to the upside from the triangle mentioned yesterday. That alone should have sent USD down but it did not... USD was sold off in the morning but it regained a portion of the loss. Euro did not follow gold's example and failed to break it's triangle. Clearly NY session has a long way to go but if EURUSD fails to close above 4300 (currently 4260) then the candle formation will look very bearish again.

Unemployment claims were slightly disappointing coming at 570k vs exp. 563k. ISM came out in line with expectations at 48.4 still pointing to contraction. Oil dipped below 68/b while US equities are currently up about 0.2%.

Today's play is short USDJPY around 92.65-75 area (currently 92.55) below trendline resistance. Downward sloping EMAs pointing to further weakness and Williams %R rolled off overbought area pointing to lower prices ahead. Target is mid July lows at 91.75.

Good trades.

USD retraces portion of yesterday's gain

USD is down slightly compared to yesterday close. Market dynamics are very interesting now with USD down, equities down, oil down and gold UP hugely from 953 to 975. Question is what is leading and what is lagging...

Fundamentals today were not so good: ADP -298k, worse than expected -250k (but less negative than last time -360k) and factory orders disappointing as well (1.3% vs exp. 2.3%).

Against all majors the greenback created bearish engulfing candle yesterday and now it is retracing part of yesterday's gain. Considering the significance in the candle formation, I'm sticking to yesterday's call and buying USD on pullbacks.

The only exception is NZDUSD that is refusing to participate in the USD selloff and drops further making it the relative strength loser. Such weakness points to significant selling pressure that is likely not going to stop. Selling NZD on strength is recommended.

USD closing strong, equities and commodities weak. Additional momentum likely

USD closed the day very strong across the board. USD index held the 78 - 77.80 level, bounced nicely and almost touched the 79 level. Majors are closing very weak against the USD and additional follow through is likely. Liquidity may not be yet great but end of summer might bring more players into the game. Hopefully we will break out of summer ranges and get some decent momentum.

10, 20, 30 emas are nicely stacked pointing to additional USD strength. Buy USD on pullback to 10 ema or place USD buy stop orders above swing high/below swing low. GBPJPY looks just awful and we can pray for a test of 151.30-50 area to get short.

Huge triangles on EURUSD and gold. Breakout likely to happen soon.

Changing dynamics in the market that were mentioned yesterday are exhibiting today again. ISM manufacturing (above 50 finally...) and pending home sales both significantly higher than expected and yet USD is higher across the board. US equities took a 1.5% dive and commodities look pretty weak as well (oil below 69 and gold below 950). Risk appetite and USD weakness that we used to see as a consequence of a positive news releases have disappeared.

Looking at the charts I see two huge triangles on EURUSD and XAUUSD. The breakout looks to be imminent and while no one knows which way they will break, when they break it will be a large move. Global equities, especially Chinese, don't look too good, break lower in oil would send USD higher. EURUSD daily looks to be in a topping formation so if I had to choose... I'd buy USD.

Good trades.