Monday, October 31, 2011

The Advisor Weblog

The Advisor Weblog

Quite complicate week just starting

Posted: 31 Oct 2011 05:00 AM PDT

Hi everyone, and welcome back to a new week in this crazy forex market. BOJ intervention past Asian session is old news right now, yet still a hot topic: would a standalone intervention will be enough to keep weakening the yen? Check the "From the editors' desk in the Beginners corner: there is a full article that includes  FinMin Azumi statements,  saying that they intervened in FX market to take firm steps against speculative action, adding that they will continue to intervene until satisfied, and more interesting comments. Here is the link:

 

http://www.fxstreet.com/education/beginners-corner/

 

In the meantime, past  week COT report shows the USD/JPY is still white bearish, but of course, it does not includes this latest move. The rest of the crosses had turned pretty much neutral there, and I guess that ahead of the FED, the ECB and the US NFP, we are going to face a couple of choppy trading days, with loads of volatility included.

 

When it comes to the EUR/USD, the optimism seen past Thursday is quickly diluting; the daily chart is showing an increasing bearish potential after the pair found resistance in a Fibonacci level, while price now struggles with next one. A daily close fairly below 1.4000 could put the pressure back towards 1.3840/60 price zone for the upcoming sessions.

 

There are a lot of pending questions right now, of what we can expect from trend; besides yen intervention, Mario Draghi will preside his first ECB meeting, and set the path for upcoming ones. I do believe there are high chances of a rate cut there, that may put more pressure on the Euro. Bernanke in the US, will probably come with a dovish/pesimistic outlook that will only exacerbate risk aversion sentiment. Yet of course that's what I expect, not what will happen. The wait and see will be long these days.

Happy trading all!


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Posted by at 5:52 PM

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