Moneycat's Trading Blog

Euro Dollar technical analysis remark

moneycat — Tue, 31 Jul 2007 14:05:31 +0000

Just a technichal note: see how the faster MA is now acting as resistance.

UBS analyst sees outperforming USD ahead

moneycat — Sat, 28 Jul 2007 05:00:57 +0000

Mansoor Mohi-uddin, chief foreign exchange strategist at UBS, said while the sudden sell-offs in asset markets, carry trades and emerging market currencies were helping the yen and the Swiss franc to regain lost ground, investors should be aware that the dollar would benefit from safe haven seeking flows as well.

He said since global equity markets started rallying in 2003, the dollar had weakened as US investors bought foreign equities, emerging market currencies and commodities. “Increased risk aversion now will halt such flows while encouraging US investors to repatriate funds to cover losses in domestic markets,” Mr Mohi-uddin said.

“If risk aversion continues to drive financial markets lower then investors should expect the dollar along with the yen to outperform.”

Source: Ft.com

EUR support on daily chart

moneycat — Fri, 27 Jul 2007 06:38:51 +0000

This daily chart shows the Eur/Usd exchange rate. On the 25th the Dollar gained one figure and found resistance slightly above 1.37 where the short term moving average is acting pro Euro. Volatility is contracting and the oscillator is down a bit, just below the zero line.

Right now Euro found support on the shorter moving average at 1.3720: we are probably going to see within short wether or not it is going to resist. The wide distance between the two averages is in my opinion a bearish factor.

If so, then where next? Lower Bollingr Band, at 1.36 is probably the next target. Breaking it would likely mean the reaction from the high is going to be deeper and longer lasting.

How do you explain?

moneycat — Thu, 26 Jul 2007 08:00:39 +0000

Yesterday the USD gained vs. EUR like seldom before: what’s behind this move? Which emotions have been awakened in traders’ minds?

The first reason I can see is the extended move upwards of the cross rate; on the other hand, US markets still seem vulnerable and the mortgage crisis is probably far from its end.

So what do the newspapers say today?

According to the Financial Times, markets were concerned “that problems in the US subprime mortgage and credit markets could spread to other economies”.

Bloomberg reports that “the world’s biggest economy can withstand rising mortgage defaults”.

Seems a bit contradictory, doesn’t it?

Getting Cautious on Eur/Usd

moneycat — Sun, 08 Jul 2007 19:51:05 +0000

In my last post, I wrote a story about the bottoming of Eur/Usd on a weekly chart: It was a good call.

Now I am becoming more cautious as the last top is getting nearer at 1.37 and upside strenght seems to vanish.

Euro at weekly bottom?

moneycat — Thu, 21 Jun 2007 07:26:43 +0000

This is a weekly chart of the Eur/Usd exchange rate for a period of several months starting last year’s last quarter.

As you can notice there is an upward trend going on, since the end of year 2005 (not shown on the chart).

From the recent top, close to 1.37, we have seen a retracement lasting several weeks, to 1.325. The low found support on the fastest SMA.

The pane below has the 3-10 Oscillator showing possible turning point.

Altogether, the weekly chart might show a bottom forming: if this was true then we could expect the uptrend to resume to 1.37.

Coffee, primer

moneycat — Tue, 05 Jun 2007 13:51:23 +0000

I have been attracted by this july coffee chart: I admit I liked it at 112 and looked forward to seeing it higher, but wasn’t ready (psychologically) to trade it.

Now that it’s gone up, I have gone short, expecting to see the gap filled to 114.

Long term Euro chart

moneycat — Fri, 16 Mar 2007 11:25:28 +0000

During most of 2005 USD strenghtened vs. Euro after reaching record weakness around 1.36.

By the end of 2005, a weekly chart would have shown a possible head and shoulders top formation, which might have led Euro not less than 12 figures, but most likely more than that.

However, in the first quarter of 2006 the outlook for Euro strongly improved.

Laziness

moneycat — Tue, 17 Oct 2006 09:27:04 +0000

I have been lazy and didn’t post for more than two months.

My only excuse is that Eur/Usd didn’t move much as it was stuck between 1.25 and 1.29, which makes a wide trading range, but still a trading range…

Eur/Usd going south?

moneycat — Tue, 17 Oct 2006 08:33:58 +0000

The chart below shows the last few weeks, as we can see after having traded for months within the 1.25 to 1.29 range the cross started moving lower.

We have two meaningful signals given by the averages.

Where next? A rebound towards 1.2650 is likely before downtrend resumes: 1.2650 is the next key level, but should new lows be reached before we get that high this would strongly suggest that a strong downtrend is in action.