U.S. Dollar Trading (USD) opened the week strong in Asia but lost ground gradually across the day as sentiment improved and stocks rallied off lows around the world. Helping sentiment was the large jump in January ISM Manufacturing to 58.2 vs. 55.2 previously. DJIA +118 points closing at 10185, S&P +15 points closing at 1089 and NASDAQ +23 points closing at 2171. Looking ahead, December Pending Home Sales are forecast at 1% vs. -16% previously.
The Euro (EUR) bounced away from 1.3850 support to reclaim 1.3900 in the US session as EUR/JPY and EUR/GBP continued to rebound. Jan Manufacturing PMI was revised higher to 52.4 vs. 52.0 previously. Sentiment towards the Euro will be directly linked with the ongoing Greece saga. Overall the EUR/USD traded with a low of 1.3850 and a high of 1.3940 before closing at 1.3920.
The Japanese Yen (JPY) like the Dollar the Yen weakened across the board as risk appetite picked up off lows and USD/JPY ground higher. AUD/JPY reclaimed Y80 ahead of the RBA meeting today and was helped out by Chinese PMI remaining as fast expansionary pace. Overall the USDJPY traded with a low of 89.76 and a high of 90.97 before closing the day around 90.60 in the New York session.
The Sterling (GBP) trailed the recovery as Europe sold the pair below 1.5900 before strong US data and stocks helped the pair rebound. GBP/JPY tested Y143 but rallied in the US session to close just under the key Y145 level. January PMI forecast at 56.7 vs. 54 forecast. Overall the GBP/USD traded with a low of 1.5849 and a high of 1.5982 before closing the day at 1.5960 in the New York session.
The Australian Dollar (AUD) concerns that the RBA may not raise rates hurt the sentiment towards the AUD early in the day but as stocks around the world picked up and commodities staged major rallies the Aussie came back into demand and reclaimed the 0.8900 level. Overall the AUD/USD traded with a low of 0.8876 and a high of 0.8926 before closing the US session at 0.8915. Looking ahead, RBA Rate announcement forecast to hike 0.25% to 4.0% vs. 3.75% previously.
Oil & Gold (XAU) rallied sharply above $1000 in a very bullish move after weeks of testing the downside. Overall trading with a low of USD$1076 and high of USD$1108 before ending the New York session at USD$1106 an ounce. Crude Oil jumped $2 a barrel on bargain hunter demand. Crude Oil was up +$1.98 ending the New York session at $74.87.
Monday, February 1, 2010
USD/JPY Kilroy - Reverse Head and Shoulder
Daily: There was anticipation for bottoming action at the 88.30-88.80 level. In that post, a decline was projected after a completed bearish Gartley.
However, price action is telling us otherwise - that the market is already ready to continue the rally from the 89.10 area. A swing projection brings the pair to 98.00, which occur after breaking up above a “Kilroy” or an upside down head-and-shoulder pattern. The kilroy was a famous WWII cartoon that pictorially represents reversed head-and-shoulder.
4H: The first chart below is the original projection, for which there was no signals for.
The second one, is an adjustment due to the price action that established a kilroy in this time-frame. Remember the fractal nature of the market.
At the very least, the market is showing reversal readiness, which spells continuation rally.
However, price action is telling us otherwise - that the market is already ready to continue the rally from the 89.10 area. A swing projection brings the pair to 98.00, which occur after breaking up above a “Kilroy” or an upside down head-and-shoulder pattern. The kilroy was a famous WWII cartoon that pictorially represents reversed head-and-shoulder.
4H: The first chart below is the original projection, for which there was no signals for.
The second one, is an adjustment due to the price action that established a kilroy in this time-frame. Remember the fractal nature of the market.
At the very least, the market is showing reversal readiness, which spells continuation rally.
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