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The Charts That Matter In FX Next Week

Tyler Durden's picture





 

And now back to finance. From John Noyce of GS FX sales, one of the better chartists out there, here are the charts that matter in the next week. Of particular note: dollar strength, silver weakness, range bound rates, rate-USD correlations, some interesting observations in a secondary pair of EURKRW, the bullish key day reversal in the USDJPY, the derivative nature of the AUDCAD as a China/US proxy, and more.

 

 


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Sat, 01/08/2011 - 18:24 | Link to Comment Contura
Contura's picture

Finance at last. Thanks Tyler, it has been somewhat surreal the last few hours...

Sat, 01/08/2011 - 19:22 | Link to Comment Salinger
Salinger's picture

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Sat, 01/08/2011 - 22:38 | Link to Comment NOTW777
NOTW777's picture

yeah, at least ZH stopped repeating that the shooter was an afghan vet

Sun, 01/09/2011 - 12:32 | Link to Comment Printfaster
Printfaster's picture

I knew veterinarians could be specialized as to animal, but to special to afghans:

http://www.wilmotbennett.com/_dbase_upl/afghan_dog.jpg

I never heard of an vetrinarian shooting any living thing.

 

Sat, 01/08/2011 - 18:31 | Link to Comment rocker
rocker's picture

Excellent as always. Thanks ZH.

Sat, 01/08/2011 - 18:38 | Link to Comment Bigger Dickus
Bigger Dickus's picture

So, wish one falls more next week: gold or eur/usd?

Sat, 01/08/2011 - 18:40 | Link to Comment Salinger
Salinger's picture

and more OT this little story seems to have been lost in translation

Obama Administration Reportedly Plans to Create Internet ID for All Americans

http://fxn.ws/fHRGrl

Sat, 01/08/2011 - 18:52 | Link to Comment flacon
flacon's picture

> What we are talking about is enhancing online security and privacy

 

LOL! PRIVACY! LOL!

Sun, 01/09/2011 - 10:39 | Link to Comment Cursive
Cursive's picture

@Salinger

As if CARNIVOR wasn't enough, now this shit.

Sat, 01/08/2011 - 18:42 | Link to Comment ldotf
ldotf's picture

thanks for sharing. It should be an interesting week

Sat, 01/08/2011 - 18:42 | Link to Comment ZeroPower
ZeroPower's picture

Yes, EURUSD lots more lows to come. USDCAD will be interesting to see which one out-strengthens the other.

Sat, 01/08/2011 - 19:53 | Link to Comment mynhair
mynhair's picture

Silver isn't weak; it's just shaking out the weak hands.  Nothing has changed, there is still no way out, and the smoke is increasing in the room.

Sat, 01/08/2011 - 20:27 | Link to Comment RobotTrader
RobotTrader's picture

The "Gold Bitchez" crowd has been notoriously silent the last week.

Oh, by the way, wasn't Goldman's advice on FX among the worst for its clients last year?

Probably good for a fade.

If not, then Peter Schiff will be puking up blood when the dollar takes off and his beloved foreign currencies fall off a cliff.

By the way, the only charts that really matter to me are the SPY, Oil, and Gold traded in the major currencies:

All are still very bullish.  In fact, lately, the SPY has outperformed both oil and gold priced in Euros.

http://stockcharts.com/freecharts/candleglance.html?$spx:FXE,$spx:FXY,$spx:FXC,$spx:FXS,$spx:FXA,$spx:FXM,$spx:FXB,$spx:FXF|D

http://stockcharts.com/freecharts/candleglance.html?$WTIC:FXE,$WTIC:FXY,$WTIC:FXC,$WTIC:FXS,$WTIC:FXA,$WTIC:FXM,$WTIC:FXB,$WTIC:FXF|D

http://stockcharts.com/freecharts/candleglance.html?$GOLD:FXE,$GOLD:FXY,$GOLD:FXC,$GOLD:FXS,$GOLD:FXA,$GOLD:FXM,$GOLD:FXB,$GOLD:FXF|D

 

 

Sat, 01/08/2011 - 20:41 | Link to Comment Careless Whisper
Careless Whisper's picture

the 3 month chart of CSCO looks interesting. if it's strong enough to stay above $21 i'm a buyer.

the best thing for silver is for it to trade sideways for a few months. if it does that i buy more.

 

Sun, 01/09/2011 - 13:58 | Link to Comment TonyV
TonyV's picture

CSCO will get a bounce as we get close to earnings report.

Sat, 01/08/2011 - 21:36 | Link to Comment SWRichmond
Sat, 01/08/2011 - 23:34 | Link to Comment Seer
Seer's picture

Ha ha...

http://finance.yahoo.com/q/bc?s=CADUSD=X&t=2y&l=on&z=l&q=l&c=

Why people keep being distracted by what everyone else is being distacted with is, well, it's distracting!

A whole bunch of crap!  I'm way up, and it required taking no advice from "experts" such as yourself.  All I did was ignore the mainstream BS and everything was quite clear; oh, that and the fact that I understand the REAL fundamentals.

Sat, 01/08/2011 - 21:00 | Link to Comment SWRichmond
SWRichmond's picture

Completely OT:

Hey Saints fans: HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

Sat, 01/08/2011 - 21:03 | Link to Comment RobotTrader
RobotTrader's picture

Another utter disaster for NFL sport betting junkies.

New Orleans was favored by 9.5 points with an over/under of 44.

Not only did the Vegas handicappers get killed, but the public was favoring the Saints big time and they got their clocks cleaned.

Another reason why many handicappers and sports wagering junkies will eventually flee Las Vegas and head for the NYSE, where you can at least bet on a trend and cut your losses if you are wrong.

Sat, 01/08/2011 - 21:08 | Link to Comment SWRichmond
SWRichmond's picture

...where you can at least bet on a trend and cut your losses if you are wrong.

Cut them?  Losses are for suckers, socialize them!

Sun, 01/09/2011 - 10:47 | Link to Comment Cursive
Cursive's picture

To paraprhase the bulltards, anyone taking the points with an injury-plagued team down to it's 4th string running back and playing on the road deserves to lose.  The NFL is as bad as the FRB for letting a 7-9 team HOST a playoff game.  But you are correct, Robo, it's all a gambling racket now.

Sat, 01/08/2011 - 22:14 | Link to Comment bunkermeatheadp...
bunkermeatheadprogeny's picture

I thought political stability was finance?

Sat, 01/08/2011 - 23:59 | Link to Comment monopoly
monopoly's picture

Gold, silver could be in for a major correction as it has done many times. I closed out all my trading positions and have just core holdings and cash and physical. Those are not for sale as long as O G and B are still raping us.

Have not taken part in much of the ramp up in vacations, burritos, kindles and movies. But that is ok. No complaints. And no shorts.

Sun, 01/09/2011 - 01:03 | Link to Comment frugartarian
frugartarian's picture

ahh charts... i like. It's interesting how people from goldman look at em. Thanks for posting.  My target profit for eur / usd is 126.60.

and for aud / usd around 92.95 - about a 650 pip drop.

usd / jpy 85.90 even

and dollar index 82.70

at break even stops fer all of em .

 

I enjoy the positive correlation of stocks and the US dollar, i hope it lasts

Sun, 01/09/2011 - 12:13 | Link to Comment ZeroPower
ZeroPower's picture

Agree on EURUSD and AUDUSD

 

Stocks and DXY + corr? What? Where? The correlations out of whack and besides perhaps a very insignificant (0-0.2) + corr, theyve been neg correlated the previous months.

Sun, 01/09/2011 - 05:47 | Link to Comment vitoox
vitoox's picture

That time -

http://www.zerohedge.com/article/goldman-goes-goo-goo-gold-gold-market-p...

goldmanites where right.

Why should they lie this time? ;)

Sun, 01/09/2011 - 17:42 | Link to Comment GoinFawr
GoinFawr's picture

CAD Bitchez!!!!!!

Sun, 01/09/2011 - 11:52 | Link to Comment Orly
Orly's picture

Thanks again, ZeroHedge for providing information heretofore unobtainable for the average 4X trader.  Whether Goldman is right or wrong, it is quite helpful to have input from world-class professionals, especially in the craziest markets the world has ever seen.  I sincerely appreciate it.

___________________

In regard to the prosects of the USDJPY pair in particular: I have been studying this pair closely for some time and last week, the pair showed a fundamental breakdown after the US jobs report was released.  Prior to that, the pair had been rejoining its inverse correlation to the SPX since the last Japanese intervention in September of 2010.

Disconcerting is the fact that the negative jobs report "flipped the switch" back to the direct correlation between the SPX and USDJPY and traders are re-pricing US economic weakness, lowering yields and swaps on respective government bonds and most likely QE III, in whatever manifestation or euphemism may be used to describe it.

Granted, it has been but a single-day affair, so this may be an anomaly in the pair.  For technical reasons, like taking gains on the big moves had by the pair earlier in the week, it is possible that this is a blip out of place.  I have a feeling that is not it.

With earnings season coming up in the SPX, there will be massive buying into the beginning of the week as the makers look for their marks.  Expect the USDJPY to follow suit higher, in direct correlation with the stock markets.  The pair will probably top in this area @~ 84.87, as it comes out of the gate next week full of vim and vigor.  However, it must be kept in mind that the SPX had a failed "stitch" into its upper Bollinger Band at the end of last week.  The H8 SPX chart should give one pause for contemplation because when the stitch fails, the entire thread gets unravelled.

The SPX will most likely have some sort of correction from the level of the failed stitch @~ 1278.  Along that correction will follow the USDJPY pair as it finds itself full of piss and vinegar, perhaps amplified by a near-panic sell-off of the SPX to ~950.  The moves could be swift and bold, maybe take your head off.

All I am really saying here is to be very careful with the USDJPY pair in the weeks ahead.

But...if you want numbers...

They may be ridiculous but the charts confirm that the USDJPY pair has itself failed to stitch the upper Bolli on the H4, the H8 shows a definitive bounce lower from its upper Bolli and the Daily demonstrates the BBMA (Bollinger Band Moving Average...) was penetrated, then rolled back with a close (slightly...) lower than the BBMA, indicating at best sideways movement and possibly a sharp reversal going forward.

The Weekly chart shows that this past week's moves, while seemingly impressive weren't really so much.  There was a long wick above the weekly candle that could indicate some exhaustion already in the corrective move higher (most of which came after the jobs report and re-correlation with the SPX...).

The pair has set itself up to create a birthday candle (a candle of equal size to the adjacent candle but the opposite color, returning a complete retracement of the prior candle's move.  They usually occur in even numbers in a grouping I call a "birthday cake" and are usually seen along the BBMA...) or a doji candle next week.

Using Fibonacci retracement levels, as drawn from the all-time highs of November, 1982 and the all-time lows of April 1995, it can be seen that the pair has already bounced off the lows and has put in a rather weak correction.  A move below 80 could spur panic selling and promote selling of other US-based assets, sending the SPX lower and the cycle will feed on itself until the downside is exhausted.

The first stop lower would be at the ~76.37 level, while the Fibo-extensions see a move possibly as low as 71.  Since I can't really wrap my head around that number, I will just say that the downside maximum from this point would be @~ 75.561.

Call me insane.  Call me whatever.  Just promise to be careful here...

and wear your rubbers!

Orly

Mon, 01/10/2011 - 22:03 | Link to Comment iota
iota's picture

Birthday candles! I always thought of them as Twin Candles.  I keep wondering if there's a japanese name for them.

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