At the Close. Still too many questions left...
London goes home but I am still left with many questions unanswered after today's rally. Is it marking more USD losses ahead? An over-extended correction rally from yesterday's bull run? What is going on with AUD and Gold? Why CHF and JPY are moving so differently these days? Honestly, the only thing I can be 'proud' of is of having seen the EUR/JPY plunge 100 pips after calling the hit of extreme OB level.
The market forces are quite nervous right now, have no doubt about this. But I also see that the USD is not able to make real progress where it should, i.e., against JPY and CHF, the latter really posing a serious threat now as the unit is trading below the 50EMA intraday, having already tested once the 200SMA. If we add to taht the fact that Cable has a bullish cross intradya and that the EUR could do the same soon, then, oh, come on! where are Fibo lines acting as real market magnets?
Add to this messy party the AUD, rising to the 200SMA hourly having held the 0.89 level, which coincided with the test of the 50EMA in EUR/JPY after it ahd triggered a bullish MA's cross (15m), which has caused the cross to spike up by 40 pips (once again, taking triggers after the first retracement to the 50EMA worked fine).
Are JPY crosses / Pacific Dolalrs the ones dictating the course of action in the majors? I would not like to think so, but I'm afraid there's little we can do here as 'carry madness' takes center stage, helped by the artifical holding-up of the Stock Markets, which push 'carry cows' to reach their goal, i.e., sending JPY and CHF lower.
In the CHF case, I have to say that I was not expecting this move. After yesterday ahving completed a second day below 1.6685, I was expecting a better progress by the CHF, but I guess am too idealist for such a hostile environment, and that did not come true. The behaviour of EUR/CHF is telling us the whole story, and until it can see a good and sizeable down move, we will be trapped in the perma-USD bears hands.
Let's see what the market has to offer us tomorrow. Countdown to Barcelona's ITC continues, 2 days left!
Posted by Tony Juste on October 23, 2007 at 18:05
BECAUSE YOU CAN READ THIS, THANK A TEACHER. BECAUSE IT'S IN ENGLISH, THANK A SOLDIER.
