Archive For "June, 2010"

The U.S. dollar reduced a loss after siappointing ADP jobs numbers. The greenback was lower earlier versus the euro after weaker-than-expected demand for three-month loans from the European Central Bank tempered worries about the health of the euro-zone’s banking sector.

A European Central Bank three-month loan facility elicits less of a reaction among euro-zone banks than expected, easing liquidity-related fears about the financial sector’s health. Attention begins to swing to what the results of European banks’ “stress tests” will show.

WASHINGTON (MarketWatch) — Charles Evans, the president of the Chicago Federal Reserve Bank, said Wednesday he was wary of calls for the Fed to buy more assets to stimulate the economy. “There are limits to what policy can do,” Evans said in a television interview on CNBC. “I am wary of how effective those policies would be,” he said. The U.S. economy is not faltering and growth will continue around a 3.5% rate, Evans said. While the monthly data has been uneven and there are moments when it looks like growth has paused, “I am expecting growth to continue -the recovery is definitely on,” Evans said. The Chicago Fed president said he was not optimistic about the pace of employment growth in coming months. He said inflation has recently moved down in a sharp, unusual, fashion and should be under 2% for the next three years.

NEW YORK (MarketWatch) — Treasury prices turned higher and the dollar pared a decline against the euro on Wednesday after ADP said U.S. private-sector payrolls rose 13,000, far fewer than economists expected. Yields on 10-year notes , which move inversely to prices, fell 1 basis point to 2.95%. The euro rose to $1.2256, compared to $1.2279 just before the data but still up from $1.2206 in North American trade on Tuesday. The dollar index , a measure of the greenback against a trade-weighted basket of six major currencies, fell to 85.853 from 86.053 late Tuesday.

Ireland’s gross domestic product grew by 2.7% in the first three months of 2010, government data showed Wednesday, ending eight consecutive quarters of economic contraction thanks largely to the strength of the nation’s export sector.

The U.S. dollar was mostly lower Wednesday, while the euro jumped versus major rivals after weaker-than-expected demand for three-month loans from the European Central Bank tempered worries about the health of the euro-zone’s banking sector.

Asian stocks are beaten down Wednesday, with worries about a Chinese economic slowdown and impact of the yen’s recent strength damping confidence and prompting a further sell-off in banks and exporters.

LONDON (MarketWatch) — The European Central Bank allotted just 131.9 billion euros ($161.1 billion) in three-month loans to euro-zone banks at an interest rate of 1% on Wednesday, news reports said. The total was below expectations. The refinancing was closely watched as a gauge of the health of European banks, coming ahead of Thursday’s expiration of a 442 billion euro 12-month refinancing operation. The euro extended a gain versus the U.S. dollar to trade at $1.2260, up 0.6% on the day. The shares of European banks rose following the results.

LONDON (MarketWatch) — The annual pace of consumer inflation in the 16-nation euro zone slowed to 1.4% in June from 1.6% in May, the European Union statistics agency Eurostat reported Wednesday in a preliminary estimate. Economists had forecast an annual CPI reading of 1.5%. The rate is below the European Central Bank’s target of just below 2%.

Recap: Good evening and morning PipHutters! Sorry signals are coming out later these days. I’m working hard on the upcoming Premium release (I’ll give an update in the comments later) and it is eating up a lot of my time .

I woke up yesterday with my short well into the profit. On the south break of 1.2180 I put the SL at 1.2200 to let the profits run, and the SL was eventually triggered for 90+ pips. Not great, but better than a sharp stick in the eye.

Daily Outlook: Risk aversion continues to grow in force as bears gain confidence with each leading economic indicator that tickets south. Once again stocks around the world are dropping as investors discuss possible support levels instead of percent gains. The bearish break of rising trend support from a few days ago (that triggered my short) has technically been powerful: the bears have picked up momentum with the pair falling 100 pips yesterday with little to no correction to the upside. Fundamentals are beginning to lineup with the overall downtrend again and I’m expecting a re-challenge of 1.18 in the coming weeks barring any surprises.

Lots of news today so check the forex calendar for details. Also a notice that 30m candelsticks from the candlestick alert service have been very profitable the past few days.

Trading Idea: Looking for opportunities to sell on rallies. There are three main shorts I would look for and I’ll list them in order of most conservative to most aggressive:

The most conservative trade would be to short near falling resistance (top blue line on my chart), which is currently at 1.2370, with short targets down to 1.2200 for 170 pips. I doubt we will see this level tomorrow though if we do I will short.

My primary trade and the middle ground between conservative and aggressive is a short in the 1.2280-1.2300 resistance zone. Short targets from 1.2280 at 1.2250, 1.2230, 1.2200 and 1.2170 for 110 pips profit.

The most aggressive trade would be a short in the vicinity of 1.2220 with confirmation with short targets down to 1.2140 for 80 pips profit.

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