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Began building US$ longs this morning. Technically, the US$ Index is
resting on rising trendline support on daily's, weekly's and monthly's;
both spot and future. Fundamentally, I don't think we have or will see a
shift from the Rubin/Greenspan rhetoric of favouring a strong dollar as
the days, weeks progress. My timeframes tend to be more longer term and
hence with wider stops, so I can stomach some knee-jerk reaction on
Monday to whatever may transpire from the Far-East during the weekend.
My instrument of choice ahead of the weekend is the $index as it
currently acts as a kind of de-leveraged view on the yen.
Stating the obvious - this week will be an outside bar reversal on the
weekly's. My models now imply that this correction should take us down
to the 128-132 area. I have orders in for Sunday nights Asia open to
buy, scaling down, from 132. Just in case.
C$. I agree with Richard Chevovin that the market is targetting higher
levels. BoC must be concerned that the C$ did not recover even in the
face of a recovering yen and aud. Short term I am targetting 1.48 and
then perhaps 1.50 as Richard describes.
E.
ps. Bonds I think have put in an impressive performance today, rallying
back to unch'ed (as I type) from earlier losses, even in face of
stronger currencies.
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