Category Archives: FOREX

US Dollar and the Bond Continuum ©

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The US currency is up this morning and surprise surprise, gold, among other things is down (gold bugs should not be in worry mode, they should be in general preparation mode… and I don’t mean canned goods and Uni bomber shacks).

Meanwhile, the USD would not be disruptive for US stocks unless/until it gets impulsive and attends a flight to the risk ‘off’ side of the boat. Short of that, a rise in the dollar puts stocks on notice, but doesn’t croak them in real time (as evidenced by the 2014 up phase). Meanwhile, logical rotation is the theme.

If USD goes on to do what I think it will do, the declining black line AKA the 200 day moving average, is the target. So far, so good as Unc is making good progress at turning the MA 50 into support. I am very long pro-USD vehicles. (more…)

USD/JPY Mired in a 31-Year Congestion Zone

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The USD/JPY Forex pair is mired in a 31-year sideways congestion zone, as shown on the following Monthly chart.

Major resistance and support are formed by a long-term 40% Fib retracement level at 124.34 and 23.6%  level at 105.69, respectively. The momentum and rate of change technical indicators have been in downtrend since mid-2013.

Until we see a clear breakout above or breakdown below one of those Fib levels, the Yen will likely continue to be subject to volatile, non-directional whipsaw price action in between them.

Bit Happens

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What an interesting morning so far. There’s yet another clutch of missile chatter from North Korea (what is this? the 4th time?), but the reaction to Armageddon is relatively muted. All the same, at least the color of the ES and NQ is right.

More dramatic is the plunge in Bitcoin, which has lost over a quarter of its value since the start of this month (which, according to my math, is a mere two weeks ago). Apparently the tendency of the Chinese government to want to control anything and everything within their borders isn’t helping the world of crypto-currencies:

0914-bitcoin

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BITCOIN: Momentum is Fading

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The following Daily chart of Bitcoin shows that the momentum and rate of change technical indicators are fading and do not support the latest push upwards to nearly 5000 (actual high was 4969).

Near-term support sits somewhere between 3770 (40% Fib retracement level) and 4000 (price and channel support).

Medium-term support sits around the 50% Fib retracement level of 3400, while longer-term support sits around the 60% Fib retracement level of 3000, which takes it almost to the bottom of the massive 2134-point August candle, as shown on the Monthly chart below.

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Triple-Bottom Bounce in Store for US Dollar?

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The US Dollar ($USD) has dropped to a triple-bottom major support level of 92.00 and is attempting to stabilize, as shown on the following Daily chart. Fairly major resistance lies overhead at 94.00.

All three technical indicators are still in downtrend and the RSI is still below the 50 level, although the MACD and PMO have recently crossed over to the upside.

It is still trading under the bearish influence of a Death Cross moving average formation, so it’s still extremely vulnerable to a break below 92.00 and a swift drop down to its next major support level of 84.00.

Such a drop could be very threatening for equities, inasmuch as further weakness in both of these could see investors incur fairly catastrophic financial losses. As such, we may see $USD buyers step in any time now. (more…)