Providio’s Daily Futures Market Comme...

Providio’s Daily Futures Market Comment for 01/10/12

Posted in the Day Trading Forum

Since: Nov 11

Ho Chi Minh City, Vietnam

#1 Jan 10, 2012
10Jan The possibility of Chinese intervening to spur economic growth and Fitch’s less negative outlook on Europe underpinned yesterday’s rally in most of the physical markets we track. However, they are lagging our Overbot Equity sector while the EuroFX is looking lonely, extending its stay on our Oversold list.
This week’s light US economic calendar turns attention to GOP primaries and any news coming out of Europe.
Currencies:­­­­ 10Jan What started out as a stronger day across most of the majors faded as the session wore on. The “Commodity Currencies” benefiting most from speculation that Chinese intervention may help spur demand. Volumes are inching their way back to pre-holiday levels.
With the exception of the weaker tone in the Euro, we note the wide consolidation ranges that have been in place since the summer, but these patterns are running out of time. If there is a resolution that emerges on higher Volume, in keeping with traditional technical analysis, the moves could be enormous. Below average Volatility may be telling us that an “uncoiling spring” may be in the offing…
Aussie: 10Jan Testing the pivot/fulcrum nature of the March 200-day Moving Average at 103.55, but still in a wide, symmetrical triangle consolidation pattern in place since August that is bound by 9900-10420. All of our technicals are pointing higher and the market is not yet Overbot. This currency, along with the Canadian, has been highly correlated to the physical commodities’ action.
Seasonal Snapshot: Divergence between all three patterns until mid January: 30yr down, 15 yr up and the 5yr consolidates. After rallying until 22Jan, the 30yr then joins the 5&15 yr in a move down until the end of the month.
British: 10Jan Respecting rising trend line support that forms the lower end of our symmetrical triangle that has been in place since August.
With most tracked US denominated FX contracts lower on the day after the US Jobless number, it seems increasing likely that the Sterling is destined to test support in the 1.5350 area. Most of our signals indicate a broadening weakness with some residual strength stemming from safe-haven to the Euro’s issues.
Additionally, the 200-day Moving Average is falling and the market is still well below that level.
Seasonal Snapshot: The 15&30yr move down until 10Jan followed by choppy consolidation in all three patterns until Feb.
Canadian 10Jan Today’s rally tests the upper end (98.50) of the symmetrical triangle formation that has been in place since August. There has been high correlation to the Aussie$ and physical markets. The 200-day moving average lies well above at 100.55
Seasonal Snapshot: The 5yr pattern declines precipitously from 08-22Jan. The 5&15yr patterns arrive late to the party (14Jan), but stay longer (28Jan).
Dollar Index: 10Jan Watch the EuroFX, as it seems to be trumping the other major currencies in underpinning the Dollar Index since November. The resulting rising channel is bound by 80.30-83.00. The market is leaning Overbot, but a test of the upper boundary of the channel may be in the offing. 80.00 will continue as strong support, with a new, higher support levels at the obvious 81.00 and also at about 81.30.
Seasonal Snapshot: All three patterns rise until 20Jan. On 24Jan, the 15yr breaks away from the ensuing consolidation and rallies again until the end of the month.
Euro-FX: 10Jan Watch the round pennies on either side of the market for support and resistance. The falling channel in place since late October that is bound by 125.70-130.25. The lower end coincides with the August 2010 low. Oversold somewhat, but not showing signs of turning.
Seasonal Snapshot: A decidedly weak tone until the end of Feb.
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