NEWS / Foreign Exchange

The trend remains down for the US dollar

The whips continue and we have now given up a chunk of last months excellent profits. Such is the nature of markets. We need to get on top of this, or if we have lost the zone, slow down stand back a bit. We will see how the central bank results pan out today.

With meetings for the BoE, ECB, and FOMC all upon us the market has largely squared up from a speculative view point. My view remains that the real money, the large institutions, funds, and even central banks, still need to build their Euro allocations toward their US dollar allocations. This process will take several years, but in the medium and even short term, it means that they will be buyers of Euro on dips and sellers of the US dollar on rallies.

Therefore it is when the short term speculators like us are getting out of short US dollar positions, that the real money will begin to sell dollars and buy euro.

It is likely the central banks will deliver on market expectations, BoE 25 points, ECB on hold but to hike next meeting, Fed on hold but risks more balanced. If so I believe we could see a little bit more of a US dollar rally, sell the rumour buy the news phenomenon, before getting a resumption of our favoured US dollar down-trend.

The trend remains down for the US dollar, it is just this consolidation bounce that is causing us so much trouble.

The Australian dollar remains a strong buy, post the profoundly inflationary Federal budget. The RBA will have to re calculate its inflation expectations.

Currency Trading

TACTICAL Points are for May

EUR/USD 1.3540 -204 pts
Long 2 units 1.3589, stopped 1.3561
Long 2 units 1.3629, stopped 1.3571
Buy 2 units on stop 1.3589, stop loss 1.3551
Buy 2 units on stop 1.3659, stop loss 1.3591
Short 2 units 1.3531, stop loss 1.3569
Sell 2 units on stop 1.3501, stop loss 1.3539

GBP/USD 1.9900 -156 pt
Long 2 units 1.9919, stopped 1.9901
Buy 2 units on stop 1.9939, stop loss 1.9871
Buy 2 units on stop 1.9979, stop loss 1.9921
Sell on stop at 1.9841, stop loss 1.9889

USD/YEN 120.00 -261 pts
Buy 2 units on stop 120.39, stop loss 119.91
Short 2 units 119.71, stop loss 120.19
Short 2 units 119.51, stopped 119.99
Sell 2 units on stop 119.61, stop loss 120.09

EUR/YEN 162.45 -13 pts
Buy 2 units on stop 163.49, stop loss 163.01
Short 2 units 162.81, stop loss 162.99

EUR/GBP .6810 -42 pts
Long 2 units .6829, stopped .6801
Buy 2 units on stop .6829, stop loss .6791
Sell 2 units on stop .6781, stop loss .6829

GBP/YEN 238.75 -160 pts
Buy 2 units on stop 239.69, stop loss 238.71
Short 2 units 238.41, stop loss 238.99

AUD/USD .8280 -134 pts
Long 2 units .8269, stop loss .8241
Long 2 units .8289, stop loss .8251
Long 2 units .8309, stop loss .8261
Sell 2 units on stop .8221, stop loss .8259

NZD/USD .7350 -120 pts
Long 2 units .7399, stopped .7361
Buy 2 units on stop .7419, stop loss .7371
Sell 2 units on stop .7331, stop loss .7359

AUD/YEN 99.30 -43 pts
Long 2 units 99.19, stop loss 98.91

STRATEGIC

EUR 1.3540
Buy at 1.3649, S/L 1.3581
Bearish at 1.3521, S/L 1.3579

GBP 1.9900
Buy at 1.9979, S/L 1.9901
Sell at 1.9841, S/L 1.9899

YEN 120.00
Buy at 120.49, S/L 119.81
Sell at 119.31, S/L 119.99

EUR/YEN 162.45
Bullish at 161.99
Took Profit at 162.81
Buy at 163.39, S/L 162.51
Sell at 161.51, S/L 162.09

AUD .8280
Buy at .8289, S/L .8231
Sell at .8141, S/L .8199

NZD .7350
Buy at .7429, S/L .7371
Bearish at .7341
Stopped at .7399
Sell at .7281, S/L .7339

CHF 1.2120
Buy at 1.2229, S/L 1.2161
Bearish at 1.2081, S/L 1.2139

CAD 1.1020
Buy at 1.1249, S/L 1.1181
Bearish at 1.1531, Profit S/L 1.1099