Bobys Corner-Open Market-April.5.2012

Good Morning:

As we start the pre holiday get away-the markets were shocked when the EUR/CHF fell below the 1.20 peg level.
The SNB is staying committed to buying FX in the marketplace to defend their 1.20 cap on EUR/CHF.
This put the euro on the defensive all morning.  As European equity markets were taking a hit-the euro zone periphery bonds yields rose-and the euro took a hit.  Continued nervousness in the euro zone is also adding pressure to the euro.

Spanish/German 10 year bond spreads widen further to 401 bps.
France sold a total of 8.439 billion euros in various auctions.  The yields were higher-but the participation was just shy of the upside of 8.5 billion euros. 

The Bank of England left interest rates unchanged-as expected.  QE remains stable at 325 billion GPBs.

Asian equity markets were mostly lower-Europe is lower-and US Futures are also lower at this time.

Gold and silver are higher.

Oil is trading at $101.59/bbl.

Tomorrow we have US employment data at 8:30 AM-even with much of the world out for Good Friday and the Easter weekend-it should be a very interesting day.  

HAVE A GREAT DAY & GOOD LUCK

EUR/CHF Continues Bearish Downturn Within Long-Term Downtrend

EUR/CHF (daily chart) as of Monday (10/31/2011) has continued its fall towards the significant 1.2000 psychological support level after having turned down two weeks ago from an important long-term downtrend resistance line extending from the December 2009 high and the key 1.2400 price region.  After having hit the high above 1.2400 two weeks ago, price action broke down below a steep uptrend support line extending from the early August low just above parity (1.0000). The fact that the pair both respected the long-term downtrend resistance line as well as almost simultaneously broke down below the counter-trend uptrend support line, stands as a significant bearish trend indication. With upside resistance continuing to reside around the noted long-term downtrend resistance line, the key downside support target to watch continues to reside around the 1.2000 support/resistance psychological level.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

EUR/CHF Turns Down from Resistance Confluence

EUR/CHF (daily chart) as of Thursday (10/20/2011) has hit and tentatively respected a key resistance confluence that includes both a long-term descending resistance trend line extending back almost two years, and a key support/resistance line at the important 1.2400 level. Therefore, price is currently at a critical juncture. This occurs after price action rose dramatically (around 2400 pips in total) in a substantial bullish correction extending back to the early August all-time low just above parity. If price continues to respect the current resistance confluence, the next downside support target resides around the key 1.2000 price region, which is an important support/resistance and psychological level. To the upside, in the event of a breakout above the resistance confluence, the key upside target to watch resides around the 1.2700 price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

EUR/CHF Drops Precipitously to Hit Downside Price Target

EUR/CHF (daily chart) as of Monday (8/01/2011) has dropped dramatically to hit its downside target area just above 1.1000, establishing yet a new all-time low around 1.1023 in the process. This occurs within the context of a clear long-term, medium-term, and short-term bearish trend for the pair. This downside target price region represents both a key 161.8% Fibonacci extension as well as a separate 261.8% Fibonacci extension target within uncharted price territory. A bullish retracement/correction within the context of the recent dramatic bearishness should soon be due. In the event of a downtrend continuation, which would be confirmed on a strong breakdown below the 1.1000 psychological level, price action could potentially begin targeting further uncharted downside around the 1.0600 price region, which represents the 261.8% Fibonacci extension of the last major bullish retracement.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

EURCHF tests 38.2% Fibo resistance

The EURCHF is testing key resistance at the 1.2923 level. The level corresponds with the 38.2% retracement of the move down from the early April high to the low on April 19th.  The high price today reached 1.2926.  The pair has rallied sharply today on the sharply lower CHF.  USDCHF has also moved sharply higher. 

The ability to hold the 38.2% should solicit some profit taking.  Support off the trendline in the chart above comes in at the 1.2902. Below that level is support against the 1.2887 level. This level represents the 38.2% of the most recent leg to the upside in the trend higher.  If a market trend is to continue intraday, holding this level is a clue as to the bullishness (see chart below).  The next key support comes in at the 50% retracement and 100 bar MA on the 5 minute chart (see below).

NY Opening Forex Commentary:EURO diverges from the rest

EUR/CHF Pushing Against Resistance

The EUR/CHF pair which had been hammered all summer on fears of the Euro’s demise, possible bond defaults in Greece, general flight to CHF on risk concerns; all in addition to straight demand for Swissy for loan repayments throughout Europe. The appreciation of the Euro in September has out paced the Swissy and we see the pair pushing against trendline resistance. If this level holds we could see the pair lose some steam and push back toward the 38.2% retracement of the September move and then possibly the 50% level and the trending 21 day moving average before it finds some support.

Eur/Chf running into possible resistance

Eur/Chf  has had a nice run thus far, up over 125 points in the European session. The pair broke above its 200 hour M/A of 1.2945 and has not looked back. However it may have run into some resistance at 1.3000-10 level. The 61.8% fibo of move down from 1.3159 to 1.2759 lies at 1.3006 and there has also been rumors of good institutional offers placed here.

If the pair holds a run back to 1.2945 is likely. A break above may bring us to the 1.3050-60 level.

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