CommerzB-CommodityFX 16th Oct13

Not a report I have recently watched too closely but given recent price moves its worth starting to watch the commodity fx pairs more closely as well as the commodity indexes and components.

Lets see if this DX breakdown holds. If it does these pairs will run. When they move they generally trend for extended periods.

Commerz-commodityFX-16-10-13

 

CommerzB – FX Weekly Technical Analysis – 17th Oct13

Commerz pouring cold water and siting the 1.367 level as a number have. They expect a stall at this level and they could well be right.

Will buyers step forward for the euro at this level? Or more likely will the institutions see an opportunity to roll over the asset allocators and force them to buy here?

I personally suspect the latter but it is very possible the move stalls as recent fx markets have been choppy and already provoked many reversal in positions, as we know.

Here the report:

Commerz-wklyfx-17-10-13

JPM-FX-WklyTech-17th Oct 2013

Released earlier today, even JPM couldn’t directionally second guess what would occur on the eurusd and gbpusd etc. A few hours later and it appears, so far, we do have some answers here to direction.

We can add their tech and position on the levels to all the other fx views published this week. It was clear there was much in house confusion over where next.

Lets see if these levels and direction hold to the close and into the weekend, ideally.

A lot of large capital allocators will need to take note and act, if these levels persist.

The herd will be forced to move and this generally means a pay day for the institutions.

Here the report;

JPM-WklyFX-17-10-13

Rich

Commodity Index Volatility – GSG Index 2008 – 2013

Currently on a historic annual volatility of 14% vs the mean this is low. FX has been quiet of late but if the major FX pairs start to see volatility and the Dollar index falls through this key level commodity index volatility will exponentially increase. An asymmetric trade to play off the low historic (below mean) average volatility in the commodities would be to use options directionally. In either direction would logically be correct so long as there a major new DX trend emerges. Many chart technicals in inverse and correlated instruments suggest the reverse. Ie weakness in the DX (US$ index) which would directionally imply a large option call position. When/if you combine correct directional trades with asymmetric instruments you haveĀ  powerful combination.

Here a reminder chart on one commodity index the GSG.

All the best

Rich

Technical Trading Chart EURUSD – 17th Oct 13

EurUsd defines the dollar basket and today some major moves occurred. The pair help to define many instruments across world markets so what happens here is important.

The euro is threatening to end her multi year cyclical bear vs the usd. Fundamentally its hard to point to the rational for this price move but hopefully we have all learnt by now that rationalizing major price moves is often unwise. Insiders are often ahead of the data. Its pays to follow their lead rather fight technical trend changes from the historic data.


Trading wise a new technical trade kicked off for me today, on medium and longer term timescales. The shorter term trade long euro kicked off a month ago which i continue to run.

Lets see if this is a false breakout. She has room to run in terms of over bought levels.

Cheers Rich

 

CommerzB – Wkly Technical Analysis of Major Asset Markets – 16th Oct 2013

I haven’t seen participants so confused by the fx markets for many years.

Everyone is saying something different and is having to reverse positions and stance every few weeks or so.

Active fx traders are starting to be cut up by the chop.

I want to say that historically when price chops up like this for extended periods it usually, eventually, leads to a significant new directional trend so we must watch this but not get tempted too quickly by the numerous false moves. The USDJPY the EURUSD, EURGBP, GBPUSD, EURSGD etc etc.. They are all chopping up at near to important levels. A trend will emerge and when it does it will run. This is what classic price theory suggests from these recent moves.

I leave you with the CommerzB report but please read their FX comments and tech alongside all the other FX reports over the last few weeks to make sense of the chaos in the FX markets.

Commerz-wklytech-16-10-13

All the best

Rich