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Seeing the Forest from the Trees: An Analysis of Global Markets
Afternoon Technicals (all charts)
US traders return from the Memorial Day to a sizeable bounce in ‘risk’ (USD drop, especially against the AUD and NZD). The bounce probably composes the beginning of a larger and much needed correction. My trading plan then will focus on being long risk FX (AUDUSD and NZDUSD) for the next few % before the next bear leg in early June. I’m also closely monitoring the USDJPY / US yield situation.
AUDUSD 240 Minute
Prepared by Jamie Saettele, CMT
Support is expected from last week’s close to last night’s low (9755-9800). Longs are favored, especially below 9800, towards 9935/65. 10020 is considered an aggressive bullish target but also the ideal level to initiate shorts for resumption of the larger bear.
NZDUSD 240 Minute
Prepared by Jamie Saettele, CMT
Support is expected from last week’s close to last night’s low (7835-7580). Longs are favored, especially below 7580, towards 7685-7750. 7810 is considered an aggressive bullish target but also the ideal level to initiate shorts for resumption of the larger bear.
USDJPY (Black) and 10-year Yield Differential (Red)
Prepared by Jamie Saettele, CMT
The chart above depicts USDJPY and the difference between 10 year yields on US and Japanese paper. Lows in the yield differential have tended to occur before large rallies in the exchange rate. The differential reached a record low last week of .85 (in line with the September 2011 low). USDJPY supports are 7900 and 7830.
To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele
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Jamie is the author of Sentiment in the Forex Market.
