The website is currently under-construction and a new theme selection &  older posts uploading taking place currently due to hidden spam links which killed the database on my  wordpress theme based websites.



I’ve been downhearted baby
ever since the day we met
our love is nothin’ but the blues
baby, how blue can you get ?

B.B. King

After the better US non-farm payroll led to dollar strength and widened US rates, the importance of US 2Y-10Y spreads shifting the USD sentiment while some market participants started to talk about a possible revival of the JPY carry trade on the back of it.

Big houses such as MS and G.Sachs already called the dip in USDJPY around 85.00-86.00 area for a long time while Nomura, despite getting stopped out in their short core USDJPY position at 90, still keeps the battle on against the ongoing momentum and see no reason to change their view that JPY will appreciate, with USDJPY reaching 83 in March 2010.

This is one of the good times where you can find a pair which can have sustainable rallies or drops on the back of fundamental&technical at the same time, and USDJPY is probably the best.

With the first paragraph of the email forming the base of a possible long-run rally, USDJPY had a nasty squeeze down to 87.37 after breaking the 55 days SMAVG at 89.75 in the first half of December, 2009. Since then, a trend-ray is formed with daily oscillators building up a strong momentum due to buy on dips price action.

A break of 91.56 in yesterday’s session and daily close above (closed at 91.83) was important to keep the strong momentum as USDJPY now targets the topside of the 8 months bearish trend channel at 92.14 on a day Japan is out and less exporter offers on the topside vs. stop-loss orders of bearish market players.

A daily close above 92.14, will confirm a break of the downside trend and give extra momentum to have a quick squeeze up to 93.50-80 level where we have 200 days SMAVG (93.79) and topside of the short term bullish channel (93.56).

As you can see the daily chart shows the momentum and the a possible break of the bearish clearly but what is more interesting is the weekly chart. In weekly chart, the topside of the channel is at 91.86 and a close above signals a very big reversal which suggests a test of the 38.2% Fibonacci retrace of the 124.13 to 84.83 drop at 99.85. I think if the trend is broken, We will be having a further rally in USDJPY which may end up testing 108.50-109.10 on the topside. ( 109.12 is 61.8% Fibonacci retrace of 124.13-84.83 drop )

I think this will be the last charting email of the year, 2009.

Wish you all the best and luck in 2010.

EURUSD close the week below the strong resistance at 1.4610 and heading down to 1.4175 ( 1.4262 low on 18/12) after a rejection of 1.5148 on the topside. While risk on/off drives XXX-JPY and S&P, EURUSD seems to be trading with different fundamentals lately on the back of structural& economic problems within  EU/US and IR differentials.

Question is : Where will EURUSD close Q1, 2010 ? at 1.2750 or 1.5750 ?

( spot ref. 1.4325 on 21/12 )

Please feel free to send over your precise levels according to your view.

S&P broke the bullish trend channel at 1112 in October, 2008 and touched to 666 in March, 2009. Since then, with global recovery theme in place, the index managed to retrace 50% of the drop and seems to be struggling break the horizontal resistance at 1114 despite a high print of 1119 this month.

Question is:  Where will S&P close Q1, 2010 ? will it be testing 1450 or 775 ?

( spot ref. 1102 on 18/12/2009 close)

Please feel free to send over your precise levels according to your view.