18May to 22 May

Last week movement had be rather choppy and unclear.
But the report that came out rather define a certain direction on those major currency

EUR
Eur outlook doesn't seems to be good due to poorer then expected GDP and interested rate cuts.
This week there isnt much report coming out one EUR.
Furthermore Eur wasnt able to break the high on 09/03/2009 of 1.3737. Could this be a sign of downtrend..? I believe that the weight of the GDP report will carry over to this week.
There could be a possibility that EUR/USD is heading back to the 1.25 region.. or going back to the 13800 1.4 region.. This i believe would have to depend on USD strength

GBP
GBP/USD had been really choppy last week. Fundamentally i feel that GBP is still in a load of problems. This week, lots of report coming would sure spark high volatility in GBP pairs.

TUE May 19
GMT 830
GBP consumer price Index (MoM) Expected 2.4% previous 2.9%
GBP consumer price Index (YoY) Expected 1.6% previous 1.7%

Retail price that release same time may affect the market too

Wed May 20
GMT 830
GBP Bank of England Minutes

Fri May 22
GMT 830
GBP Gross Domestic Product (QoQ) Expected -1.9% Previous -1.9%
GBP Gross Domestic Product (YoY) Expected -4.1% Previous -4.1%

I dont the the GBP will be expected values. Be sure to see big big movement if the actual result is different from the expected.

USD
Last week the worst then expected retail result had created doubt on the recovering status of US economy. People are debating the position of the safe heaven curreny for USD. Not much economical data will be releasing next week, but lots of meeting and speach by big man!
I guess the most interesting one would be on
Wed May 20
GMT 1800 USD Federal Open Market Committee Meeting Minutes

This week, usd should have a one sided movement, either up or down.

AUD and NZD
Both currency are droping for the pass 2 weeks. Could this be a sign of a top on both currency?
Fundamentally, aud seems to be recover way better then other currency. As for NZD, it doesnt look good.

Head and shoulders USD/JYP

This is the 1D daily chart of USD JYP. According the the release of the COT, a reserval could be on sight..
USD COT index is 0, so either it will remain flat of a reserval toward bullish is going to happen
As for JYP , the index remain 50 same as last week.

The formation could turn into a 5 wave triangle, the strategy is wait for this breakout which should be happening within these few days

The COT Index is the percentile of the difference between net speculative positioning and net commercial positioning measured over a specific number of weeks (either 52 or 13). A reading close to 0 suggests that a bottom is forming and a reading close to 100 suggests that a top is forming. The readings are for the actual currency, not the currency pair. For example, a reading of 100 on the Canadian Dollar suggests that the Canadian Dollar is close to a top (USDCAD close to a bottom).

Readings of 95 and higher as well as 5 and lower are in boldfaced red type to indicate potential market extremes. For example, an increasing index is bullish until the index is extreme (near 100), at which time the risk of a reversal or pause in the trend increases.

Base on the COT, we could look for reserval on

AUD/USD bullish turn bearish
GBP/USD bullish turn bearish
NZD/USD bullish turn bearish
EUR/USD bullish turn bearish

USD/CAD bearish turn bullish
USD/CHF bearish turn bullish

USD/JYP Mix

BIG event 11/05/09 - 15/05/09

Mon 11 May
GMT
2330
USD Bernanke speaks on Stress Tests at Jekyll Island, Georgia

What this guys comment on the Stress test is going to affect the market... Likely he will say some positive information, and further increase the risk sentiment on the decline of USD and

Tue 12 May
GMT Expected Previous
0600
EUR German Consumer Price index(MOM) 0.0% -0.1%
EUR German Consumer Price index(YOY) 0.7% 0.5
EUR German Consumer Price index- EU 0.0% -0.1%
Harmonised (MOM)

0600
EUR German Consumer Price index- EU 0.0% -0.1%
Harmonised (YOY)

0830
GBP Visible Trade Balance -£7200 -£7315
GBP Total Trade Balance -£3000 -£3248
GBP Total Trade Balance Non EU -£4200 -£3964

1230 USD Trade Balance -$29.2B -$26.0B

2350 JYP Trade Balance - BOP Basis ¥137.1B ¥202.1B

Wed 13 May
GMT Expected Previous
0830
GBP Claimant Count Rate 4.7% 4.5%
GBP Jobless Claims Changes 85K 73.7K
GBP ILO Unemployment Rate 6.9% 6.7%

1230
USD Advance Retail Sales 0.0% -1.2%
USD Retail Sales less auto 0.0% -1.0%

Thurs 14 May
GMT Expected Previous
1230 USD Producer Price index(MoM) 0.1% -1.2%
USD Producer Price index(YoY) -3.9% -3.5%
USD Producer Price index EX Food & 0.1% 0.0%
Energy (MoM)
USD Producer Price index EX Food & 3.4% 3.8%
Energy (YoY)
USD initial Jobless Claims 601k
USD Continuing Claims 6351k

2245
NZD Retail Sales 0.2%
NZD Retail Sales Ex-Auto -0.1%

Friday 15 May
GMT Expected Previous
0600
EUR German Gross Domestic Product s.a (QoQ)(1QP) -3.0% -2.1%
EUR German Gross Domestic Product w.d.a (YoY)(1QP) -6.0% -1.7%
EUR German Gross Domestic Product n.s.a (YoY)(1QP) -6.2% -1.6%

0900
EUR Euro-Zone Gross Dosmestic Product s.a (QoQ)(1QA) -2.1% -1.6%
EUR Euro-Zone Gross Dosmestic Product s.a (YoY)(1QA) -4.1% -1.5%
EUR Euro-Zone Consumer Price Index (MoM) 0.4% 0.4%
EUR Euro-Zone Consumer Price Index (YoY) 0.6% 0.6%
EUR Euro-Zone Consumer Price Index-core (YoY) 1.6% 1.5%

1230
USD Consumer Price Index (MoM) 0.0% -0.1%
USD Consumer Price Index (YoY) -0.6% -0.4%
USD Consumer Price Index Ex food & energy(YoY) 0.1% 0.2%
USD Consumer Price Index Ex food & energy(YoY) 1.8% 1.8%

EUR/GBP

Look at the 4h chart:

We can see a downtrend triangle formation form.

EP=0.8859 SL=0.8968 TP=0.8641 TS=100

Look at the 4hour chart:

We can see that over the pass week of uptrend, we can see the volatility had been decreasing forming a triangle formation.
Nice breakout will form and there is a possibilty that this downtrend will hit 1.3125 before deciding the next direction.

EP=1.3281 TP=1.3038 SL=1.3402 TS=120

Update on my trades

Current Trade..

EUR/GBP
EP= 0.8859 SL=0.8968 TP=0.8641 TS=100

EUR/JYP
EP=131.80 SL=131.00 TP=127.63 TS=130
Confirm profit of 80 pips

EUR/USD
EP=1.3281 SL=1.3402 TP=1.3038 TS=120

The only mistake here is that i should not expose so much of my capital on EUR alone....

Nice breakout from the triangle. Due to the stress test and ECB rate cuts on Thursday May 7, trader risk appitide since to have change. Even thought many analysis had been specualting that the crisis had bottom, personally i do not agree with what they say.

I believe that there wouldnt be much movement til May7 when the banks interest rate cut decision and Bank stress test are release...

EUR/JYP triangle formation

Look at the 1 hour chart of EUR/JYP

Look like a triangle formation is form...
Actually i favor bearish of EUR This could be a opportunity for the correction of the previous gain.
Remember to wait for another hour candle then enter the trade.. to confirm a downtrend breakout instead of a false break out...

EP = 131.80 TP = 127.63 SL= 132.50 or 132.80 TS=70-100

Strategy for the week

Base on COT direction:

Long Short
JYP 54,7% GBP 69.65%
EUR 51%
NZD 80.1%
AUD 68.4%
USD 81.3%

Looking for :
EUR/USD bearish
GBP/USD strong bearish
AUD/USD bearish
NZD/USD Flat
EUR/JYP Flat
GBP/JYP bearish
USD/JYP bullish

EUR/USD
Base on the market sentiment from the COT report, we are looking at a bearish outlook for EUR.
For this week, the major news that would impact this currency pair are:
- Release of the result for the Bank stress test
- looks goods but personally i feel there must be a reason for delaying the release of the report.
- Tue May 5 GMT 1400 USD ISM Non-manufacturing Composite
- Increase ...
- Thu May 7 GMT 1145 EUR ECB rate decision
- there could be a interest rate cut to 1%
- Fri May 8 GMT 1230 USD Non-farm payroll
- expect to be better then last month

In terms of Fundamental analysis, the outlook of USD is bullish and due to the interest rate cut, EUR is in line of a bearish outlook.

In terms of techinical analysis, the outlook for EUR/USD remain the same.


Last week correction wasnt able to break throught the 61.8% fibonacci correction.
I suggest to sell at
EP = 1.3235 SL = 1.3400 TP = 1.2905 TS = 150

EUR/JYP
The COT report suggest a flat market. Base on fundamental analysis, EUR is suffering from the worst economic crisis. And highly possible that ECB would cut rates. I suggest wait for clearer signal of down trend...


GBP/USD
The COT suggest a bearish structure on this pairing. But fundamentally, GBP does not have a bearish outlook.

Techincally:


A flat could be forming in the D1 chart. i suggest wait for a clearer sign before entering this pair.
If a 5 wave downtrend is building up, wait for the correction of the 2nd wave before selling this pair...

GBP/JYP

Had build up a triangle formation:


This is the one hour chart. The triangle formation was from after ytd flat movement.
Currently it looks like going to a downtrend.
I suggest:
Sell stop:
EP = 147.77 SL = 148.55 TS = 80 TP = 142.92 (fibonacci correction of 61.8)

Big events next week

TUE May 5th GMT 430 Expected Previous
AUD Reserve Bank of Australia Rate Decision 3.00% 3.00%

Wed May 6th GMT 2245 Expected Previous
NZD Unemployment Rate 5.3% 4.7%

Thu May 7th Expected Previous
GMT 1100 GBP Bank of england Rate Decision 0.5% 0.5%

GMT 1145 EUR ECB Rate Decision 1.00% 1.25%

GMT 1230 USD Non-farm Productivity 0.9% -0.4%

Fri May 8th
GMT 1230 USD Change in NonFarm Payroll -620k -660k
GMT 1230 USD Unemployment Rate 8.9% 8.5%

COT STATUS as of 28/04/09

We can somehow get the market sentiment throught the COT report.

BRITISH POUND STERLING - CHICAGO MERCANTILE EXCHANGE                 Code-096742
FUTURES ONLY POSITIONS AS OF 04/28/09                         |
--------------------------------------------------------------| NONREPORTABLE
   NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG  | SHORT  |SPREADS |  LONG  | SHORT  |  LONG  | SHORT  |  LONG  | SHORT
--------------------------------------------------------------------------------
(CONTRACTS OF GBP 62,500)                            OPEN INTEREST:       84,760
COMMITMENTS
17,702   40,615        8   55,752   23,022   73,462   63,645   11,298   21,115

CHANGES FROM 04/21/09 (CHANGE IN OPEN INTEREST:      1,381)
2,088      841      -27     -239     -802    1,822       12     -441    1,369

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
 20.9     47.9      0.0     65.8     27.2     86.7     75.1     13.3     24.9

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:       56)
   12       21        1       15       15       28       36

The market favors Short in GBP:
Non-Commercial standing .. 17,702 long - 40,615 short = 22,913 short
Percent of 40,615/(17,702+40,615) = 69.65% short

JAPANESE YEN - CHICAGO MERCANTILE EXCHANGE                           Code-097741
FUTURES ONLY POSITIONS AS OF 04/28/09                         |
--------------------------------------------------------------| NONREPORTABLE
   NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG  | SHORT  |SPREADS |  LONG  | SHORT  |  LONG  | SHORT  |  LONG  | SHORT
--------------------------------------------------------------------------------
(CONTRACTS OF JPY 12,500,000)                        OPEN INTEREST:       75,734
COMMITMENTS
22,162   26,741      239   36,138   28,240   58,539   55,220   17,195   20,514

CHANGES FROM 04/21/09 (CHANGE IN OPEN INTEREST:      1,519)
3,819   -5,297       25   -3,891    8,233      -47    2,961    1,566   -1,442

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
 29.3     35.3      0.3     47.7     37.3     77.3     72.9     22.7     27.1

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:       69)
   19       26        7       17       16       42       43

The market favors Long in JYP:
Non-Commercial standing .. 22,162 long - 26,741 short = 4579 short
Percent of 26,741/(22,162+26,741) = 54.7% long

EURO FX - CHICAGO MERCANTILE EXCHANGE                                Code-099741
FUTURES ONLY POSITIONS AS OF 04/28/09                         |
--------------------------------------------------------------| NONREPORTABLE
   NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG  | SHORT  |SPREADS |  LONG  | SHORT  |  LONG  | SHORT  |  LONG  | SHORT
--------------------------------------------------------------------------------
(CONTRACTS OF EUR 125,000)                           OPEN INTEREST:      108,592
COMMITMENTS
30,292   32,365      256   43,424   41,730   73,972   74,351   34,620   34,241

CHANGES FROM 04/21/09 (CHANGE IN OPEN INTEREST:      1,913)
  584    4,254     -378    1,850   -4,379    2,056     -503     -143    2,416

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
 27.9     29.8      0.2     40.0     38.4     68.1     68.5     31.9     31.5

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:       98)
   34       29        7       21       24       58       57

The market favors Long in EURO:
Non-Commercial standing .. 30,292long - 32,365 short = 1694 long
Percent of 32,365/(30,292+32,365) = 51% long

NEW ZEALAND DOLLAR - CHICAGO MERCANTILE EXCHANGE                     Code-112741
FUTURES ONLY POSITIONS AS OF 04/28/09                         |
--------------------------------------------------------------| NONREPORTABLE
   NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG  | SHORT  |SPREADS |  LONG  | SHORT  |  LONG  | SHORT  |  LONG  | SHORT
--------------------------------------------------------------------------------
(CONTRACTS OF NZD 100,000)                           OPEN INTEREST:       14,095
COMMITMENTS
4,855    1,207        0    7,800   11,299   12,655   12,506    1,440    1,589

CHANGES FROM 04/21/09 (CHANGE IN OPEN INTEREST:        252)
  317      174        0     -361      169      -44      343      296      -91

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
 34.4      8.6      0.0     55.3     80.2     89.8     88.7     10.2     11.3

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:       22)
    8        3        0        6        6       14        9

The market favors short in NZD:
Non-Commercial standing .. 4,855 long - 1,207 short = 3648 long
Percent of 4,855/(4,855+1,207) = 80.1% long

AUSTRALIAN DOLLAR - CHICAGO MERCANTILE EXCHANGE                      Code-232741
FUTURES ONLY POSITIONS AS OF 04/28/09                         |
--------------------------------------------------------------| NONREPORTABLE
   NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG  | SHORT  |SPREADS |  LONG  | SHORT  |  LONG  | SHORT  |  LONG  | SHORT
--------------------------------------------------------------------------------
(CONTRACTS OF AUD 100,000)                           OPEN INTEREST:       69,683
COMMITMENTS
25,748    9,056       82   24,159   52,272   49,989   61,410   19,694    8,273

CHANGES FROM 04/21/09 (CHANGE IN OPEN INTEREST:        115)
  -92      466      -57    1,076      340      927      749     -812     -634

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
 37.0     13.0      0.1     34.7     75.0     71.7     88.1     28.3     11.9

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:       50)
   21        8        2       12       13       34       22

The market favors short in AUD:
Non-Commercial standing .. 25,748 long - 9,056 short = 16,692 long
Percent of 52,272/(24,159+52,272) = 68.4% long

U.S. DOLLAR INDEX - ICE FUTURES U.S.                                 Code-098662
FUTURES ONLY POSITIONS AS OF 04/28/09                         |
--------------------------------------------------------------| NONREPORTABLE
   NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG  | SHORT  |SPREADS |  LONG  | SHORT  |  LONG  | SHORT  |  LONG  | SHORT
--------------------------------------------------------------------------------
(U.S. DOLLAR INDEX X $1000)                          OPEN INTEREST:       22,223
COMMITMENTS
11,700    2,694    2,013    6,791   14,869   20,504   19,576    1,719    2,647

CHANGES FROM 04/21/09 (CHANGE IN OPEN INTEREST:     -1,108)
-1,601      -51      -77    1,341   -1,292     -337   -1,420     -771      312

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
 52.6     12.1      9.1     30.6     66.9     92.3     88.1      7.7     11.9

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:       55)
   25       19        5        8        5       34       28

The market favors short in USD:
Non-Commercial standing .. 11,700 long - 2,694 short = 9006 long
Percent of 11,700/(11,700+2,694) = 81.3% long