British Pound Posts Strong Rally after Testing 50% Level
USD CHF Posts Daily Closing Price Bottom; Likely Position Squaring ahead of NFP Report
Profit-taking and position squaring ahead of Friday’s U.S. Non-Farm Payrolls Report helped form a daily closing price reversal bottom in the USD CHF on Thursday.
This could be something minor or it could be the start of an overdue correction. It all depends on how traders read Friday’s U.S. employment report.
BoE’s Posen Calls for More QE; British Pound Posts Reversal Top
The GBP USD fell sharply on Tuesday, triggered by negative comments from Bank of England’s Adam Posen regarding more quantitative easing. Posen said that more QE is going to be needed in order to lead the UK economy to full recovery. Posen suggested that further fiscal stimulus and corporate debt buying might be needed if this round of QE is not enough.
Euro Posts Reversal Top after Irish Bank Downgrade
December Gold posted a weekly closing price reversal top, indicating the possible start of a substantial decline. This type of pattern typically indicates the start of a 2 to 3 week break equal to at least 50% of the last rally. This makes $1212.00 the next likely downside target.
Dollar/Yen Posts Reversal Bottom; Short-Term Rally Imminent
The U.S. dollar trimmed a little of its losses late Wednesday after the Federal Reserve's Beige Book cited a slowing economy and limited inflation pressure. Most of the damage to the Dollar was done earlier in the session, however, following a strong Portugal Bond sale and amid better news out of Canada and the U.K. Greater demand for riskier assets as evidenced by the strong rise in U.S.
December Treasury Bonds posted the rare daily/weekly closing price reversal top this week. On Wednesday, the T-Bonds formed a daily closing price reversal top and on Friday, the market sold off far enough to form a weekly closing price reversal top. Both of these chart patterns suggest that the selling is greater than the buying at current levels.
December Gold posted a closing price reversal top on Thursday after an attempted breakout to the upside failed to attract strong buyers. You can’t really blame the slightly better than expected U.S. Weekly Initial Claims report for putting in the top, but this news did contribute to the day-long decline as sentiment shifted away from risk aversion.
Dollar/Yen Posts Weekly Reversal Bottom; Is Intervention Imminent?
The U.S. Dollar finished the week sharply higher after posting gains against all the major currencies. The catalyst behind this week’s strength was the action by the Fed to stabilize its balance sheet by shifting assets from mortgages to long-term debt. This sent a signal to already worried investors that the Fed was making room for the possibility of a prolonged downturn in the U.S. economy.
September S&P Posts Reversal Bottom on Increased Demand for Risk
The September S&P 500 posted a closing price reversal bottom after investors turned up demand for higher risk assets. Oversold conditions and a weak U.S. economy helped to boost equity markets throughout the day after a strong showing in Asia and Europe overnight boosted demand for risk. This bullishness was clearly in the U.S. markets on the opening. Later in the morning the U.S.