Sunday Weekly EDGE 7-29-12

It’s an important week for key economic data and central bank activity. Here are some good articles from over the weekend and below I will also get you updated on all the key events and earnings to look forward to this week.

There has been a lot of speculation about an investment in Twitter from Apple, and here is the latest story. Personally, many have speculated that Twitter would eventually go public but there seems to be so much interest from companies that want to get in the social media space, I doubt that it will ever happen.

As we have been talking about it during the latter part of last week on the daily webinars, expectations are mounting for something spectacular from the ECB on Thursday. The market better not be disappointed.

This was a really good article that @forexlive had a link to on their website over the weekend on tackling rising yields in the Eurozone.

www.alsosprachanalyst.com has a good post up with Goldman’s views of what the ECB “could do.”

Here is an article from Reuters about “Eurozone’s September Crunch.”

And of course, in honor of the Olympics in London (that has dominated my TV the couple days) here is a great tool to help you know what events are happening and when (for those of you in the U.S.A.).

Economic data this week will hot an heavy and if you thought last week was “volatile” this week could end up being one of the most active this summer. We start off the week with Spanish GDP tomorrow morning then later Monday evening NZD Business Confidence and AUD Building Approvals. Tuesday Morning we have CAD GDP, CB Consumer Confidence in the US and later that night China Manufacturing PMI (with expected reading above the expansionary line at 50.4). Wednesday Spanish and GBP Manufacturing PMI, US ADP Non-Farm Employment Change, ISM Manufacturing PMI and then the FOMC Statement. Later Wednesday night AUD Retail Sales and Trade Balance. Thursday CHF has Retail Sales, GBP Construction PMI, then the BOE has their rate decision, followed by the ECB’s and then the highly anticipated press conference from Mario Draghi. In the US we will have weekly Unemployment Claims. Friday GBP Services PMI followed by the ever popular (and now closely watched by the Fed) US Non-Farm Payrolls and Unemployment Rate. Then followed by the Non-Manufacturing PMI.

We are in full fledge earning’s season and I will not list every company reporting, but here are some highlights: Monday we have L and EMN. Tuesday we have TYC, AET, XRAY, ALL and COH. Wednesday is FSLR, HOG, MA and TWX. Thursday is AIG, CAH, DUK and CI. Friday wraps up the week with PG and NYX.

Lastly, most of you know that my team and I broadcast daily from 6AM ET through the NY stock market close. To access our live webinars daily (which are free, and our live in the market analysis has been for nearly 9 years now) just click on this link. Make sure you follow me on Twitter or Stocktwits @pipczar for my thoughts as the FX market opens this evening.

Here are some charts for you to look at that could impact the market next week:

I thought I would start off with the AUD/JPY which is probing a 78% retracement level and previous support. This is huge since the equity markets and risk assets typically follow the AUD/JPY’s lead. (e-mini futures are the blue line chart)

AUD/USD challenging channel resistance.

USD index daily which is probing a pretty strong daily trend line.

EUR/USD descending wedge (bullish reversal pattern if above 1.2400)

Gold has some upside on the weekly, but it is hard to get “too bearish the USD” while gold is in this wedge.

Frankly, copper looks very heavy in comparison to equities (look below)

ES’s really probing some key resistance here and looks bullish up to 1400.

 

You don’t want to be short the US Dollar if….

Whenever major breakout levels are being “pushed” in the market it is important to know the ramifications “if” those levels are broken.

This week (and quite possibly today) we are probing some major levels in Gold, Silver and Copper. Most of you know the strong inverse relationship to gold/silver and the US dollar. As for copper, it has a direct correlation to global growth, so if it is going down the US dollar is probably going to get bid up on “risk aversion.”

Here are the charts, and you can draw your own conclusions:

Daily Gold triangle with key support at 1558 and weekly support at 1525

Gold Weekly bearish wedge

Silver Weekly bearish wedge

Copper Weekly support, longer term H&S pattern. 3.27 key support

GLD/UUP correlation. Like I said, you can draw your own conclusions.

 

You can follow me @PipCzar on StockTwits or Twitter

Disclaimer: I am short Silver and I am pretty sure I will be long the USD a few times today

Sunday Weekly EDGE 7-15-12

There is a lot of good reading over the weekend, and here are some highlights that I have been reading:

Visa and Mastercard have agreed to a 7.25B swipe fee settlement that has been making the news over the weekend. It’s a must read story that could hit every one of us as consumers here in the United States. So, before turning all those coins in and rendering them “useless,” read on.

Here is Reuters article on the housing market. The debate is a recovery or lost decade?

Greek people favor a renegotiation of terms, even if it puts them at risk of a Euro exit, a recent poll showed.

Here is an article in the Telegraph outlining the steps China are taking to attempt to reverse the slower growth trends we are seeing.

Since I am a little bias (I have short Australian dollar exposure at the moment) here is a CNBC article that shares the same view I have had for the last year.

Lastly, unless you have been living under a rock recently, you may have missed the soaring price of corn which may send ripples through both the financial markets and your pocketbook for months to come.

Economic data this week will be moderate with CPI and retail sales the dominating theme. Monday US will release the most recent Retail Sales data, then later that evening CPI out of NZD and Monetary Policy Meeting Minutes out of AUD. Tuesday GBP has CPI coming out, then EUR releases German ZEW Sentiment, then the UK’s BOE will release Inflation Letter, US will have CPI then the CAD’s BOC will have their Interest Rate Decision. And then all eye’s turn to Bernanke as he starts his two day semi annual testimony and at that same time will be the BOC press conference on Wednesday. Thursday GBP has Retail Sales, US has weekly Unemployment Claims, Existing Home Sales and Philly Fed. Friday CAD has CPI as well.

We are in full fledged earnings season and I will not list every company reporting, but here are some highlights for the week: Monday we have C, Tuesday is INTC, KO, WYNN, FRX, STT and CMA. Wednesday is AXP, QCOM, BAC, XLNX and HON. Thursday is AMD, SNDK, COF and BAX. Friday is GE, STI, BHI, XRX and SLB.

Lastly, most of you know that my team and I broadcast daily from 6AM ET through the NY stock market close. To access our live webinars daily (which are free) just click on this link. Make sure you follow me on Twitter or Stocktwits @pipczar

E-Mini futures with daily triangle in play

AUD/USD back testing the broken trend line, 1.0260/70 will be key

Possible inverted H&S on Crude

Daily Triangle in Copper

Gold with Daily Triangle just above key support at 1525

Citigroup approaching key daily trend line resistance

BofA bounced off key support at the daily 61.8% support

AXP is sitting on some key support as well

Antipodean Currencies on Red Alert – AUD & NZD

The reason for this blog entry is simple: The AUD and NZD may be on the cusp of having a serious break down across the board. There is one specific currency I am 1) currently long 2) am looking to add to my position.

The EUR/AUD is on my “hit list” today and here is the main reason why: As the market’s focus shifts from the European debt crisis to the weak fundamental data streaming in from China. Australia may take center stage as the market’s whipping boy, and this specific pair looks poised for a recovery.

In the past I have had great success and some failures with this pair. Twice last year I rode the pair from the low 1.30’s to the high 1.30’s and towards the end of the year I took some losses as the pair dropped below 1.3000 when I  was anticipating some risk aversion in the markets. A month or two back I had the pair on my watch list for a possible reversal and actually took some small losses trying to get long, but technically it didn’t hold above the 200 day SMA and as the situation in Greece, Italy and Spain worsened in the last several months the pair fell to new all time lows. Now I think this is the time I am looking for (and trading currently) a big reversal off these historically low levels. Here are the charts and my argument:

On the daily chart, we are a stone’s throw away from trend line (lower) support and 127% Fibonacci extension.

On closer inspection of the daily chart, the candle pattern is a (borderline) bullish engulfing pattern (reversal signal during a bearish/bullish trend) with a broken higher RSI.

The 4 hour chart shows a broken trend line and an attempt to post higher highs. If we do make a stab lower and produce a “higher low” the near term bearish trend may be reversed.

Make sure you follow me @pipczar on StockTwits or Twitter

 

Disclaimer: I did get long the EUR/AUD post AUD jobs report last night, I have added to my long earlier this morning AND I am looking to add more dependent on the daily close today.

Sunday Weekly EDGE 7-8-12

Some weekend reading for you as we await the market open in the FX markets later today:

Nobel Prize winning economist, Paul Krugman, and his most recent blog on the ECB.

Here is a Bloomberg article on the recession risks the Eurozone faces, says S&P.

China vows to “prevent a rebound” in housing prices says Premier Wen Jiabao. (Personally, I think they are still trying to cool prices moderately….but hey, that is just me)

HSBC says the focus towards the end of 2012 will shift from the Eurozone crisis to the “fiscal cliff” crisis. I couldn’t agree more.

Economic data that may have a high impact to the market this week will be pretty light but there are some economic events that are worth noting. Tonight, China will release CPI which economists are looking for a lower reading from last month’s 3% to 2.4% this month. Tomorrow the Bank of Canada will release its Business Outlook Survey. Sometime early Tuesday China will release trade balance, and GBP will release Manufacturing Production. Wednesday US and CAD will release trade balance, and later that evening we have AUD jobs report as well as the JPY rate decision. Thursday China GDP and then to round out the week in the US we will have PPI.

Company earning’s kick off this week for the 3rd quarter with AA first up on Monday, MAR on Wednesday, FAST on Thursday, and the earnings highlights of the week are WFC and JPM on Friday. Check out the charts below as I focus on AA and JPM.

Lastly, most of you know that my team and I broadcast daily from 6AM ET through the NY stock market close. To access our live webinars daily (which are free, and our live in the market analysis has been for nearly 9 years now) just click on this link. Make sure you follow me on Twitter or Stocktwits @pipczar for my thoughts as the FX market opens this evening

Weekly Copper chart with the neckline of the longer term H&S coming back into play.

$DX_F weekly chart with the cup and handle formation still in play with major resistance being probed.

Notice the weekly chart of the e-mini’s that we closed below the 61.8 Fibonacci retracement level (noted in red).

Even though the $EURUSD closed above trend lows (barely) at the 1.2287 level, if the EUR does not get a bounce at this week’s open it could expose a lot of downside. See last week’s post for longer term outlook on the EUR.

I put up the $SPX next to $AA and you can see how the stock has underperformed the broad market. With the slowdown in China and other emerging market economies, longs better be careful should we breach 8.00 and post multi year lows. I often say on my webinars “what does not go up….”

$JPM stalled at the 38.2% Fib level which slants the odds higher to a continuation move lower below new trend lows. Daily supports at 33.20 and 32.16 this week.

Disclaimer: I do have some long USD exposure and may look to add to those positions early this next week.

 

EUR/USD set for a move below 1.2000?

Technically speaking, the EUR/USD looks set to push below 1.2000 and eventually to 1.17-1.1800 as the longer term trend takes hold.

 

The pair drove below the lower trend line at 1.2450 today that we had been following for over a week. Although the apex of the triangle didn’t form as long (in time) as I would typically liked prior to a breakout, the move looks like it is starting.

Tomorrow’s non Farm Payroll will be extra important to USD bulls. If the US labor market can create more than 100K jobs and keep the unemployment steady we could get a push to new trend lows below 1.2289 as early as tomorrow morning.

Disclaimer: I have no position in the EUR/USD, however I may trade tomorrow post NFP