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.

 

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About Blake Morrow

Blake Morrow is the Chief Currency Strategist for Wizetrade. Blake has over 15 years of trading experience and has been a co- owner of a Dallas based brokerage firm and LiquidTrader Technologies. Currently, Blake does analysis daily for thousands on individual traders, also has appeared as a regular analyst on WizetradeTV, Traders Television and MBT Vision. Blake has also managed 6 figure trading accounts and is a seasoned individual investor in equities and FOREX.