Sunday Weekly EDGE 10-7-12

As most of you know, this week kicks off the traditional earning season with AA on Tuesday. For us FX traders, we will of course be paying attention to some off the bellwethers (listed below) to help us understand if the market is going to take more of a “Risk on” or Risk off” tone.

Before we get into that, I thought I would share with you some of the articles I had read over the weekend:

As many of you know, former CEO of GE got a lot of attention on Friday with his tweet regarding the Friday jobs data. Regardless of your belief, here is a good article in Bloomberg summing it up.

If you have listened to my daily broadcasts over the recent years, you already know one of my reasons for a base argument for a stronger USD is not because I think that the Federal Reserve is going to raise rates anytime soon, but I have long believed that most central backs would continue to cut rates or extend their loose monetary policies. Here is an article on how we could expect the Bank of England to keep expanding theirs.

Here is an article from Reuters explaining how the German Chancellors visit could be into hostile territory (Greece) this week.

The FT explains here that the US economy is a “bright spot” in the global economy, but also explains the world’s economy may be “on the ropes.”

Maybe China markets will have a “Golden Week” of trading after “Golden Week?”

Since I have a lot of Iranian listeners on my daily broadcast, I thought I would share this link from Pragmatic Capitalism on some numbers from Iran’s hyperinflation.

On the calendar this week we have CHF CPI tomorrow morning and Euro group meetings going on all day, NZD Business Confidence later that night. Tuesday ECB’c Draghi is testifying on Brussels, and GBP Manufacturing Production will be released. Wednesday AUD Employment Data will be released and G7 meetings will be all day. Thursday US and CAD will have Trade Balance and the US will have Weekly Unemployment Claims. Friday US has PPI.

Earnings kick off this week with AA and YUM on Tuesday. COST on Wednesday. FAST and SWY on Thursday. Then Friday WFC and JPM finish off the week. Obviously there are more companies releasing earning, those are just some of the highlights.

Lastly, most of you know that my team and I broadcast daily from 7AM 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 10 years now) just click on this link.

Here are some charts and notes on what I am seeing currently:

E-mini 4 hour chart and you can see trend line support and a 61.8 Fibonacci retracement level at 1440. As long as we trade above there, the markets should retain a bullish tone.

Gold is challenging a daily trend line currently, and also is trading around the daily 61.8 Fib level (red) from the 9-2011 highs to the 12-2011 lows (not shown).

Copper posted a lower weekly high as seen close up on the daily chart.

EUR/USD is very well supported at the 200 day SMA and it is also starting to turn up.

AUD/USD sitting on key support here and if we break below 1.0150 (or so) a double top will trigger pushing us down to triangle support around .9800.

Notice how AA is “boxed” between the 50 and 200 SMA’s?

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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.