Tuesday, October 19, 2010

10/19 Forex

  • The headline is: Stronger Dollar. News reports call it a flight to safety after China raises of an important interest rate.
  • Euro, cable, Australian dollar, New Zealand dollar, to bear phase in trading against the U.S. dollar (EUR/USD, GBP/USD, AUD/USD, NZD/USD).
  • U.S. dollar bull phase against the Canadian dollar is back after a day of ghosting (USD/CAD).
  • U.S. dollar also moves to bull phase against the Swiss franc (USD/CHF).
  • Australian dollar turns bearish against the yen (AUD/JPY).
  • U.S. dollar showed bull phase against the Mexican peso, but it ghosted away, leaving the pair in bear phase (USD/MXNf).

ppspps openupper pivotlower pivot
EUR/USD US$1.38 US$1.39 oct19 US$1.40 US$1.30
AUD/USD US$0.97 US$1.01 oct19 US$1.00 US$0.91
USD/CAD C$1.03 C$1.01 oct18 C$1.06 C$1.02
USD/JPY ¥82 ¥85.08 sep22 ¥85 ¥82
GBP/CHF C$1.53 C$1.56 sep21 C$1.58 C$1.52
GBP/USD US$1.57 US$1.59 oct19 US$1.60 US$1.54
EUR/JPY ¥113 ¥107.82 sep14 ¥117 ¥108
AUD/JPY ¥80 ¥80 oct19 ¥83 ¥77
USD/CHFSF0.97 SF0.96 oct19 SF1.02 SF0.96
NZD/USD US$0.75 US$0.75 sep US$0.75 US$0.72
USD/MXN M$12.47 M$13.07 sep2 M$13.06 M$12.28

There are many signals this morning so I'll keep the write-ups brief. The overall theme is the dollar strengthens broadly against all major currencies, which translates to bear phase on m ost pairs.

EUR/USD, bear: Price drops below the upper weekly pivot, prior bull phase lasted 26 U.S. market days for a 9.6% price rise.

AUD/USD, bear: Price below the upper pivot, prior bull phase lasted 37 market days for an 11.6% price rise.

USD/CAD, bull: See the write-up in Monday's Forex.

GBP/USD, bear: Below upper pivot, prior bull phase lasted three market days for a 0.2% price decline -- basically, a wash. GBP/USD has whipsawed four times in eight U.S. market days. I'd be nervous about trading this until I see a trend established.

USD/CHF, bull: Price has pierced the lower pivot, rising strongly toward the midline. The prior bear phase lasted 20 market days for a 4.5% price decline.

NZD/USD, bear: Price today is straddling the upper pivot level. Prior bull phase lasted 20 market days for a 3.3% price rise.

AUD/JPY, bear: Not a dollar trade! Price dropping to near the midline, prior bull phase lasted 14 market days for 0.9% price decline. Not a pair I would trade at this point until a downtrend is more clarly established.

The analysis uses the daily Person's Proprietary Signal, developed by John Person, and the monthly Person's Pivot, which he also developed.

These are black box signals -- the "proprietary" means that Mr. Person knows how they work under the hood, and I don't. But they have shown a fair degree of success in identifying good entry and exit points, and I find them useful.

On the glance, "pps open" means the price at the start of trading in the United States on the day the signal appeared.

I also refer to the Heikin-Ashia trend or candlestick. The Heikin-Ashi averages six days for high, low, open and close, signalling uptrend if the close is in the upper half of the range and downtrend if it is in the lower half. The signal for opening and closing positions require confirmation through a turn in the 8-day exponential moving average.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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