12 března 2010

Ken Veksler's Market Commentary

Good morning,

The week looks like it will end pretty much the way it started…. Boring and dull.
That said today does hold some event risk in the form of US retail sales, Uni. Of Michigan confidence and Euro Zone Industrial Production data.
Will the market move? Not really!
Let’s start putting everything in perspective looking at the overall macro picture and more importantly price action in the majors over the last few days.

EURUSD: This puppy is range bound and has been for some time, this clearly is not news to anyone and we all know too well that 1.3840 is the upside resistance/pivot and the key to the downside is held firmly by 1.3470/3500. So what happens in between all of that? Well Tuesday next week we have the meeting that everyone’s been waiting for a final showdown between Greece and the rest of Europe. Will they or won’t they help bail those poor Olympians out… Well truly who really cares anymore, the reality of it the only thing getting the EURUSD above 1.3840 is going to be headline rhetoric and a clean out. When and I do mean when we break 1.3840 we should clean out to around 1.4200 at a stretch and then it’s all bets off as we start the long and windy road lower, much lower. For the week I remain a seller of rallies into 1.3750 all the way into 1.3800 with stops (along with everyone else’s above 1.3840).
On the day I look for a clean out of 1.3730 stops and good offers coming in at 1.3750 but the move will be ugly at best and 40 pips is the best anyone should get out of the intraday market.

Cable: This cross is going higher and I defy any of you to tell me otherwise. I was a cautious buyer a couple of days ago and its proven to be a good trade that I’m hanging onto for the time being. Nothing has fundamentally changed and England is still in the toilet, however with big bad Gordon calling a May 6 election and this move being a corrective bounce there is still some legs left in the old dart up to 1.5230 or 50 at a stretch, anything higher is now overbought and more reason to sell strategically when you see it up there.

USDJPY: Are the Japanese…. Nothing has changed in 2 weeks, we’re range bound and I prefer selling rallies. I target 90.80 and 91.30 as the first point of strategic entry but would expect to see 92.50 print over the course of the next week at which point my grandmother goes on sales to fund my short USDJPY position.

AUDUSD: As much as it pains me to see it and admit it, this cross is going to test 0.9250, all the price action points that way and then we run out of steam and revert to the mean. I remain selling this move and catching a falling knife trying to fade the rally. Nonetheless I hold by my conviction and remain a firm seller especially with the local data starting to fade a little.

USDCAD: When everyone starts calling parity, you know it’s time to buy. As I wrote a couple of days ago this commodity move will revert and we’ll have gold and oil giving up gains which should see the USDCAD run higher into 1.0550. I continue to buy dips.

EURGBP: Snooze, I prefer to play this cross through the legs and avoid the across the ditch rivalry that is driving this cross at the moment. We all know it needs to be higher but is having a hard time getting there…

AUDNZD: And of course my beleaguered pair…. Well as I wrote the other day I now look to cut shorts on dips and start considering fresh shorts at around the 1.3100 handle looking for the AUD to slowly start retracing as per above comment.

Friends I wish you a good weekend and am officially on countdown mode till my return home next week. Fear not I’ll still be on deck for the first few days next week.

Best regards,

Ken Veksler.

11 března 2010

Ken Veksler's Market Commentary

Good morning,

Well we had the RBNZ and AUD unemployment event risks overnight come and go and my AUDNZD has suffered as a result…. The RBNZ was perhaps a little more dovish than most expected but in reality only really reiterated what the market already knew and that was that they wouldn’t move on rates until at least June of this year the only difference being that they would perhaps be a little more sluggish in the size and pace of these moves. The NZD had been very well bid all day ahead of the release and was quickly sold down on the back of the data. The Kiwi comes in a little better bid this morning but still has a fair distance to go to legitimize this trade….

On the other hand the Australian data was flat against and expectation of a 15k improvement and we saw the AUD sold off in small on the back of it. Chinese data and comments helped keep the commodity market bid and that in itself has put a floor under the AUDUSD which for now looks like it wants to test the 0.9250 level. Good offers on profit taking into 1.3120 on the AUDNZD and decent bids sitting around the 1.3020 level below. I will look to take back shorts on a dip and reevaluate on bounces higher.

Otherwise in the majors little to report outside of the Cable looking a little healthier this morning and pushing the case for more upside correction into 1.5200. I buy on dips today looking for 1.4930 to hold the downside and look to sell out of those longs around the 1.5080 level initially. The EURUSD remains range bound and the offers sitting into 1.3680 and 1.3730 look to cap the market for the time being. The equity market looks like it wants to reclaim the 1150 handle and perhaps higher and this will keep the EURUSD securely bid until the US open this afternoon.

The USDJPY has also benefited from the above story and now has its sights set on the 91.30 level at which point I will look at selling that strength all the way into 91.80. The USDCAD meanwhile looks like its forming yet another base around the 1.0230 mark and I continue to buy those dips while oil is overdone and gold is set for further retracement. I fail to believe this commodity story and maintain that this is the next bubble due to burst, so in line with that we should see commodity currencies give back recent gains on corrections.

Data wise today we have US trade balance and weekly jobs data neither of which is likely to shake the market too much as far as I’m concerned.

Best regards,

Ken Veksler.

10 března 2010

Ken Veksler's Market Commentary

Good morning,

Very quiet session overnight with only the Asian indices posting modest gains but nothing particularly substantive. The Greenback held onto its recent gains and looks to continue that way this morning. We walk in to see the EURUSD looking heavy once again and the Cable getting absolutely pasted. The AUD and Kiwi both fared well overnight although the data out of the land down under seems to be fading a little while the Kiwi terms of trade posted a significantly better result. We’ve seen eh AUDNZD come back on now is looking to test support at the 1.2950 breakout level, a host of stops sit below there but punters will be mindful of the RBNZ tonight followed by the Australian unemployment.

On the day locally I look to sell rallies in the EURUSD into 1.3600/30 and actually am (contrarian) a little bullish on the Cable ahead of the Industrial Production data out this morning.
The other crosses for the most part look tired and underdone, so little going on in the market it’s laughable and quite frankly this is possibly the worst liquidity I’ve seen since about Christmas.

So what does that mean?
Well in simple terms it means that in the USDCAD I trade options and buy two week upside in the form of a 1.0350 call for a small 53pips and if need be finance it buy selling a two week 1.0250 put.

Not much else to really say today, I think my silence speaks volumes about the state of this market, good luck out there.

Best regards,

Ken Veksler.

09 března 2010

Ken Veksler's Market Commentary

Good morning,

I truly wish I had something informative for you today but it seems like Groundhog day is upon us once again. Little overnight other than a slight reaffirmation of risk appetite in the form of better performing Asian equity indices, but irrespective of this the Greenback held onto its gains well and now we look to the equity market to see whether this move can really extend to the 1150 mark on the S&P. On the bus home last night I was surprised to see the Cable fall out of bed and pundits this morning are calling the worse RICS data as the driver for this… rubbish. This thing moved of its own accord about 6 hours shy of the data and was printing fresh lows just shy of the release. As suggested over the last few days this is likely to be a dead cat bounce and moves into the 1.5200 zone should be seen as opportunities to sell once again.

The EURUSD is frustratingly boring at the moment and the range persists with risks to the downside ever present. I am a seller on the day into 1.3700/30 and look to take it back around the 1.3550/70 area. With regard the USDCAD, those with patience will look to build strategic longs at present levels with a break above 1.3080 confirmation of further upside. However those that just want a bottom drawer trade and little to worry about should look at buying 2 week upside in the cross and (for the penny pinchers out there) selling some downside in the 1.0250 strike zone to finance it. 1.0400 2 week calls currently run at around the 40pip mark so all in all not a bad deal.

On the USDJPY, sell rallies is the call and that my friends is not going to change for the medium term. And of course my AUDNZD, well you’ve all got screens and can see where this thing is going…. Sideways for the moment with a hint of downward correction imminent. The market will now wait for Thursday night where we have AUD unemployment and the RBNZ decision….

On the data front today is a equally light as yesterday was with the exception of some UK trade data out this morning.

Good luck staying awake out there today.

Best regards,

Ken Veksler.

08 března 2010

Ken Veksler's Market Commentary

Good morning,

We will fight them on the beaches!
Well almost…. Merkel and Sarkozy lend their moral support and nothing else…. A weekend of talks and that’s all the Greeks have to show for it. The EURUSD finds a small bid tone but this is more to do with a small USD sell off rather than anything directly related to the Greek tragedy. At the end of the day the austerity package released last week and a lack of commitment from the weekend does little to quell the real trouble still facing the Euro zone and with Portugal stating that any potential austerity package they come forth with will in no way mirror that of Greece (no higher taxes, no freezes on pensions) we still sit in basically the same picture we’ve had for the last 2 weeks. That is to say that the EURUSD still faces downward pressure especially with the new major pivot of 1.3840 being anything but threatened to date.

Amongst the other majors we have Cable staging a nice recovery despite in no change on the bad news front. But ultimately what goes down must come back up and I see this as a corrective (dead cat) bounce rather than a major change in sentiment. 1.5230/50 now holds the key to any real substantive upside or more likely allows for new strategic shorts to be opened. The JPY crosses took a beating on Friday night and subsequently USDJPY and more importantly ERUJPY are both higher this morning. Risk is back (albeit temporarily) and the crosses mirror this. I remain a seller of the USDJPY and prefer not to go near the EURJPY at all at the moment.

My AUDNZD trade is now starting to look a little healthier and persistence pays off as the NZDUSD starts to pare back some gains after being heavily overdone to the downside last week. 1.2980/50 now marks an important level for this cross and with the NZD set to continue its upward correction I look for more positive gains on this trade.

Data wise its deathly quiet today and as such I think the market will look to slowly grind its way back into something more formidable for the remainder of the week rather than anything earth shattering happening today.

Best regards,

Ken Veksler.