Forex Market Commentary for October 26, 2006

Daily Forex Market Commentary
The dollar fell more than expected on Wednesday after rebounding two days earlier. With the US elections two weeks away and the economy in reasonably good shape, but bound to weaken, the Fed left rates unchanged. The technical rally in oil and the high levels in the Dow are a tad worrisome at this point. The dollar should trade mixed to lower today.


Euro/dollar
Euro/dollar recovered Monday's losses but let's see how much higher it can get today.
Initial resistance is at 1.2650. Above this level, resistance is seen at 1.2710. Strong resistance is then seen at 1.2765, but the pair should not challenge it.
Immediate support is at 1.2685. If 1.2520 breaks, then expect the euro/dollar to challenge 1.2490. That could lead to a test of the pivotal low at 1.2460.
Oscillators are declining.

NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen marched fell on Tuesday after failing to even approach 120.
Below 118.75, dollar/yen has support at 118.25 by another 50-point pivot that targets 117.75 and 118.75. Distant support is at 116.85 by a 50-point pivot, which targets 116.35 and 117.35

Strong resistance remains at 119.65 from a 50-point pivot that targets 119.15 and 120.15. If the defense of the KO options at 120 is somehow surpassed, expect heavy hunting for stop-loss orders. Above 120.15, resistance is seen at 120.50.
Oscillators are rising.

NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish

Sterling/dollar

Sterling/dollar advanced on Wednesday and recovereed more of the Monday's loses. The upside lookks fairly limited.

Above 1.8800 there is a pitotal level at 1.8858.. Further resistance is seen at 1.8890.
Immediate support is at 1.8745. Further supportis at 1.8673. That is followed by 1.8660 and 1.8605. Distant support is at 1.8514.
Oscillators are declining.

NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish


Dollar/Swiss franc

Dollar/Swiss edged lower on Wednesday. Again, it would take a break above 1.2700 to convince us that this upmove has legs, but the odds are better for a mild decline.

Above 1.2700, the pair retains a pivotal high at 1.2770. Further resistance is at 1.2818.
Below 1.2610, dollar/Swiss franc has support at 1.2582. Only a break below 1.2525 would signal aggressive weakness and a test of 1.2470.
Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

Forex Market Commentary for October 20, 2006

The short-term overbought dollar fell broadly on Thursday and the weak Philly Fed report accelerated the slide. The weakness should last today as well.


Euro/dollar

Euro/dollar finally exploded out last Friday's range on its way to a near two-week high. It should see more strength today, but the pace of the rally should decelerate.
Above 1.2650, the euro/dollar has resistance at 1.2715. Pivotal resistance follows at 1.2765.
Initial support is at 1.2575. Next support is at 1.2550. Below 1.2500, support now comes at 1.2465.

Oscillators are declining.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen fell sharply on Thursday after failing its attempt of recovery. More weakness is seen for today
Below 117.75, dollar/yen has support at 117.15. Distant support is at 116.06.
Initial resistance is at 118.25 by another 50-point pivot that targets 117.75 and 118.75. Above 119.00, the key level resistance remains at 119.65 from a 50-point pivot that targets 119.15 and 120.15. Above 120.15, resistance is seen at 120.50. Further resistance is the pegged at 121.05 from another 50-point pivot that targets 120.55 and 121.55.
Oscillators are rising.

NEAR-TERM: Slightly bearish.
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish


Sterling/dollar

Sterling/dollar rallied to a 13-day high on Thursday and the strength shoudl persist.
Initial resistance is seen at 1.8860. Above 1.8895, resistance comes at 1.8955.
Immediate support is at 1.8750. That is followed by 1.8700 and 1.8660.
Oscillators are declining.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish



Dollar/Swiss franc

Dollar/Swiss fell sharply on Thursday and should see more weakness today.

Below 1.2545, dollar/Swiss franc has support at 1.2500. Distant support is at 1.2405.
Initial resistance is at 1.2590. Above 1.2637, the pair has resistance at 1.2700.
Oscillators are rising.

NEAR-TERM: Bearish to slightly bearish
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

Forex Futures Morning Commentary -- 2006-10-19 06:59:28

Euro-FX:

The euro is trading higher this morning reversing the weaker tone seen during the prior session. Trend indicators are indicating a bearish market and the overall strength of the trend is strong, as indicated by the ADX. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 10-Day simple moving average has a strong bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is rising, while the long term trend, based on a 50-Day moving average, is down. As the ADX is rising this indicates that the current trend is strong and should remain intact. Look for the current trend to continue.


MOMENTUM INDICATORS:
MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 37.30). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 37.30 the market is somewhat oversold. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence of strength from this indicator before getting too bullish here.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

1.2961 - Highest High in last 50-Days
1.2873 - 20-Day Simple Moving Average Plus 2 Standard Deviations
1.2776 - 20-Day Simple Moving Average Plus 1 Standard Deviation
1.2765 - Highest High in last 10-Days
1.2751 - 100-Day Simple Moving Average
1.2751 - 50-Day Simple Moving Average
1.2697 - 25-Day Simple Moving Average
1.2589 - 10-Day Simple Moving Average
1.2584 - High
1.2584 - 20-Day Simple Moving Average Minus 1 Standard Deviation
1.2579 - 3-Day Simple Moving Average
1.2578 - Last Price
1.2571 - Low
1.2526 - Lowest Low in last 10-Days
1.2526 - Lowest Low in last 50-Days
1.2518 - 200-Day Simple Moving Average
1.2488 - 20-Day Simple Moving Average Minus 2 Standard Deviations

Japanese Yen:

Japanese Yen futures at the CME are higher this morning reversing the weaker tone seen during the prior session. Trend indicators are indicating a bearish market. However the overall strength of the trend, as indicated by the ADX, is weak and should be watched as a result. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade above this moving average. However, despite prices trading above the moving average line, the moving average is in a downward slope from the previous session. If prices trade below the moving average then the trend will be clearly established as up. However, this strength in the price will need to be watched. As a result the 10-Day simple moving average has a weak bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is falling, while the long term trend, based on a 50-Day moving average, is down. However, the weak ADX indicates that the current trend is deteriorating and may possibly reverse. Look for a choppiness ahead.


MOMENTUM INDICATORS:
MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 42.36). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 42.36 the market is somewhat oversold. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence of strength from this indicator before getting too bullish here.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

0.8765 - Highest High in last 50-Days
0.8689 - 20-Day Simple Moving Average Plus 2 Standard Deviations
0.8684 - 200-Day Simple Moving Average
0.8671 - 100-Day Simple Moving Average
0.8611 - 20-Day Simple Moving Average Plus 1 Standard Deviation
0.8583 - Highest High in last 10-Days
0.8580 - 50-Day Simple Moving Average
0.8550 - 25-Day Simple Moving Average
0.8488 - High
0.8485 - 3-Day Simple Moving Average
0.8483 - Last Price
0.8469 - Low
0.8462 - 10-Day Simple Moving Average
0.8454 - 20-Day Simple Moving Average Minus 1 Standard Deviation
0.8414 - Lowest Low in last 50-Days
0.8414 - Lowest Low in last 10-Days
0.8376 - 20-Day Simple Moving Average Minus 2 Standard Deviations

TEN (10) RULES FOR SUCCESSFUL TRADING

Traders have developed lots of rules over the years in an attempt to refine the way they make trading decisions. So it’s not hard to come up with a list of 10 trading rules that can be part of a trading plan. Some are generic and general and not exclusive to any particular trader or trading approach. Others can be very precise as traders tweak rules into their trading system. The rules below have been selected for their broad appeal to many types of traders. They are presented in no particular order of importance.


1. Don’t trade markets about which you know very little.
This is not to imply that you have to be a fundamental expert on every market you wish to trade. However, you should know about what fundamentals are impacting, or could impact, a market you are contemplating trading. For example, a person who has only traded grains would not want to jump right into a Treasury Bond futures trade without first doing a bit of homework on how the bond market trades – price increments (dollar amount per tick), trading hours, on what exchange the market trades, etc.

A trader could pick up a Wall Street Journal and read the “Credit Markets” section for a week or so to become familiar with fundamental factors that influence the bond market. Also, consider this: Most traders enjoy the process of trading. If they did not, they would likely just hand their money over to a “fund manager” and give the manager discretionary control over their money. Learning and knowing what fundamental factors are impacting or could impact a market that a trader plans to trade is part of the process (enjoyment) of trading.


2. Don’t trade hot “tips.”
You may trade for 20 years and never hear a good trading tip. Reason: There aren’t any . . . at least not any that are any good for regular individual traders. Markets are way too big and too tightly regulated to be impacted by any tips or inside information. Any legitimate “early information” has almost certainly already been factored into the market price structure by the time most individual traders could ever benefit from it.

Don’t confuse tips with rumors. Markets do move on rumors more than just occasionally. Rumors are a part of trading but still fall into the category of “not much use” to off-floor traders. Besides, many rumors are never confirmed as fact and are often self-serving to those who try to start them.


3. Don’t get too fancy with your market orders.
Entering a trade “at the market” with a market order may be the best way to enter a trading position, especially in markets that are liquid (have high open interest). It’s certainly the easiest way to enter. Fiddling around with limit or stop-limit or other multi-step orders to save a tick or two or three can cost a trader a good entry point or even a missed trade altogether.

It’s certainly easy to be guilty of this offense because every trader is always trying to get just a little better price. This doesn’t mean that limit or stop-limit or other types of orders are not useful in certain circumstances because they are. However, most trade entries are best made “at the market.” Look at pitchers in major league baseball who “nibble” with their pitches around home plate. Most wind up with a walk instead of an out.


4. Don’t form a new market opinion during trading hours.
This rule goes hand in hand with the rule that says you need to stick to your trading plan of action. Day-to-day market “noise,” or the minor up-and-down price fluctuations of a market, can be at least distracting to a trader and at most prompt the trader to make a hasty and poorly founded trading decision.


5. Don’t force trades; if you don’t see a trade, stand aside.
Don’t chase a market just to put on a trade. Try to exhibit patience and discipline in trading – easily said but hard to follow. Patience and discipline are not easy virtues for any trader to learn because a typical futures trader has a “Type A” personality with a competitive nature who hates to wait in lines. However, to have even a chance at success in trading, you have to control your impatience. If you happen to miss a trading opportunity because you waited too long, other trading opportunities will come along.

A good trade is usually profitable right from the beginning. If the market price moves “your way” in the first couple days after you’ve executed the trade, then odds are significantly higher that your trade will be a winner if you have waited patiently for the right position. This rule reinforces the notion that tight protective stops are an important part of trading success. But there is a time to be impatient: If a straight futures trade is under water after two or three days, more times than not it’s prudent to take a small loss and move on. Do not be patient with losers.


6. Use intermarket analysis to spot trading opportunities.
No market trades in isolation but is influenced by what is happening in a number of related markets. Don’t focus on just one market as much of today’s single-market technical analysis does. Instead, take into account developments in other markets that are likely to affect prices in your target market. If you trade stock indexes, you have to be aware of what is taking place in interest rate, currency and commodity markets such as gold. The price of a market you want to trade may be the sum of what is happening in ten or more interrelated markets.


7. Watch open interest statistics, especially in options.
When you are contemplating trading any contract, make sure to first check the open interest for that specific contract or strike price. If a futures contract or options strike price has a low open interest total, it is probably best to seek out a more liquid contract. Fills on both entry and exit can be tough and may produce more slippage than is desired. When you get into a position, be sure it is liquid enough so you can get out on favorable terms.


8. Know what you can and cannot control.
You can control the market you want to trade. You can control the type of market order you want to give your broker. You can control when you want to enter the market. You can control the amount of contracts you wish to trade. You can control when you want to exit the market.

But you can’t control the market, which often has a habit of doing unusual and unexpected things. Knowing and prudently managing the market factors you can control and knowing that you cannot control the market gives you a trading edge.


9. Make the market’s action confirm your opinions.
If you have a particular market on your “radar screen” for a trade, don’t just jump in based on a hunch or a “gut feeling” or because you want to get a fill right away. That’s when a market order advised above may not be in your best interest. Make the market first confirm your opinion. Make the market show you some strength if you want to be long, or make it show you some weakness if you want to be short.


10. Do not overtrade.
Trying to trade too many markets or too many contracts in one market can create problems for an undercapitalized trader. There is no set rule for how many markets a trader should trade at one time. Some traders can trade many markets at the same time and not have a problem. However, if you are feeling stress about a position you are carrying or can’t keep up with what’s going on in all the markets you are trading, then you are likely over-trading.

For those traders who are really not sure how many markets to trade at one time or how many contracts to trade for each position, it’s always better to take a conservative approach. Step in slowly until you become comfortable trading in a larger size or in multiple markets.

Forex Futures Morning Commentary

Euro-FX:

The euro is trading weaker this morning extending the prior sessions weaker close. Trend indicators are indicating a bearish market and the overall strength of the trend is strong, as indicated by the ADX. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 10-Day simple moving average has a strong bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is rising, while the long term trend, based on a 50-Day moving average, is down. As the ADX is rising this indicates that the current trend is strong and should remain intact. Look for the current trend to continue.

MOMENTUM INDICATORS:

MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 33.12). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 33.12 the market is somewhat oversold, but given the 50-Day new low here, greater oversold levels are likely.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Volatility also appears to be increasing, as evidenced by a larger distance between the upper and lower bands over the past few sessions. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

1.2961 - Highest High in last 50-Days

1.2897 - 20-Day Simple Moving Average Plus 2 Standard Deviations

1.2817 - Highest High in last 10-Days

1.2803 - 20-Day Simple Moving Average Plus 1 Standard Deviation

1.2768 - 50-Day Simple Moving Average

1.2758 - 100-Day Simple Moving Average

1.2719 - 25-Day Simple Moving Average

1.2642 - 10-Day Simple Moving Average

1.2614 - 20-Day Simple Moving Average Minus 1 Standard Deviation

1.2568 - 3-Day Simple Moving Average

1.2556 - High

1.2550 - Last Price

1.2533 - Low

1.2526 - Lowest Low in last 10-Days

1.2526 - Lowest Low in last 50-Days

1.2520 - 20-Day Simple Moving Average Minus 2 Standard Deviations

1.2511 - 200-Day Simple Moving Average

Japanese Yen:

Japanese Yen futures at the CME are weaker this morning extending the prior sessions weaker close. Trend indicators are indicating a bearish market and the overall strength of the trend is strong, as indicated by the ADX. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 10-Day simple moving average has a strong bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is rising, while the long term trend, based on a 50-Day moving average, is down. As the ADX is rising this indicates that the current trend is strong and should remain intact. Look for the current trend to continue.

MOMENTUM INDICATORS:

MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 33.51). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 33.51 the market is somewhat oversold. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence of strength from this indicator before getting too bullish here.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Volatility also appears to be increasing, as evidenced by a larger distance between the upper and lower bands over the past few sessions. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

0.8811 - Highest High in last 50-Days

0.8726 - 20-Day Simple Moving Average Plus 2 Standard Deviations

0.8686 - 200-Day Simple Moving Average

0.8684 - 100-Day Simple Moving Average

0.8639 - 20-Day Simple Moving Average Plus 1 Standard Deviation

0.8608 - Highest High in last 10-Days

0.8594 - 50-Day Simple Moving Average

0.8563 - 25-Day Simple Moving Average

0.8484 - 10-Day Simple Moving Average

0.8466 - 20-Day Simple Moving Average Minus 1 Standard Deviation

0.8440 - 3-Day Simple Moving Average

0.8434 - High

0.8432 - Last Price

0.8419 - Low

0.8414 - Lowest Low in last 50-Days

0.8414 - Lowest Low in last 10-Days

0.8380 - 20-Day Simple Moving Average Minus 2 Standard Deviations

Today's Signals Forex Futures Morning Commentary

Euro-FX:

The euro is trading higher this morning reversing the weaker tone seen during the prior session. Trend indicators are indicating a bearish market and the overall strength of the trend is strong, as indicated by the ADX. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 10-Day simple moving average has a strong bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is rising, while the long term trend, based on a 50-Day moving average, is down. As the ADX is rising this indicates that the current trend is strong and should remain intact. Look for the current trend to continue.


MOMENTUM INDICATORS:
MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 34.28). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 34.28 the market is somewhat oversold. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence of strength from this indicator before getting too bullish here.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Volatility also appears to be increasing, as evidenced by a larger distance between the upper and lower bands over the past few sessions. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

1.2961 - Highest High in last 50-Days
1.2890 - 20-Day Simple Moving Average Plus 2 Standard Deviations
1.2817 - Highest High in last 10-Days
1.2809 - 20-Day Simple Moving Average Plus 1 Standard Deviation
1.2780 - 50-Day Simple Moving Average
1.2763 - 100-Day Simple Moving Average
1.2732 - 25-Day Simple Moving Average
1.2681 - 10-Day Simple Moving Average
1.2646 - 20-Day Simple Moving Average Minus 1 Standard Deviation
1.2585 - High
1.2580 - Last Price
1.2574 - 3-Day Simple Moving Average
1.2565 - 20-Day Simple Moving Average Minus 2 Standard Deviations
1.2560 - Low
1.2547 - Lowest Low in last 50-Days
1.2547 - Lowest Low in last 10-Days
1.2504 - 200-Day Simple Moving Average

Japanese Yen:

Japanese Yen futures at the CME are higher this morning reversing the weaker tone seen during the prior session. Trend indicators are indicating a bearish market and the overall strength of the trend is strong, as indicated by the ADX. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 10-Day simple moving average has a strong bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is rising, while the long term trend, based on a 50-Day moving average, is down. As the ADX is rising this indicates that the current trend is strong and should remain intact. Look for the current trend to continue.


MOMENTUM INDICATORS:
MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 34.54). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 34.54 the market is somewhat oversold. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence of strength from this indicator before getting too bullish here.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Volatility also appears to be increasing, as evidenced by a larger distance between the upper and lower bands over the past few sessions. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

0.8827 - Highest High in last 50-Days
0.8726 - 20-Day Simple Moving Average Plus 2 Standard Deviations
0.8693 - 100-Day Simple Moving Average
0.8687 - 200-Day Simple Moving Average
0.8647 - 20-Day Simple Moving Average Plus 1 Standard Deviation
0.8608 - Highest High in last 10-Days
0.8607 - 50-Day Simple Moving Average
0.8574 - 25-Day Simple Moving Average
0.8511 - 10-Day Simple Moving Average
0.8491 - 20-Day Simple Moving Average Minus 1 Standard Deviation
0.8451 - High
0.8447 - Last Price
0.8432 - 3-Day Simple Moving Average
0.8423 - Lowest Low in last 50-Days
0.8423 - Lowest Low in last 10-Days
0.8423 - Low
0.8413 - 20-Day Simple Moving Average Minus 2 Standard Deviations