In Forex and Futures Commentary

Optimism floating around the world markets tonight as volatility continues and seeing further bailout signs of hope coming in from other parts of the globe, namely the Netherlands and South Korea. SPX futures are also rising, with Ben Bernanke expected to speak tomorrow in front of the House of Representatives at 10am EST. Expecting mixed sentiment today – I’m quite non directional – a rare day for me, but forced to play with the trend. In times like these buying USD has been the theme so selling pressure should be on other currencies is the safer strategy with no major turn of events on the plate. Just keep your ears open for the Fed Chairman tomorrow and expect volatility. With world markets performing better tonight on the “same old news” it’s only a matter of time before the reality kicks in again.

It’s been a tug of war in regards to trader sentiment to bank bailouts: one day it sparks optimism, the next day pessimism. Overall, think of the bottom line. Until we see economic conditions improving, there’s no real reason for people to be buying across the board. Moves like the ones we are seeing tonight usually get faded. That has been the theme throughout this entire downtrend thus far.

Crude is a topic of big discussion lately with OPEC expected to cut output for the first time in two years. We’re getting moves higher on this news, which could trigger some movement across markets. Currently trading around 73.50 and wouldn’t be surprised to see further spikes in price from these expectations. Impact on currencies will be a weaker dollar in general, if the fire is spread (though correlation norms have been quite off lately in terms of commodities and USD; important).

Dollar index closed higher on Friday with 84.23 and 85.17 as the next targets. Remaining conservative, however, until themes get planted on more solid ground this week.

Bottom line:

Expecting a bump lower on USD tonight but not afraid to buy later on (sell EUR, GBP, etc). Better areas ahead (higher) on GBP, EUR, etc, so I would rather wait and see if they get hit than get into any longs now….uncertainty in heavy short term consolidation right now, though leaning to the upside on these pairs as I write. Great profits last week, intend on keeping it that way. CHF buy levels I’m not the biggest fan of. There is a lot of ambiguity surrounding these numbers. The more concrete levels today can be found on GBP, EUR and JPY.

Levels:

GBP has sells at 1.7600, 1.7648, 1.7840, buys at 1.7397, 1.7285, 1.7185, 1.7135, 1.6930, 1.6860, 1.6800
JPY has sells at 102.95, 103.22, 103.73, 104.50, 104.98, buys at 98.50, 99.35, 100.60, 101.47
EUR has sells at 1.3533, 1.3555, 1.3615, 1.3641, 1.3685, 1.3768 buys at 1.3344, 1.3300, 1.3260, 1.3070, 1.2980
CHF has buys at 1.1280, 1.1250, 1.1215, 1.1130, 1.1090, 1.0930, sells at 1.1490, 1.1595-1.1605(nblevel), 1.1620, 1.1700

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