Don’t Be A Hero
Let’s Keep It Simple
Summer markets continue. With all the events
looming large next week, Iraq, Fed meeting, it is no surprise it is quiet. Even
with all the debate over the Fed’s policy going forward, implied volatilities on
the 10-year Treasury note futures was at its lowest since May 2003. For FX, the
future direction will be largely determined by events next week and going
forward. The Dollar continues lower but will need continued confirmation by a
monetary policy that indicates slower rate rises, a Japanese economy/Nikkei that
looks poised for further gains and the ECB continuing to indicate no rate cuts
going forward.
I maintain a short in
USD/JPY but legged out of half of this position yesterday as
divergence on shorter-term model indicated support at 108.40-108.50 area. A
break below 107.80 is needed if further downside targets are to be hit. So, as
mentioned yesterday, this is no market to be seeking cures for boredom.Â
Nonetheless, some key technical levels to keep an eye on:
EUR:Â Â
1.2170Â Â Â 1.2101Â Â Â 1.1977Â Â Â 1.1900Â Â Â
GBP:Â Â Â
1.8490Â Â Â 1.8600Â Â Â 1.8153
JPY:Â Â Â
107.85Â Â Â 108.50Â Â Â 108.85Â Â Â 109.15
AUD:Â Â Â
.6845Â Â Â .7056Â Â Â
NZD:Â Â Â
.6271Â Â Â .6288Â Â Â .6400Â Â Â .6200 Â Â
For now, that is all there is to share. With
Summer upon us and a potentially active week ahead, make solid use of your time
and do not get too caught up on being a hero.
As always, feel free to send me your comments and
questions.