What’s Up, What’s Down: Dollar Down Vs the Euro
Comments for Wednesday, October 21, 2009
Looking Ahead to Today by Reflecting Back at Tuesday’s Price Action
CURRENCIES:
Higher closes yesterday for the Swiss franc, Japanese yen and dollar index while lower for the Euro Fx and British pound. The Canadian dollar settled sharply lower. The euro made a new CONTRACT HIGH before settling lower in reversal type action while the franc had its highest high and close (one tick) since July ’08. The yen also settled higher by one tick and is in a bearish consolidation pattern while forming an even larger potential sell signal at the same time. The Canadian dollar settled sharply lower closing in on a major support area under 9400 all the way down to the 9000 area. This was what I was afraid might happened as mentioned here last week when 9400 was much further away and still its closest support area. The pound closed slightly lower this time still in a key resistance area needing to close over 16500 basis the December contract. The Aussie dollar made another new recent high (Aug. ’08) but settled lower in reversal type action still in the best up-trend of all the currencies overall. Finally, the dollar index closed higher not making a new low for a change.
GRAINS:
Lower closes for Minneapolis, Kansas city and Chicago wheat along with corn rough rice, oats, soybeans soymeal and soyoil. All of the wheat continues showing bottoming signs while trading quietly today. The lower dollar and delayed harvest conditions due to wet weather and a 6-10 forecast for more rain has recently helped the rest of the grains along with the funds doing some significant buying despite the largest corn crop in history. Most of the farmers that I’ve talked to consider the latest grain rally a gift. However, I still my decisions off the technicals learning from experience the worst losses that I’ve experienced came from trades that I had the strongest convictions. Corn settled over 14 cents higher making its best close since last June with the all important 400 level basis the December contract in its sight. Rough rice closed higher still hanging on to its buy signal with little support down to 13500 basis the January contract.. Oats had its best close since June looking very strong overall. Soybeans and oil had their best closes in a month with meal lagging behind but all have held critical areas so far helped by the weather and a weak dollar. Closed lower and oil higher again with the latter making a new recent close again. My buy signals are still good but the beans and meal are in critical areas to hold.
See the balance of my morning comments, including the Metals, Softs, Energies and Grains, at my website. For my complete coverage, visit my commentary page at www.markethead.com.
Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.
The information in this Report and the opinions expressed are subject to change without notice. Neither the information nor any opinion expressed constitutes a solicitation by Rick Alexander or the Zaner Group of the purchase or sale of any futures or options. Futures and options trading is speculative in nature and involves risks. Spread trading is not necessarily less risky than outright positions. Futures and options trading is not suitable for all investors.