Peter Bain Forex Trading Commentary for Thursday March 9, 2006
Forexmentor.com Currency Trading Price Action
Back to the Swissy today, as it is temporarily in an uptrend having put in a double bottom on the 15 minute chart yesterday afternoon and evening ET. But, don't be fooled. The commercial traders (read, BIG DOGS) are extremely LONG the Swiss franc, which augers well for a tumble in the USD/CHF pair at some point, sooner than later.
All price is doing now is retesting a recent demand (support) trendline that was recently broken on the daily. Such a phenomenon occurs quite frequently. It's called a head fake. When you see commercial sentiment swing one way or the other (extremely so), you have to use prudent technical analysis to pick your entry point for a position trade (in this case, to go short). Back to today's price action. After yesterday's doublebottom, price did rise all the way up to R1 today, and then collapsed into the London open, at which time it reversed again, in the form of railway tracks (tweezers). Like I have said before, I like to work with a currecy pair that is headed north, even if only temporarily and, hence, my decision to focus on the Swissy today.
See today's chart at: http://www.forexmentor.com/campaign/mar0906.html
See sample AM Review at: http://www.forexmentor.com/sampler/
Forexmentor.com Forex Trading News
Concerns abound about higher borrowing costs in the U.S. (and elsewhere), and those concerns have spilled over into copper prices, as there are worries that construction demand will stall. Of course, copper plays a big part in that industry. On the flip side, the yield on the 30-year U.S. Treasury bonds is at the highest in almost three months.
The Bank of Canada has all of a sudden turned dovish in its remarks. Together with its fifth consecutive quarter-percentage point hike of its overnight interest rate target, which now stands at 3.75%, it modified its language in its news release, using the word may to describe the possibility of a further modest increase in its policy interest rate.
The BoC is obviously concerned about the impact higher rates are having on the loonie, as the manufacturing section, which has come to rely on a low Canadian dollar, is really hurting. Exports, which are mainly to the U.S., become less competitive, and suffer greatly as that currency climbs. Counterbalancing that fact is the broader picture, wherein the resource sector has benefited from higher commodity prices.
Back to the Swissy today, as it is temporarily in an uptrend having put in a double bottom on the 15 minute chart yesterday afternoon and evening ET. But, don't be fooled. The commercial traders (read, BIG DOGS) are extremely LONG the Swiss franc, which augers well for a tumble in the USD/CHF pair at some point, sooner than later.
All price is doing now is retesting a recent demand (support) trendline that was recently broken on the daily. Such a phenomenon occurs quite frequently. It's called a head fake. When you see commercial sentiment swing one way or the other (extremely so), you have to use prudent technical analysis to pick your entry point for a position trade (in this case, to go short). Back to today's price action. After yesterday's doublebottom, price did rise all the way up to R1 today, and then collapsed into the London open, at which time it reversed again, in the form of railway tracks (tweezers). Like I have said before, I like to work with a currecy pair that is headed north, even if only temporarily and, hence, my decision to focus on the Swissy today.
See today's chart at: http://www.forexmentor.com/campaign/mar0906.html
See sample AM Review at: http://www.forexmentor.com/sampler/
Forexmentor.com Forex Trading News
Concerns abound about higher borrowing costs in the U.S. (and elsewhere), and those concerns have spilled over into copper prices, as there are worries that construction demand will stall. Of course, copper plays a big part in that industry. On the flip side, the yield on the 30-year U.S. Treasury bonds is at the highest in almost three months.
The Bank of Canada has all of a sudden turned dovish in its remarks. Together with its fifth consecutive quarter-percentage point hike of its overnight interest rate target, which now stands at 3.75%, it modified its language in its news release, using the word may to describe the possibility of a further modest increase in its policy interest rate.
The BoC is obviously concerned about the impact higher rates are having on the loonie, as the manufacturing section, which has come to rely on a low Canadian dollar, is really hurting. Exports, which are mainly to the U.S., become less competitive, and suffer greatly as that currency climbs. Counterbalancing that fact is the broader picture, wherein the resource sector has benefited from higher commodity prices.
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