Peter Bain Forex Trading Commentary for Friday March 17, 2006

Forexmentor.com Currency Trading Price Action

Price is below the 89 and 144 EMAs at all levels for the USD/CHF pair (read, Swissy), and I'm not getting any reading from MACD on the hourly chart. But, I do see that MACD has turned bearish on the daily. So, I can only conclude that we should expect further price weakness for this pair. This, of course, is totally consistent with what COT is telling us - in that the commercial traders (read, Big Dogs) are extremely long the Swiss franc (read, short USD/CHF). Watch out below! The Golden Rule of Selling the Rallies in a Downtrend still applies. This trading idea is something to watch out for, especially at certain key strategic times of the day. For instance, the Swissy offered up a good counter-trend swing trade reversal at the London close yesterday, and that was followed by an opportunity to sell into the rally at the London open today. Great day trading opps. abound here. And, of course, position traders are happy campers.

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Forexmentor.com Forex Trading News

A recent Federal Reserve report revealed that U.S. economic activity is picking up, while inflationary pressures are moderating. The Federal Reserve's Beige Book regional economic survey supported the notion that the central bank is nearing the end of its tightening cycle. The Empire State Manufacturing Survey, which measures activity in the New York Federal Reserve district, has surpassed expectations.

Canada's dollar has legs, and has been given a boost by gold prices. Gold and the Canadian dollar have moved in tandem 87% of the time during the past year. Commodities, including gold and oil, make up about 35% of Canada's exports and about 10% of its economy, which is the world's ninth largest. The Canadian dollar is also benefiting from recent weakness in the greenback.

Oil prices are jumpy these days over concerns about the possibility of disruptions in Iranian shipments and a rally in gasoline.

Peter Bain Forex Trading Commentary for Thursday March 16, 2006

Forexmentor.com Price Currency Trading Action

The USD/CHF and AUD/USD pairs continue to occupy my attention, because they're so easy to relate to - given the commercial sentiment (extremely long both the Aussie and the Swissy). Why make it difficult on yourself? Go with the flow! The USD/CHF pair is in a downtrend, and the AUD/USD pair is in an uptrend. Who could have guessed?Magic folks! When you know the overall tone to the market, then you want to be on the right side of the fence - selling the rallies in a downtrend, in the case of the USD/CHF pair, and buying the dips in an uptrend, in the case of the AUD/USD pair. From a day trading perspective, the USD/CHF pair is in a downtrend, offering up some great opps. to short the rallies in the downtrend (witness the London open, as just one example). Also, it tanked at news time. That's not to say you can't avail yourself of counter-trend moves, as in what happened at the NY close yesterday - so long as you know what's happening in the grander scheme of things.

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Forexmentor.com Froex Trading News

U.S. retail sales for February came in softer than expected, thus easing interest rate worries. A report by an influential consulting group further suggested that U.S. interest rate increases are nearing an end. This is all greenback-negative, but good for the other currencies paired to it.

The Canadian dollar is one beneficiary, and it is also being helped along by higher energy prices.Gasoline prices have everybody aghast, as they are at a five-month high. Supplies are falling, as refineries shut down their facilities for regular maintenance.

Peter Bain Forex Trading Commentary for Wednesday March 15, 2006

Forexmentor.com Currency Trading Price Action

The two most important things to talk about today are the Aussie and Swissy, from a position trading point-of-view. The Big Dogs are extremely long both currencies, with respect to commodities futures commitments-of-traders data (read, COT). Since this info. is a proxy for the forex, it is reasonable to expect that the AUD/USD pair will continue to go up (but not in a straight line), and that the USD/CHF pair will continue to experience weakness. Here, I am talking about taking positions off the daily chart, in either case. You have to exercise sound technical analysis to get your entry point right. It's always wise to buy weakness in an uptrend, and sell strength in a downtrend. It's called Buying the Dips in an Uptrend and Selling theRallies in a Downtrend.

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Peter Bain Forex Trading Commentary for Tuesday March 14, 2006

Forexmentor.com Currency Trading Price Action

Hear ye! Hear ye! The commercial traders are extremely long the Swissy and Aussie, meaning that you should expect the AUD/USD pair to advance from here, and correspondingly one would presume that the USD/CHF has nowhere to go but DOWN! You heard it hear first.

If you are a position trader, this information is vital. Once you know what the Big Dogs are up to, you then have to exercise good trading sense to pick your entry points at the right time and place off the respective daily charts. The beauty of trading is that one can also day trade, and take advantage of short-term counter-trend trades off lower level charts (read, hourly and 15 minute). Today, for instance, we had a nice bounce off railway tracks at 4:30 am ET for the Swissy on the 15 minute. This was to be expected, given the expected low coming in at the M1 level, and the formation of MACD divergence. But, I see this as short-lived, as the overall trend is down, and the spike up was really going against the grain. Don't forget what I said about the commercial sentiment presaging a fall for the Swiss franc in the forex world, and a rise in its sister futures counterpart.

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Forexmentor.com Forex Trading News

Morgan Stanley now expect the Fed to increase the Federal funds rate to 5.25% by September or so. Previously, they thought the Fed would stop at 5%. Their change of heart is attributed to strong US and global growth.

8:30 am ET news reported softer-than-expected headline retail sales data, which was dollar-negative.

The slide in the Canadian dollar seems to have halted at a common sense demand (read, support) trendline on the nearest month's daily chart. This after it dropped to a seven-week low versus the U.S. dollar on smaller-than-expected January surplus data. Canada's currency typically moves in tandem with commodity prices, but lately the currency market has been paying more attention to economic data and interest rate expectations. Canada's unemployment rate is the lowest it's been in three decades.

Crude oil prices are up from a three-week low on fears of further disruptions to Nigeria's production and Iran's refusal to suspend its uranium enrichment program.