Forex Update

USD/JPY Daily Commentary for 4.16.09

The USD/JPY continued its slight selloff despite a late session rally in U. S. equities. We still don't feel the present pullback in the USD/JPY is backbreaking, yet.

The currency pair has our 2nd tier uptrend line to rely on for the time being. However, as we stated before, the uptrend is extremely young compared to the downtrend, giving the downside precedence.

On the other hand, everybody knew the crucial 100 level would be a tedious obstacle to overcome. We continue to witness a battle of the economies.

GBP/USD Daily Commentary for 4.16.09

The Cable has come well-off its highs on relatively light volume in what we view as healthy profit taking. As expected, the Cable is having some trouble leaving behind the highly psychological 1.50 level.

The weakness of the Pound is reflected in the EUR/GBP finally finding a bottom. The present downturn in the GBP/USD was triggered by no discernable news/data, which leads us to our conclusion of fundamental profit-taking.

Although the Cable has dipped below our 2nd tier uptrend line and April 6 highs in the process, the currency pair managed to stabilize above April 15 lows.

EUR/USD Daily Commentary for 4.16.09

Gold Daily Commentary for 4.16.09

Not much has changed in gold as it trades sideways between our 1st and 2nd tier downtrend lines. The precious metal has given us no reason to alter our negative stance and gold certainly has its hands full with the psychological $900/oz and our 2nd tier downtrend line.

We anticipate gold to gravitate towards its natural negative correlation with U. S. equities during critical moments. Hence, the precious metal is still hinting at another breakout in the S&P futures with the back of the uptrend broken.

Crude Daily Commentary for 4.16.09

Crude futures continue to drag along our 1st tier uptrend line as investors debate trends and whether to leave $50/bbl in the past.

It seems investors could reach a decision soon with our 1st and 2nd tier uptrend and downtrend lines reaching their respective inflection points. We notice the same pattern of inflection in the EUR/USD, meaning the markets could get very volatile at the end of the week.

The data from the U. S. over the past 48 hours continues to send mixed signals regarding the state of the American economy. The confusion is reflected in crude futures with investors unsure whether to bank on a recovery.

Treasury Bond Daily Commentary for 4.16.09

The 30 Year T-Bond futures are topping out again despite a lack of significant movement from U. S. equities. The 30 Year is obeying its downtrend, and its decline could be a cause for concern if there isn't a counterbalancing rally in the S&P futures.

We still haven't seen that follow through to the upside in either the 30 or 10 Year futures after March's furious rally.

Therefore, even though the Fed has already purchased over $50 Billion worth of government debt, the level of quantitative easing combined with normal investor purchase of debt may not be sufficient to counter to the massive supply required for America's economic stimulus package.