InformedTrades

The FOREX Market
- June 30 2008. Email - Info@globalfxradio.com

The USD was all over the map over the past 24 hours as the first half of 2008 comes to a close. Much of the movement in our opinion is position squaring as well as possible reaction to a better than expected Chicago PMI report. PMI came out just a bit better at 49.6 but it was enough to send the USD rallying across the board. Note: last we checked 49 was less than 50? Mfg in the US is contracting period. This looks like a temporary pause in the USD decline for the moment. This week we still have plenty of data from the US as well as an ECB rate decision that could cause the Dollar to get whacked!

Regarding Europe and the ECB, inflation data came out last night higher than expected at 4%y/y, Trichet surely will not like this number at all. the Eur/Usd rallied on the news only to give back gains after the ISM numbers. Was there damage done to the charts? Hell Yeah! Was that the top in the EUR? Hard call and hard to believe before Trichet raise rates on Thursday.

In late Asian trading we had Moody's upgrade Japans currency. The Yen exploded on the news, only to give mo if not all back in the US session!

Japan's local-currency credit rating was raised one level to Aa3 by Moody's Investors Service, which cited government efforts to curb spending and reduce debt. The increase on long-term debt from A1 ``was prompted by expectations of continued fiscal restraint and consolidation, coupled with an easing-out of the debilitating effects of deflation,'' Thomas Byrne, senior vice president of Moody's, said in a statement. ``The government and ruling party is firmly committed to fiscal consolidation.''
Prime Minister Yasuo Fukuda last week reaffirmed his pledge to balance the budget by 2011 so that the government can cut its debt, the world's largest, from 838 trillion yen ($7.9 trillion). Economists say Japan hasn't done enough to pare borrowings that the Organization for Economic Cooperation and Development estimates at 182 percent of gross domestic product.

We have always said that luck is a part of trading, every dog has his/her day!!! We will take it! Hopefully you did too!!!

UK numbers were anything but good. Mortgage approvals were worse than expected coming in at the worst pace since 1999!

Lots of data due out tonight plus its the start of the new Quarter so we expect volatility to continue, ESPECIALLY IN THE YEN. Japanese Tankan Report tonight should be a major MME.



Commodity, Equity and Bond Markets

- Oil pushed higher once again as fears of an Israeli attack and Irans would be response permeated the market. Oil is broken out, period the end.


Gold reversed a bit as the USD rallied but no major damage done to the daily charts. Should 940 be breached, looking for 960 quick.

Bond yields were up than down than up!! No real direction as the market awaits NFP on Thursday. Yields should come down as well as the YEN carry trade!

Equity prices were firm today but far from explosive. Looks like a breather as there was no crash that we are sure many felt was possible over the weekend. In our opinion, there will be a day where the stock market in the US is down well over 1000 points intra day. Remember our words!! That should be the capitulation bottom so many of us have been waiting for. There has never been a true bottom without capitulation, NEVER!

Economic Numbers Next 24 Hours-
JPY - Japans Tankan Quarterly report comes out tonight. Given that the Reuters Tankan Report was quite weak, market should anticipate a bad report. Sort of like ADP, not a true tell all report. Should the YEN weaken in front of the report and come in better than expected, look for a sharp rally in the Yen in Asia. Haven't seen that in a while!

AUD - Huge event tonight as the RBA has an interest rate decision. look for no change but probable hawkish comments from the RBA Gov Stevens. Statement is the key!

NZD - Nada

GBP - House price data at 2am EST big but Mfg PMI at 4:30am Bigger!!! Market knows Housing in trouble, doesn't know if Mfg is.

EUR - German unemployment data and retail sales data due out at 2am est. Could be important as Germany has been the only bright spot in Europe. MFG pmi at 4AM EST is important as well as the number could come in under 50 again! Do you see this data Mr. Trichet. Unemployment for EZ expected to be 7.1%, could be interesting to the upside!

CHF - PMI estimate at 55.1. No clue but could move EUR/CHF

USD - US ISM data should be an MME for sure, today's Chicago PMI no indication of this number, looking for a weaker number here. Construction data due out at 10am est, we all know this should be bad, we dont know about ISM or NAPM!

CAD - Holiday
Geo-Politics
-

Bush is the biggest lame duck president we have ever seen. Do you think anyone is listening to what he or Condi Rice has to say? We think not. It almost feels like Bush consults Mcain on policy! Amazing. Interesting report regarding Obama's policies. Apparently it will put the US in even more debt. We felt this article from Bloomberg is worthy of quotation.


Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., said a Barack Obama administration may have no other choice than to produce the first $1 trillion U.S. budget deficit. ``You have inherited a mess,'' Gross, co-chief investment officer of Pimco, said in an open letter to Obama, the likely Democratic presidential nominee, published on the Newport Beach, California-based company's Web site today. ``What do I think you should do as the new president to rectify this mess? All I know is that any solution will come with a high price tag.''
Higher taxes for hedge-fund managers and oil companies will not cover the $500 billion stimulus the economy needs, including the anticipated Obama tax cuts for the poor and middle-class, universal health care and aid to the depressed residential real estate market, said Gross, a long-time Republican. The likely expenditures and increased borrowing suggest that ``intermediate and long-term yields on government bonds have already bottomed and will gradually rise'' through the next four years and possibly beyond, Gross said.
Gross domestic investment in machines, houses and inventories has fallen by $200 billion since its 2006 peak, Gross said. Domestic consumption will soon be $300 billion short of what's needed for an economic rejuvenation, he said. With the deficit already pushing $500 billion even before the next president is sworn in, Gross anticipates it will reach $1 trillion deficit by 2011.
Republicans ``will blame you for years and label you `Trillion-Dollar Obama,''' said Gross, in his analysis that assumes Obama will defeat his presumptive Republican adversary, John McCain. . ``There is, in fact, not much that you or any other President can do".
Sounds pretty messy to us!



Charting - Daily Candle Analysis
EUR/USD - Significant reversal today. Looking to go short this pair but not looking for much. Think the USD could be strong only to reverse after tomorrows ISM. BIAS - SOUTH

USD/JPY - Hit our target at 105. Looking to sell into USD strength at 106.60. Over 107 must change bias. BIAS - SOUTH

USD/CHF - Nice reversal day today. looking for pair to hit 103 than reverse, turn around Tuesday baby! BIAS - NORTH THAN SOUTH

GBP/USD. - Nice hanging man on daily. Looking for pair to come in than reverse up. 19850 big support area.BIAS - SOUTH THAN NORTH

AUD/USD - Major reversal today. Would be more bias to sell but rate decision and statement could give Aussie a pop. Under .9540 looks very weak. BIAS -NORTH on pullbacks

NZD/USD - IRS winner today as AUD/NZD sold off nicely. BIAS NORTH

USD/CAD - Broke out to upside, looks like 102.00 to short. BIAS -
SOUTH into strength.

DXY or USD Index - Nice hammer on daily chart, looking to sell at 7300 area. BIAS - SOUTH

CHART OF THE DAY - CHF/JPY

Nice shooting star on daily from 3 days ago. Pair extremely overbought. 104.60 stop, looking for 102.75 near term easy. Could be top for 2008!!!


shooting star















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