fx weekly - jan 22 - jan 28 2012

8/3/2019 FX Weekly - Jan 22 - Jan 28 2012

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Markets will have a busy week aheadwith economic events in the US andEurope. There's no escaping the Greekdebt saga this week as markets areexpecting a deal between the IIF andGreece by Monday on the voluntaryhaircuts. The negotiations continuedthough the weekend with rumors ofdisagreements on the new interest rates.Bloomberg reports agreements wereclose with rates between 4%-4.5%,

however Germany & IMF are insistingon an agreement closer to 3%. Theultimate goal is to reduce Greeces Debtto GDP ration down to 120% from 160%.A deal is still uncertain as there areplenty of moving parts and in typicalEuro fashion it only takes one no to spoilthe party. Considering that the holders ofGreek debt also hold Greek CDS it willbe interesting to see how a deal isconsummated. The most recentdevelopments came on Sunday when

CNBC reported a spokesman for the IIFstated the deal conveyed to the Greekauthorities is the maximum consistentwith a voluntary deal. Keep a close eyeon the developments out of the EUfinance ministers meeting Monday for

any indications of acceptance or lackthere of.

Next week is full of additional EU debtauctions mostly short-term debt fromItaly, Spain, France with 30 yearauctions by Germany, and Netherlands.We are expecting similar risk positiveresults we saw last week. We will bewatching closely the Germany 30 year

auction on Wednesday as a barometerof the long-term debt demand. As theEU summit approaches we favor furtherrisk appetite and continued recovery ofthe EUR. Over the last year the EURhas behaved positively and risk appetiteincreased off of hopium leading up tothe EU summits. I must note that thesekick the can meetings usually end inmarket disappointment and furtherdeclines in the EUR. Unless the Greeknegations break down I favor long EUR

trades leading into the summit and amlooking for more favorable levels toestablish short entries in the EURUSDbetween 1.3100-1.3250 targeting1.2000. Since the EUR can break downon any headline I will likely avoid longEURUSD trades for the time being infavor of shorts in direction of the primarylong term trend.

Looking further into the week we cannotover look the two day FOMC meeting

and the end-of week Gross DomesticProduct growth data. The FOMC willrelease their interest rate policy and in aunique policy change will beginforecasting their rate policy though 2016.With interest rates at near 0% Fed

Fundamental Outlook

Elite Global

Trading Forex Weekly CommentaryJan 22nd Jan 28th 2012 Volume 2, Issue 2

In this issue:

Fundamental

Outlook

1

GBPUSD 2

AUDUSD

EURUSD3

Event Risk 4

Contact Info

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8/3/2019 FX Weekly - Jan 22 - Jan 28 2012

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Chairman Ben Bernanke has beenforced to identify creative ways for thefed to meet its dual mandate.

I do no expect any major policy changesto be announced at this meeting. Whilethe markets are craving a hit from theQE pipe, I would be very surprised if wesaw any indications of furtheraccommodation given the recentmarginally decent Data from the US. Bevery careful here as there is a lot ofmarket anticipation around this meetingand if I am correct about no indicationsof accommodation markets will surly bedisappointed taking a hit in risk appetite.

I feel strongly about this projectionespecially since Bernanke will beunavailing the FOMC projections of thefederal funds rate targets. He will likelyfocus on this while holding his normalposition that the Fed Stands ready toassist market stability as needed.

The things to be watching for are; theprojections of target federal funds rates,the press conference (where Bernankewill discuss new FOMC growthforecasts), any possible statementchanges.

Key reactions to watch out for:

In the unlikely event of further Fed

Elite Global

Trading

Jan 22nd Jan 28th 2012 Volume 2, Issue 2

GBPUSD: More gains for the Pound into the1.5650 range. A top will be set in place soon,

don't be faked out by this rally up. If there is arecession or region-wide financial crisis for

the Euro Zone, it is highly likely that the United

Kingdom is not far behind (if it is not already

suffering the same fate). The relationship

between euro and sterling price action against

third party currencies is exceptional due to its

fundamental connections, but there are still

external factors that can offer a degree of

separation. With 4Q GDP seen contracting, we

could see another shot to lower lows in the

months ahead.

Outlook: Neutral, looking for move up to topout around 1.5650 in the weeks to come

before the next larger move down. We could

see congestion at the top prior to the next

major move. Look for support on this move up

to sit at, 1.5513, 1.5495, 1.5445, and

1.5364. Looking at topside resistance to hold

at 1.5648 area on this move up, 1.5775

would be the cap and if a break of that will

give a more reason for bullish activity.

UK Pound Sterling / United States Dollar

Accommodation look for strong riskrally and weak USD

Any Big US GDP misses sell riskas the markets sells off.

In the event of Greek debtnegations fail and imminent defaultsell EUR at current level and holdon tight.

If the German or Netherlands debtauctions fail look to sell risk.

Expectations EU Authorities will say anything to

calm markets expect hopiumrallies.

FOMC will focus exclusively onprojections of Fed Funds ratetargets and markets will bedisappointed about no mention ofaccommodation.

Rally in risk appetite to start theweek (Successful EU Memberbond Auctions, Support for Greeknegotiations, propaganda leadinginto the EU summit, and the Fed

has got to do furtheraccommodation....right?)

8/3/2019 FX Weekly - Jan 22 - Jan 28 2012

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AUDUSD: Risk move to start the year off isslowly coming to an end with confluence

topping across multiple risk assets. Looking at

the Aussie we could see some headwinds

start to bear down on the major currency pair.

Currently, the market is fully pricing in 100

basis points of rate cuts over the coming 12

months and the outlook for rates generates

greater short-term volatility than the currently

level does. That said, we will see if Aussie

dollar traders preoccupation with the ebb and

flow of risk appetite trends can be temporarily

disrupted by the release of fourth quarter CPIfigures. Unlike the New Zealand numbers

released last week, this report isnt expected

to deliver a sharp easing in inflation pressure;

but the dovish bearings of the policy group

could leverage a smaller changes impact. We

are looking for a topping formation in the

week to come on this pair between 1.0500-

1.0630.

Outlook: Bullish Bias, a break higher of lastweeks formed triangle was the indication of a

move to higher highs before a final top will be

put in place for the next move towards parity.

Look for support at, 1.0455, 1.0438, 1.0422,

1.0400, and 1.0370. Targets on the upside

are, psychological level 1.0500 and extension

at 1.0566.

Australian Dollar / United States DollarElite Global

Trading


EURUSD: The Euro zone enjoys a relief rally toend last week, but how long will this last?

Heading into the trading week, there

potential fundamental time bombs that cold

stall this relief rally; but the weight of theirinfluence has lessened considerably from just

a few weeks ago. Given expected time frames,

the terms of the private sector investors

accommodation for Greeces debt burden will

be the first concern. The current consensus is

still for a 50 percent haircut (essentially debt

forgiveness), in a roll to new 30-year bonds

with a significantly reduced 3.0 to 4.75

percent coupon. Anything along these lines

could buy us a little more time of disregard for

real fundamental threats. We have come to

expect the same quick-fix and well-fix-it-later

policy decisions to follow the EU Finance

Minister summit on Monday. A little more

open to surprise are the growth-based

economic indicators and the ECBs three-

month liquidity tender due in the first 48

hours. The data out have not had an influence

that one would expect because of the major

headwinds we have dealt with regarding the

euro zone have mainly overshadowed from amed term perspective.

Outlook: LT Bearish Bias, ST Neutral, lookingat continued move up to resistance around

1.3100 area over the next few weeks.

Volatility in the high 1.2000s can be expected

before the next major downturn to the lower

1.2000s, support to watch for the move up

sits at: 1.2877, 1.2848, 1.2805, and 1.2763

a break of this will open the door for the low

of 1.2625. Look for resistance at 1.2900,

1.2945, 1.2986, and 1.3056. We are lookingat buying on dips at support levels with stop

below 1.2763, targeting 1.3100 area.

Euro / United States Dollar

8/3/2019 FX Weekly - Jan 22 - Jan 28 2012

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Elite Global

Trading


Sunday:AUDUSD: PPI 7:30pm

Monday:EUR: Consumer Confidence 10am

AUD: CB Leading Index 6pm

Tuesday:EUR: French/German/EUR Flash PMI 3-4am

EUR: ECOFIN Meetings

GBP: Public Sector Net Borrowing 4:30am

EUR: Industrial Orders 5am

EUR: Belgium NBB Business Climate 9am

GBP: Gov. King Speaks 3pm

AUD: CPI 7:30pm

Wednesday:EUR: German IFO Business Climate 4am

GBP: MPC Meeting Min 4:30am

GBP: Prelim GDP 4:30am

USD: Pending Home Sales 10am

USD: FOMC Statement/Fed Fund Rate

2:15pm

NZD: Official Cash Rate/RBNZ Rate

Statement 3pm

Thursday:EUR: GfK German Consumer Climate

USD: Core Durable Goods Orders 8:30am

USD: Unemployment Claims 8:30am

USD: New Home Sales 10am

JPY: Monetary Policy Min 7:50pm

Friday:EUR: M3 Money Supply 4am

CHF: KOF Economic Barometer 5:30am

USD: Advance GDP 8:30am

USD: Revised UoM Consumer Sentiment

9:55am

Weeks Event Risk

8/3/2019 FX Weekly - Jan 22 - Jan 28 2012

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Any reliance you place onsuch information is thereforestrictly at your own risk.

In no event will we be liable for any

loss or damage including without

limitation, indirect or consequential

loss or damage, or any loss or

damage whatsoever arising from

loss of data or profits arising out of,

or in connection with, the use of this

newsletter.

The information contained in this

newsletter is for general information

purposes only. The information is

provided by Elite Global Trading and

while we endeavor to keep the

information up to date and correct,

we make no representations or

warranties of any kind, express or

implied, about the completeness,

accuracy, reliability, suitability or

availability with respect to the

newsletter or the information,

products, services, or related

graphics contained on the

newsletter for any purpose.

News letter Authors:

Anthony [email protected]

James [email protected]

Tel: 786-759-0348

E-mail:

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Elite Global Trading

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fx weekly - jan 22 - jan 28 2012

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