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EUR/USD

Well it’s been a while since I’ve posted. I had a nice little vacation in Orlando, Florida. Thankfully, tropical storm Noel did not hit us and I was able to return home safely. The market sure has been busy since my last post. If you followed along, you know that I was an extreme bear on the Euro. The Euro has been the exact opposite. Alas, a good trader never frets in these situations. During times like these, it’s nice to catch the little retracements and the charts are now showing another opportunity to do just that. The 4hr chart shows a very long and extended bearish divergence and both 4hr and daily stochastics are in overbought territory. Currently the pair is trading around 4550 and I would expect the Euro to drop down to 4500 or even to its 50 EMA on the 4hr chart at around 4450.

GBP/USD

The Cable has made an even larger push than its Euro brethren and has been killing the Dollar. However, with such a strong move, a retracement looks like it will happen very soon. The 4hr chart shows flat highs on the price, but lower highs on stochastics which indicates a drop is about to occur. Daily stochastics are also in overbought territory which confirms this bearish viewpoint. I would look for the Cable to drop from its current price around 2.0870 down to 2.0800.

USD/CHF

The Dollar has also been taking a nice butt whoopin against the Swissy since my last post. However, like the Euro and Cable, it looks like a retracement is near. On the 4hr chart we can see the formation of a bullish divergence. Not to mention the fact that 4hr stochastics have crossed up in oversold territory and daily stochastics are also in oversold territory. All the technical signs point to a bullish retracement right now. I would look for the Dollar to run up against the Swissy from its current price around 1460 up to 1500.

USD/JPY

The Yen has moved into range mode as it has been drifting between 114.00 and 115.00 for the past few days now. Right now, the technicals aren’t really giving me a clear picture on this pair so I have decided to stay out for now until a better opportunity opens up.

I’m not really big into fundamentals but I feel that they are important to discuss. In this section I will be posting fundamental tidbits that I find interesting from various sources. If you find an article that you think would benefit everyone, please email me (Big Pippin) with your username, the article, and a link to where members can read the entire article.

Now onto the Fundamentals:
  • "Model Behavior"
    • Super Model Gisele Bundchen has decided that she wants to remain the world’s richest model by insisting that she be paid in almost any currency but the U.S. dollar! OK… Now the dollar has been officially dissed! Sure guys like Rogers, Buffett, Gross, Butler, Wiggin, and Bonner have dissed the dollar because of the fundamentals… But when a super model decides to side with us, well then we’ve got ourselves what I’ll call… "Model Behavior"!\
  • UK September retail sales saw the highest annual growth in 3 years:
    • The Office for National Statistics reported that retail sales in September rose 6.3 pct from a year ago, the highest rise since September 2004 and above analyst expectations for a 5.6 pct increase. In August sales rose 4.8 pct year-on-year, revised down from the earlier estimate of 4.9 pct.
News events to watch for tomorrow :
  • 8:30am EDT– US Non Farm Productivity

For a list of all of tomorrow’s news events, check out our Forex Calendar