Wednesday AM comments and Levels

01 July, 2009 by Stephen Leahy

Boston July 1 07:41 EST

Technical Levels for certain currency pairs

EUR/USD: Presently trading at 1.4064 bid
Resistance levels at 1.4092 and 1.4150.
Support levels at 1.3975 and 1.3920
We favor short EUR/USD positions.

USD/JPY: Presently trading at 96.88 bid
Resistance levels: 97.15 and 97.60
Support Levels: 96.20 and 95.50
Pair is currently (96.88) right at an inflection point with a strong move expected to come out of the 96.70 - 96.95 range. We favor long positions.

EUR/GBP: Presently trading at .8558
Resistance Levels: .8595 (important) .8620
Support Levels: .8526 and .8472
This pair has been in a range of .8425 - .8600 for a few weeks now. Playing the range means fading the current and going short near .8565. A breakout strategy will go long once .8600 is clearly breached and held. Much more upside potential (could target .8800) than downside (target .8450) but less chance of trade opportunity arrising.
We favor long positions.

Gold (presently spot bid 930.8) did not hold above our 943.50 level yesterday (see previous posting) so we expect more room on the downside for gold. Though as noted moves lower in gold have had shorter runs than moves higher for the past few months. We would be short term sellers of gold on a move higher this morning towards 935.0 using a Stop Loss order at 945.0 and a target levels of 919.5

We believe that the US Government's monthly Non Farm Payrolls data releases are becoming less important to global capital markets, but Thursday's release has the potential for sharp moves in the market. It is a "quick-release" month with the number coming out on the 2nd business day of the month, AND dealers on the money center desks are going to cut our early in the day. There will be large, chunky money flows across the big desks just after the data release and then the senior dealers will cut out for the holiday weekend. Watch for a very volatile Thursday morning.

Stay Nimble!

Stephen Leahy
Back Bay FX Services, LLC
www.backbayfx.com

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