USDCHF Daily Candle Trendline Break

This morning I woke up to this. As of 08:20 EST, the descending trend-line drawn from the September 6, 2013 highs has been violated in force with this daily candle. If the data this morning continues in favor of the USD, the next theoretical supply zone is 0.9180 where I have drawn the horizontal red line. I am still long for the time being and watching data and price into the close today. Looking back, the most recent FOMC meeting gave the dollar a shot in the arm. On the other side of this trade, the pair may fall due to profit taking, and the next 2 hours or so are key. Data for USD today:
                                                                               Actual        Consensus   Prev

08:58	USD		Manufacturing PMI	51.8	51.1           51.1
09:10	USD		FOMC Member Bullard Speaks
10:00	USD		ISM Manufacturing Index		55.0           56.2
10:00	USD		ISM Manufacturing Prices		55.0           56.5
10:30	USD		ECRI Weekly Annualized (WoW)		2.0%
17:00	USD		All Car Sales		7.53M
17:00	USD		Domestic Car Sales		5.30M          5.24M
17:00	USD		Total Vehicle Sales		15.40M        15.21M

USD/CHF Attempting Retrace above 0.9100

EUR/USD has fallen from the highs this morning on worse than expected IFO data, and is now below 1.3500 again, as this pair is inversely correlated to USD/CHF, the latter is moving up off of it's lows of .9080 from two days ago. 60 Minute chart:

Any long positions would probably want to keep a relatively tight stop below 0.9180-70, but an earnest breach of the 0.9100 handle would probably invite more sellers and stop-loss selling for a target of 0.90 or lower. On the other hand, a move above 0.9120 would target the 0.9130-35 highs of September 23, 2013, beyond which we have 0.9175 or the 0.250 %  Fibonacci retracement of the post FOMC drop from September 18, 2013 after the lack of Fed Tapering in September was announced. Going long here makes sense if 0.9130 is taken out convincingly for a move back above 0.92 in the next day or two. I am long from 0.9110 with a small position.

AUD/USD and AUD/JPY Trade Update - Bulls Win with Announcement of "QE Infinity"

With the announcement of the United States Federal Reserve announcing QE3 (link to bloomberg.com) with a pledge to continue asset purchases until the US economy improves, the USD has lost quite a bit of value in the course of a single trading day. My estimate, looking at my quote sheet is about 1 - 1.5 cents against everything so far.

I have a couple of trades on AUD/USD and AUD/JPY, long on both, prior to the FOMC meeting and press conferences, doing fairly well on average. After the announcement, it was quite a fight but both pairs have put in some impressive highs for the week, and the corrections (thus far) seem to be muted.

I am currently waiting on both of these positions to see if they have the potential to reach my first targets of 1.06 on AUD/USD and 82.00 on AUD/JPY, though I may have to wait to see what the Asian Session brings.

Yesterday's FOMC Statement - Perfect Storm for USD and JPY

No time for editing and posting my charts today. The big news this week is that the FOMC (the Fed) kept rates at present levels and set the expectation for low rates for the foreseeable future as they must or the U.S. economy will tank before it even begins to recover. The news every currency trader was waiting for was the Fed's purchase plan, and they decided against ending their purchase plan prematurely and even extending it, and acknowledged that the economy has stabalized out of it's free fall - well, we knew that last May, but they have to be conservative with their assesments. Equities futures are pushing up over yesterday's gains, Light Sweet Crude is up on the day over 71, Gold is back up above 955, and positive GDP figures came out of Germany and France. The only thing left to discuss is the data coming out at 12:30 GMT for the US, including Import Price Index, Retail Sales, and Initial Jobless Claims.

Seems like the USD is about to slide a bit today, but we'll see. The contrarian in me tells me this is not going to happen and will reverse at some point, but when you see a trend, resistance lines broken, and the probabilities point in a direction, you go with it. I do think a correction is going to happen, but waiting for the right time is crucial as optimism abounds. My advise regarding a potential reversal if you have the cajones, is to wait for a -ve catalyst (bad news) and to either have very tight stops or a lot of unused margin to absorb the push up and wait for the bounce. If I were very smart yesterday and on Monday, I would be long on both gold (was but lost $40 in a matter of seconds when the 950 support gave way down to 943) and silver (Jim Rogers play from weeks ago - I should have just bought weeks ago!), but I'm already abusing my margin as it is; I'm long in one of the Yen crosses, and some other risk currencies including AUD/USD (an indirect gold play), with an emphasis on GBP (contrarian reversal play from last weeks BOE extension of quantitative easing and the recent lows of this week), but I'm still slightly skeptical as always, and I need to do more research on precious metals trading...sounds like a project for a couple of weekends.

Buying EUR/USD Near Up-Trend Support Zone / July 29, 2009 Beige Book is Less Worse

The Fed's Beige Book came out today, and although the expectation was for a very downbeat tone, the actual contents are - as I expected, less worse than expectation.

"Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level. Five Districts used the words "slow", "subdued", or "weak" to describe activity levels; Chicago and St. Louis reported that the pace of decline appeared to be moderating; and New York, Cleveland, Kansas City, and San Francisco pointed to signs of stabilization. Minneapolis said the District economy had contracted since the last report."

Full report:
Beige Book

Playing the contrarian angle, I am currently long for several contracts for the EUR/USD, which is trading at lows (so far) of the session and in-and-around the support zone I discussed in my last post, in anticipation of some (hopeful) short covering in the next 24-36 hours after the less-than-apocalyptic report that just hit the wires. Mind you, that I still need to do a bit more than skim the report myself. The consensus seems to be that major support comes in at about 1.3750/1.3850, and that short term support is near 1.3980-1.4000 which has held as of this posting. My stops are well below major support in anticipation for the usual risk aversion that has characterized the Asia session over the last few weeks. I fully anticipate more downward movement but so far as of 18:54 GMT (14:54 EST), the selling of EUR/USD has moderated but the risk is still palpable with the S&P hovering near 970. I am hoping to ride this as a swing trade over the next few days, with modest targets of 1.4180, 1.4220, and possibly another attempt at the 1.4300, but subject to change as always. I will be watching the chart for the next few hours to see the end of the New York session and I will be updating again soon.