FuturesPulse Market Recap

***BOND MARKET RECAP - 9/29/2009
December Bonds finished up 0-060 at 121-200, 0-070 off the high and 0-240 up from the low.

December 10 Yr Treasury Notes closed up 0-035 at 118-095. This was 0-160 up from the low and 0-020 off the high.

Technical Outlook
BONDS (DEC) 09/30/2009: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's close above the 9-day moving average suggests the short-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 122-130. The next area of resistance is around 122-010 and 122-130, while 1st support hits today at 121-030 and below there at 120-160.

10 YR TREASURY NOTES (DEC) 09/30/2009: A positive indicator was given with the upside crossover of the 9 and 18 bar moving average. Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 118-235. The next area of resistance is around 118-180 and 118-235, while 1st support hits today at 118-005 and below there at
117-200.

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***STOCK INDICES RECAP - 9/29/2009
December S&P closed down 4.2 at 1054.8. This was 1.4 up from the low and 10.7 off the high. December S&P E-Mini finished down 4.25 at 1054.75, 11 off the high and 1.5 up from the low.

December Dow finished down 53 at 9675, 95 off the high and 5 up from the low.

Technical Outlook
S&P 500 (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal down is a negative indicator for prices. The close over the pivot swing is a somewhat positive setup. The next downside target is now at 1045.13. The next area of resistance is around 1061.04 and 1069.32, while 1st support hits today at 1048.95 and below there at 1045.13.

S&P E-MINI (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The close below the 9-day moving average is a negative short-term indicator for trend. The daily closing price reversal down is a negative indicator for prices. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 1044.25. The next area of resistance is around 1060.25 and 1069.25, while 1st support hits today at 1047.75 and below there at 1044.25.

NASDAQ (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market tilt is slightly negative with the close under the pivot. The next downside target is 1692.00. The next area of resistance is around 1728.00 and 1742.00, while 1st support hits today at 1703.00 and below there at 1692.00.

DOW (DEC) 09/30/2009: Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 9693. The next area of resistance is around 9766 and 9782, while 1st support hits today at 9722 and below there at 9693.


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***CURRENCY MARKET RECAP - 9/29/2009
December US Dollar closed up 0.085 at 77.355. This was 0.330 up from the low and 0.380 off the high.

December Euro closed down 0.17 at 145.73. This was 0.52 up from the low and 0.73 off the high.

December Japanese Yen finished down 0.55 at 110.91, 0.72 off the high and 0.21 up from the low.

December Swiss finished down 0.24 at 96.5, 0.52 off the high and 0.42 up from the low.

December Canadian Dollar finished up 0.19 at 92.19, 0.47 off the high and 0.65 up from the low.

December British Pound closed up 0.83 at 159.51. This was 1.28 up from the low and 0.38 off the high.

Technical Outlook
JAPANESE YEN (DEC) 09/30/2009: A crossover down in the daily stochastics is a bearish signal. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market's close below the pivot swing number is a mildly negative setup. The next downside target is 110.11. The next area of resistance is around 111.37 and 111.96, while 1st support hits today at 110.45 and below there at 110.11.

EURO (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is now at 144.53. The next area of resistance is around 146.34 and 147.02, while 1st support hits today at 145.10 and below there at 144.53.


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***PRECIOUS METALS RECAP - 9/29/2009
December Gold closed up 0.3 at 994.4. This was 8.3 up from the low and 2.8 off the high.

December Silver finished down 0.017 at 16.178, 0.072 off the high and 0.158 up from the low.

Technical Outlook
COMEX SILVER (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is 1586.3. The next area of resistance is around 1633.5 and 1648.2, while 1st support hits today at 1602.5 and below there at 1586.3.

COMEX GOLD (DEC) 09/30/2009: Declining momentum studies in the neutral zone will
tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 981.5. The next area of resistance is around 999.0 and 1003.6, while 1st support hits today at 988.0 and below there at 981.5.


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***ENERGY MARKET RECAP - 9/29/2009
November Crude Oil closed down 0.16 at 66.68. This was 0.86 up from the low and 0.65 off the high.

November Heating Oil closed up 0.39 at 172.36. This was 1.98 up from the low and 1.06 off the high.

November RBOB Gasoline finished down 1.06 at 164.00, 2.12 off the high and 1.46 up from the low.

November Natural Gas finished up 0.03 at 4.86, 0.12 off the high and 0.26 up from the low.


Technical Outlook
CRUDE OIL (NOV) 09/30/2009: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 65.12. The next area of resistance is around 67.43 and 68.13, while 1st support hits today at 65.93 and below there at 65.12.

RBOB GAS (NOV) 09/30/2009: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside objective is 160.59. The next area of resistance is around 165.79 and 167.74, while 1st support hits today at 162.21 and below there at 160.59.

HEATING OIL (NOV) 09/30/2009: A negative indicator was given with the downside crossover of the 9 and 18 bar moving average. Momentum studies are declining, but have fallen to oversold levels. A negative signal for trend short-term was given on a close under the 9-bar moving average. The close over the pivot swing is a somewhat positive setup. The next downside target is 169.09. The next area of resistance is around 173.88 and 175.17, while 1st support hits today at 170.84 and below there at 169.09.

Weekly Technical Commentary

USD/JPY

Chart Levels:

Support 88.60..88.00..87.00..86.65.
Resistance 89.75..90.00..91.35..92.55

This week: ↘
This month: ↘

One of the lowest weekly closes this year sent the dollar tumbling against the Yen in Asia this morning. This month we expect a test of the 87.00 area, a level that held miraculously in December and again in January. The bounce from today's low at 88.23 is impressive, but unlikely to stem the flow for more than a week (and maybe not even for the rest of the day). Over the coming month we continue to favour a series of cautious downside tests of key support between 87.00 and 1995's 85.00 (below which it spiked to a low 79.75 over a three month period). A baptism by fire for the incoming regime and an unwelcome headache to add to a long list of woes. Note this is a Yen move as crosses also look set for a drop.

EUR/USD

Chart Levels:

Support 1.4550..1.4500..1.4400..1.4290.
Resistance 1.4700..1.4768..1.4845..1.4900.

This week: →
This month: ↗

Last week's 'doji' suggests some instability at current levels and the need for consolidation. Therefore allow for corrective work under 1.4845, possibly down to the nine-week moving average at 1.4443, this week and maybe the following one also. One-month at-the-money implied volatility is still trying to base against the 10.00% level, and should eventually pick up towards 16.00% over the coming month or two. A weekly close clearly above 1.4700 is needed to increase upside pressure resulting in another round of generalised US dollar weakness. Note that the weekly Ichimoku 'cloud' has a flat top until the end of this year so will not help the Euro higher. However, the nine-week moving average has nudged it up since May.

GBP/USD

Chart Levels:

Support 1.5770..1.5685..1.5500..1.5260.
Resistance 1.6000..1.6235..1.6400..1.6500.

This week: →
This month: ↗

Breaking below the 'neckline' of an irregular 'head-and-shoulders' top, dropping towards the 26-week moving average and 38% Fibonacci support. We shall continue to allow for a sudden sharp drop to the 1.5575 area, and no lower than 1.5275. The drop should end suddenly, probably with a 'spike low'. Note that this corrective move lower should will be difficult to trade and will eventually see a resumption of what we feel is the long term trend to a higher Cable. Because the weekly Ichimoku 'cloud' is so very large we could easily hold inside here until year-end. One-month at-the-money implied volatility rallied from 10.65% and should move on up to 14.50%. Good futures volume Thursday and Friday suggest much speculating.

EUR/GBP

Chart Levels:

Support 0.9190..0.9040..0.8955..0.8880.
Resistance 0.9304..0.9340..0.9430..0.9500.

This week: →
This month: →

Higher again, trading above the top of a good-sized weekly Ichimoku 'cloud' as moving averages cross to bullish. The highest close since March 2009 and above a potential enormous 'flag' – which is usually a continuation pattern. The implications are too awful to contemplate as conservative measured targets from this pattern would be 1.0300 and a squeeze to 1.1000 a possibility. Hard to swallow, yes, but when the central bank governor starts talking down his currency who knows what might happen next. The only ray of hope for those holding pounds is that the weekly Ichimoku 'cloud' drops from mid-November and becomes nothing early February 2010. Cold comfort, indeed.

EUR/JPY

Chart Levels:

Support 129.84..129.00..128.00..127.00.
Resistance 131.85..133.00..134.40..135.50

This week: ↘
This month: ↘

Over the last month all currencies have lost ground against the Yen. After trying the upside three times since April, failing in the 138.00 area, the EUR/JPY chart now has a potential 'triple top' or poor 'head-and-shoulders' pattern. Testing trendline/neckline support this morning, ahead of the pivotal 128.00 area. A weekly close below here targets the bottom of the very large flat-topped Ichimoku 'cloud' and then more. Investors should allow for a move back down to 115.00 and possibly the all-time low at 112.08 January this year. Note that very long term prices are expected to trade broadly sideways for another six months, so that a dip below 112.00 (if at all) should be brief; picking interim highs and lows still a difficult task.

GBP/JPY

Chart Levels:

Support 141.00..139.75..139.00..138.00.
Resistance 143.00..146.60..148.65..151.40

This week: ↘
This month: ↘

Sterling lost 6.7% against the Yen this month weakening across the board. Here, the 'double top' at 162.50 led to a break below the huge weekly Ichimoku 'cloud'. Moving averages have yet to turn bearish but should do so on a close below 140.00. Our measured target remains at 130.00. Below 129.00 on a first attempt is considered highly unlikely, though note that moves below here are likely to be complex and very sharp. We cannot rule out a re-test of the all-time low at 118.80 of January this year because we expect protracted and complex downside testing over many months. One-month at-the-money implied volatility has rallied strongly from a low at 12.85% suggesting short-covering by overly aggressive market makers.

Mizuho Corporate Bank

FuturesPulse Market Recap

***BOND MARKET RECAP - 9/28/2009
December Bonds finished up 0-180 at 121-140, 0-050 off the high and 0-210 up from the low.

December 10 Yr Treasury Notes closed up 0-065 at 118-060. This was 0-105 up from the low and 0-015 off the high.

Technical Outlook
BONDS (DEC) 09/29/2009: The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend. Rising stochastics at overbought levels warrant some caution for bulls. The market's short-term trend is positive on the close above the 9-day moving average. Market positioning is positive with the close over the 1st swing resistance. The near-term upside target is at 122-130. The next area of resistance is around 122-050 and 122-130, while 1st support hits today at 121-080 and below there at 120-180.

10 YR TREASURY NOTES (DEC) 09/29/2009: Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance. The near-term upside target is at 118-205. The next area of resistance is around 118-165 and 118-205, while 1st support hits today at 118-025 and below there at 117-240.


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***STOCK INDICES RECAP - 9/28/2009
December S&P closed up 20.9 at 1062. This was 18.2 up from the low and -1.1 off the high. December S&P E-Mini finished up 18.25 at 1059.25, 1.75 off the high and 23.5 up from the low.

December Dow finished up 111 at 9730, 30 off the high and 95 up from the low.

Technical Outlook
S&P 500 (DEC) 09/29/2009: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market's short-term trend is positive on the close above the 9-day moving average. The outside day up is a positive signal. There could be more upside follow through since the market closed above the 2nd swing resistance. The next downside target is now at 1028.70. The next area of resistance is around 1072.10 and 1079.10, while 1st support hits today at 1046.90 and below there at 1028.70.

S&P E-MINI (DEC) 09/29/2009: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The close above the 9-day moving average is a positive short-term indicator for trend. The outside day up and close above the previous day's high is a positive signal. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next downside target is 1028.57. The next area of resistance is around 1071.87 and 1079.06, while 1st support hits today at 1046.63 and below there at 1028.57.

NASDAQ (DEC) 09/29/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. A positive signal for trend short-term was given on a close over the 9-bar moving average. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next downside objective is 1672.75. The next area of resistance is around 1744.50 and 1760.75, while 1st support hits today at 1700.50 and below there at 1672.75.

DOW (DEC) 09/29/2009: Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The close below the 9-day moving average is a negative short-term indicator for trend. The upside daily closing price reversal gives the market a bullish tilt. The close over the pivot swing is a somewhat positive setup. The next downside target is 9539. The next area of resistance is around 9702 and 9736, while 1st support hits today at 9604 and below there at 9539.


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***CURRENCY MARKET RECAP - 9/28/2009
December US Dollar closed up 0.205 at 77.220. This was 0.500 up from the low and 0.260 off the high.
December Euro closed down 0.62 at 146.02. This was 0.4 up from the low and 1.17 off the high.

December Japanese Yen finished up 0.26 at 111.55, 1.86 off the high and 0.12 up from the low.

December Swiss finished down 0.32 at 96.85, 0.76 off the high and 1.63 up from the low.

December Canadian Dollar finished up 0.46 at 92.02, 0.31 off the high and 1.08 up from the low.

December British Pound closed down 0.72 at 158.65. This was 0.99 up from the low and 1.01 off the high.

Technical Outlook
JAPANESE YEN (DEC) 09/29/2009: Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The market's close above the 9-day moving average suggests the short-term trend remains positive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside target is 113.95. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 112.52 and 113.95, while 1st support hits today at 110.55 and below there at 110.00.

EURO (DEC) 09/29/2009: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside target is 144.65. The next area of resistance is around 146.81 and 147.78, while 1st support hits today at 145.25 and below there at 144.65.


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***PRECIOUS METALS RECAP - 9/28/2009
December Gold closed up 2.5 at 994.1. This was 2.8 up from the low and 3.9 off the high.

December Silver finished up 0.135 at 16.195, 0.13 off the high and 0.175 up from the low.

Technical Outlook
COMEX SILVER (DEC) 09/29/2009: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market's short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal up is a positive indicator that could support higher prices. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside target is 1555.9. The next area of resistance is around 1648.7 and 1668.8, while 1st support hits today at 1592.3 and below there at 1555.9.

COMEX GOLD (DEC) 09/29/2009: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The market's short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was under the swing pivot. The next downside objective is now at 980.6. The next area of resistance is around 996.9 and 1003.1, while 1st support hits today at 985.7 and below there at 980.6.

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***ENERGY MARKET RECAP - 9/28/2009
November Crude Oil closed up 1.03 at 67.05. This was 1.64 up from the low and 0.49 off the high.

November Heating Oil closed up 1.72 at 172.37. This was 2.78 up from the low and 2.16 off the high.

November RBOB Gasoline finished up 1.55 at 165.15, 1.46 off the high and 3.47 up from the low.

November Natural Gas finished down 0.13 at 4.81, 0.16 off the high and 0.05 up from the low.

Technical Outlook
CRUDE OIL (NOV) 09/29/2009: The moving average crossover down (9 below 18) indicates a possible developing short-term downtrend. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market setup is supportive for early gains with the close over the 1st swing resistance. The next downside target is 64.64. The next area of resistance is around 68.11 and 68.89, while 1st support hits today at 65.99 and below there at 64.64.

RBOB GAS (NOV) 09/29/2009: Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. The market has a slightly positive tilt with the close over the swing pivot. The next ownside objective is now at 159.72. The next area of resistance is around 167.61 and 169.57, while 1st support hits today at 162.69 and below there at 159.72.

HEATING OIL (NOV) 09/29/2009: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. The close over the pivot swing is a somewhat positive setup. The next downside target is now at 167.28. The next area of resistance is around 174.84 and 177.15, while 1st support hits today at 169.90 and below there at 167.28.

U.S. International Reserve Position

The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $133,689 million as of the end of that week, compared to $127,008 million as of the end of the prior week.

Official reserve assets and other foreign currency assets (approximate market value, in US millions)

	September 11, 2009
A. Official reserve assets (in US millions unless otherwise specified) 1	Euro	Yen		Total
(1) Foreign currency reserves (in convertible foreign currencies)				133,689
(a) Securities	10,329	14,388		24,716
of which: issuer headquartered in reporting country but located abroad				0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF	15,012	7,012		22,024
ii) banks headquartered in the reporting country				0
of which: located abroad				0
(iii) banks headquartered outside the reporting country				0
of which: located in the reporting country				0
(2) IMF reserve position 2	12,819
(3) SDRs 2	57,821
(4) gold (including gold deposits and, if appropriate, gold swapped) 3	11,041
--volume in millions of fine troy ounces	261.499
(5) other reserve assets (specify)	5,268
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)	5,268
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other

Forex Technical Analysis

EUR/USD

Current level-1.4622

EUR/USD is in a broad consolidation, after bottoming at 1.2331 (Oct.28,2008). Technical indicators are neutral, and trading is situated above the 50- and 200-Day SMA, currently projected at 1.4134 and 1.3523.

The recent break below 1.4611 confirmed, that a larger corrective phase is on the run from 1.4842, targeting 1.4444 support. Intraday bias is slightly positive towards 1.4653, where a reversal should be expected, for next leg downwards, to 1.4493.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.4801	1.50+	1.4660	1.4611
1.4911	1.6040	1.4611	1.3746

USD/JPY

Current level - 89.53

A short-term bottom has been set at 87.12 and a large consolidation is unfolding since. Trading is situated below the 50- and 200-day SMA, currently projected at 94.86 and 94.84.

Recent break below 90.12 provoked a sharp sell-off towards 88.41, thus filling our target at 88.64 and currently the pair is in a corrective phase below 90.34, that should be followed by one more downward test of the 87.12 weekly low. Intraday bias is positive for 89.92 and 90.34 with a risk limit below 89.15. Current consolidation above 88.42 is expected to last minimum 4 trading sessions.

Resistance		Support
intraday	intraweek	intraday	intraweek
89.92	93.40	89.12	87.12
90.34	101.45	88.42	83.53

GBP/USD

Current level- 1.5872

The pair is in a downtrend after peaking at 1.7042. Trading is situated between the 50- and 200-day SMA, currently projected at 1.6454 and 1.5258.

Friday's minor consolidation was limited to 1.6050 in its attempt to test the important break below 1.6110 and the downtrend was renewed, reaching local bottom at 1.5766. Current bias is corrective in nature and we expect 1.5915 to limit the upside for the next leg downwards, to 1.5352 weekly support.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.5912	1.6130	1.5766	1.5352
1.6030	1.7042	---	1.50+

DeltaStock Inc. - Online Forex & Securities Broker

Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair was able to form a bearish technical pattern, seen in the image above, with a neckline at 1.4615. We expect the pair to decline on the intraday and short term basis, targeting 1.4360 before extending declines towards 1.4275. The stochastic indicator is showing oversold signs, which may result in a slight upside correction to retest the above mentioned neckline before continuing the expected decline, which will remain as far as 1.4765 is intact.

The trading range for today is among the key support at 1.4275 and the key resistance at 1.4845

The general trend is to the upside as far as 1.4135 remains intact with targets at 1.6000

Support: 1.4565, 1.4515, 1.4465, 1.4410, 1.4360
Resistance: 1.4615, 1.4700, 1.4755, 1.4790, 1.4845

Recommendation: Based on the charts and explanations above, our opinion is selling the pair from 1.4615 to 1.4500 and stop loss above 1.4705 might be appropriate.

GBP

The 23.6% correction limited further inclines for the pair, where it reversed to the downside to near the 38.2% correction for the bullish wave, seen in the image above. The short and medium term declines may face volatility near the current support at 1.5745, as momentum indicators show the possibility for a slight upside correction towards 1.5870 before reversing back to the downside towards 1.5555, as far as 1.6150 remains intact.

The trading range for today is among the key support at 1.5555 and the key resistance at 1.6235

The general trend is to the upside as far as 1.4840 remains intact with targets at 1.7100

Support: 1.5745, 1.5700, 1.5615, 1.5555, 1.5515
Resistance: 1.5870, 1.5940, 1.5975, 1.6040, 1.6125

Recommendation: Based on the charts and explanations above, our opinion is selling the pair from 1.5870 to 1.5745 and stop loss above 1.5940 might be appropriate.

JPY

The USD/JPY pair reached the expected downside target to hit the key support for the downside channel at 88.55, seen in the image above, where we expect the pair to incline on the short term basis towards 94.00; supported by positive signs on momentum indicators. The first resistance, which may be an obstacle for the pair is at 90.30, where a breakout of this level will open the way for today's target at 91.60. This incline remains as far as 88.50 is intact.

The trading range for today is among the key support at 88.00 and the key resistance at 94.70

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 89.35, 88.50, 88.00, 87.50, 86.95
Resistance: 90.30, 90.95, 91.60, 92.10, 92.55

Recommendation: Based on the charts and explanations above, our opinion is buying the pair with the breach of 90.30 to 91.60 and stop loss below 89.55 might be appropriate.

CHF

The Dollar versus Swissy pair continued to surge to the upside to touch the key resistance of the minor bullish channel that is taking the pair to the upside on the short term. From the image above, we see a minor resistance level is currently the neckline for a possible bullish technical pattern, which may reverse the pair to the downside in correctional movements to reach 1.0300, before rebounding to the upside and completing the pattern by breaching the 1.0365 level and open the way towards 1.0550. This incline is valid as far as 1.0365 is intact on the four hour charts.

The trading range for today is among the key support at 1.0000 and the key resistance at 1.0550

The general trend is to the downside as far as 1.1225 remains intact with targets at 0.9600

Support: 1.0300, 1.0260, 1.0205, 1.0135, 1.0080
Resistance: 1.0365, 1.0390, 1.0450, 1.0480, 1.0550

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.0300 to 1.0450 and stop loss below 1.0205 might be appropriate.

CAD

After retesting the previously breached neckline for the bullish pattern last Friday, the pair was able to rebound from 1.0850 nearing 1.1000, as expected. Momentum indicators are showing the pair within an overbought area, which may result in a slight downside correction towards 1.0920 before rebounding back to the upside on the intraday basis targeting the 161.8% and 176.4% extensions at 1.1080 and 1.1120 respectively, which will then complete a bearish harmonic pattern with a PRZ at the above mentioned levels. This incline is valid as far as 1.0830 is intact.

The trading range for today is among the key support at 1.0700 and the key resistance at 1.1220

The general trend is to the downside as far as 1.1870 remains intact with targets at 1.0300

Support: 1.0920, 1.0830, 1.0765, 1.0700, 1.0655
Resistance: 1.1045, 1.1080, 1.1120, 1.1150, 1.1200

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.0920 to 1.1080 and stop loss below 1.0830 might be appropriate

Ecpulse

Weekly Review and Outlook

Top 5	Current	Last	Change (Pips)	Change (%)
CADJPY	82.02	85.35	-333	-4.06%
GBPJPY	142.80	148.51	-571	-4.00%
GBPCHF	1.6378	1.6745	-367	-2.24%
AUDCAD	0.9473	0.9271	+202	+2.13%
GBPAUD	1.8361	1.8751	-390	-2.12%
Dollar
EURUSD	1.4694	1.4710	-16	-0.11%
USDJPY	89.57	91.28	-171	-1.91%
GBPUSD	1.5943	1.6270	-327	-2.05%
USDCHF	1.0274	1.0293	-19	-0.18%
USDCAD	1.0915	1.0688	+227	+2.08%
Euro
EURUSD	1.4694	1.4710	-16	-0.11%
EURGBP	0.9214	0.9040	+174	+1.89%
EURCHF	1.5095	1.5145	-50	-0.33%
EURJPY	131.61	134.29	-268	-2.04%
EURCAD	1.6030	1.5721	+309	+1.93%
Yen
USDJPY	89.57	91.28	-171	-1.91%
EURJPY	131.61	134.29	-268	-2.04%
GBPJPY	142.80	148.51	-571	-4.00%
AUDJPY	77.73	79.14	-141	-1.81%
NZDJPY	64.41	64.69	-28	-0.43%
Sterling
GBPUSD	1.5943	1.6270	-327	-2.05%
EURGBP	0.9214	0.9040	+174	+1.89%
GBPCHF	1.6378	1.6745	-367	-2.24%
GBPJPY	142.80	148.51	-571	-4.00%
GBPCAD	1.7401	1.7389	+12	+0.07%

Last week's developments showed further evidence that investors are moving away from risky assets as Fed is starting to pave the way for exit from stimulus measures. Stock staged a sharp reversal post FOMC with S&P closed the week at 1044, much lower than the intraday week high of 1080. Crude oil finally broke the medium term trend line support and dropped sharply lower to close at 66.02 level while Gold also lost the 1000 mark and closed at 992.4. The Japanese yen resumed prior rally and soared to new high against dollar and sterling, additionally supported by anti-invention comments from Japan. While sterling continued to be the weakest currency this month, canadian dollar is quickly catching up on the back of weakness in crude oil. Dollar staged a strong rebound after hitting new 2009 low and is starting to build up momentum for reversal.

G20 countries pledged in the financial statement to keep the economic stimulus support in place until sustainable recovery is assured. In addition, a framework was launched for acting together to rebalance economic growth, and establish tougher rules governing banks by 2012. Countries with significant deficits in their trade accounts promised to save more, while those with surpluses will strengthen domestic demand. The IMF will help them assess each others’ attempts to meet those objectives. The G20 leaders also agreed to phase out subsidies for fossil fuels in the “medium term,” without setting a deadline.

FOMC was the highlight of last week. Federal fund rates was unchanged at 0-0.25% as widely expected. Fed sounded optimistic on recovery and said the economy has "picked up following its severe downturn." The committee expects the current fiscal and monetary stimulus to support strengthening of growth and return to higher levels of resource utilization in context of price stability. Inflation is expected to remain subdued for some time. Also, Fed pledged to continue to "employ a wide range of tools" to promote economic recovery and preserve price stability. Rates are 'warranted" at the current exceptionally low level for an "extended period". Fed said that it will "gradually slow the pace" of $1.45T purchase of agency mortgage-backed securities and agency debt and expects it to be completed by end of 2010 Q1. Purchases of $300 billion in Treasury securities will be completed by the end of October 2009.

Later in the week, Fed said that it will scale back the emergency lending program and reduce the combined initiatives down from $450b to $100b by January and will evaluate whether to maintain the Term Auction Facility on a permanent basis and put out for public comment a “range of possible structures for a permanent TAF." Fed Warsh also said in an article in WSJ that policy normalization will likely begin before "it is obvious that it is necessary possibly with greater force than is customary" hinting that Fed might be aggressive in policy reversals. The events raised speculation that Fed is paving the way to exit from current stimulus programs.

Sterling was lifted briefly after BoE minutes revealed that the decision to keep rates unchanged, and more importantly keep the 175b pounds asset purchase program unchanged, was made by unanimous vote. Mervyn King and David Miles joined the unanimous vote after seeking 200b pounds in August and the switch argues that consensus is seen among the committee. The minutes said that "in absence of significant news about the medium term, the case for adjusting the program now was outweighed by the benefits of following through with the program."

However, later in the week, the pound tumbled sharply a news report saying that BoE is going to host a "crisis meeting" with major economists this Tuesday to discuss the quantitative easing program, raising speculation that a major change to the monetary policy framework would be announced. The news triggered renewed concern that BoE will be cutting the deposit rates. BoE Governor King said to a UK newspaper that Sterling's depreciation "will be helpful" to rebalance the UK economy to one that focused on exports, giving the green-light to further decline in the pound, in particular versus Euro.

On the data front, US durable goods orders dropped sharply by -2.4% in August. Existing home sales in US unexpectedly dropped to 5.10M annualized rate in August. New home sales rose slightly to 429k from downwardly revised 426k. Jobless claims dropped to 539k level. University of Michigan consumer sentiment was revised up to 73.5 in September. Eurozone PMI was mixed with manufacturing PMI missing expectation and rose to 49 only while service PMI rose slightly more than expected to 50.6 in September. German Ifo business climate rose less than expected to 91.3 in September. Canadian retail sales unexpectedly dropped -0.8% mom in July with ex-auto sales dropped -0.6%. New Zealand dollar was boosted by strong data during the week. Current account balance recorded first surplus in six years of 0.12b NZD. Q2 GDP showed the New Zealand economy unexpectedly got out of recession by growing 0.1% qoq.

Looking from the technical angle, dollar index dropped to new low of 75.83 but drew strong support from mentioned key level of 75.89 and rebound strongly. The case of reversal continued to build up but yet, there is no confirmation of bottoming with 77.09 near term resistance intact. Also, note that EUR/USD and AUD/USD are still holding above 1.4611 and 0.8589 support respectively while USD/CHF is staying below 1.0388 resistance. Reversal is also not confirmed in these pair yet.

Nevertheless, based on our view for further weakness in crude oil, stocks and possibly gold too, more upside in in favor in dollar in near term. As discussed before, the five wave sequence from March high of 89.62 is expected to complete after meeting 75.89 key support. Decisive break of 77.09 resistance will confirm that a short term bottom is at least formed and affirm this view and further break of 78.93 resistance will be the confirmation. We're treating whole price actions from 88.46 as consolidation to the up trend from 2008 low of 70.70 and break of 78.93 will be the first early signal that such long term up trend is resuming. But whether the long term up trend will resume or not won't change the view that strong rise should be seen to 81 level (38.2% retracement of 89.62 to 75.83).

The developments in other markets, expectation of some more weakness in crude oil and pull back in gold and stocks, also affirm our view in dollar. Crude oil's sharp fall last week finally has the medium term trend line support firmly broken. A medium term is at least formed at 75.0 on bearish divergence conditions in daily MACD and RSI. Further decline is anticipated in near term to towards 58.32 key support level. Break there will confirm that whole medium term rebound from 33.2 has completed too.

Gold moved further away from 1033.9 key resistance last week by dropping to 991.6 level. With daily MACD crossed below signal line, a short term top is at least formed and we're looking at the prospect of further pull back to 982 support or below. It's too early to judge how important the top at 1025.8 is. But in any case, there is little prospect of taking out 1033.9 key resistance in near term. Hence, the change for sharp selloff in dollar triggered by Gold's break of 1033.9 is little.

Looking at stocks, S&P 500's sharp reversal last week also suggests that it has topped out in near term at 1080. Bearish divergence conditions in daily MACD suggests loss of upside momentum and some deeper pull back is in favor to be seen with prospect of retesting 1000 psychological level which is in proximity to 55 days EMA and medium term rising trend line support.

Other than dollar, the development in Japanese yen should also be closely watched in near term. USD/JPY and GBP/JPY have both fallen to new low last week. In particular, GBP/JPY dived through 146.75 key support level and completed a double top reversal pattern. EUR/JPY, AUD/JPY and CAD/JPY are still holding above near term support of 131.00, 76.38 and 78.52 respectively but these levels should be taken out sooner or later. The yen will continue to be supported by further drop in treasury yield as seen with yield on 30 years T-bone dropping to closed at new low of 4.093 last week.

In particularly, note that CAD/JPY was indeed the biggest loser last week. The sharp fall in CAD/JPY sent itself through the medium term rising trend line support and indicates that whole rise from 68.38 has completed after touching 38.2% retracement of 125.52 to 68.38 at 90.20. Further fall is anticipated to have at test on 78.52 key support next and break there will be the first alert that long term down trend from 125.52 is resuming.

Another key development to watch in emerging market stocks, in particular in China. Aussie is so far quite resilient among the major currencies. However, resumed weakness in Chinese stocks will likely give the aussie much pressure which should at least trigger a short term reversal. Shanghai A shares composite's rebound should have completed at 3219.9 after last week's steady decline. Whole down trend from 3651 level should be resuming and we're looking at the prospect of a break of 2770 low in near term. If that happens, the AUD/USD should at least be dragged below 0.85 level while yen cross will tumble further on risk aversions.

Currency Heat Map Weekly View

	USD	EUR	JPY	GBP	CHF	CAD	AUD
USD
EUR
JPY
GBP

The Week Ahead

While initial focus will be on reactions to G20 statements, much volatility is anticipated as the week goes on an economic calendar jam-packed with important data. ISM Manufacturing index, Personal Spending and Non-Farm Payrolls are the usually important events to watch. One thing to note is that expectation on these data are getting higher when markets expect rise in ISM to 54, Personal Spending to grow 1.1% and Non-Farm Payroll to drop below -200k level. That leaves risk in markets reactions more to the downside in case of disappointments. Additional focus will be on speech of Bernanke and other Fed officials on their view and ideas on exiting stimulus policies.

• Tuesday: Japan CPI; UK GDP Final; Eurozone Confidence; US Consumer Confidence
• Wednesday: Japan PMI Manufacturing, Housing Starts; Australia Retail Sales; Germany Unemployment; Eurozone CPI Flash; Swiss KOF; US ADP, Q2 GDP Final, Chicago PMI; Canada GDP
• Thursday: Japan Tankan, Retail Sales; German Retail Sales, Eurozone PMIs Final, Unemployment Rate; Swiss SVME PMI' UK PMI Manufacturing; US Personal Income and Spending, ISM Manufacturing, Pending Home Sales, Bernanke Testimony
• Friday: Japan Employment; UK Nationwide House Price; Eurozone PPI; US Non-Farm Payroll, Factory Orders

GBP/JPY Weekly Outlook

GBP/JPY fell sharply to as low as 142.71 last week and the strong break of 146.75 key support confirmed medium term reversal. Initial bias remains on the downside this week and further fall should be seen to 50% retracement of 118.81 to 163.05 at 140.93 first. Break will target 61.8% retracement at 135.70 next. On the upside, above 145.41 minor resistance will turn intraday outlook neutral and bring consolidation. But recovery should be limited below 150.35 resistance and bring fall resumption.

In the bigger picture, break of 146.75 key support completed a double top reversal pattern (162.56, 163.05). This affirms our view that medium term rise form 118.81, which is treated as correction the larger down trend from 07 high of 251.90, has completed at 163.05 already, after failing to sustain above 55 weeks EMA. Fall from 163.05 is tentatively treated as resumption of the long term down trend and should now target a new low below 118.81. On the upside, break of 153.22 is needed to invalidate this bearish view. Otherwise, outlook will remain bearish.

In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Note that the fall from 215.87 is not treated as the fifth wave, but the third wave inside the third wave that started at 241.35. On resumption, the down trend will extend to 61.8% projection of 215.87 to 118.81 from 163.05 at 103.03 next.