FX Technical Analysis

EURUSD

Comment: Having rallied for ten consecutive days hoping the Euro will do so yet again today might prove more than what it can cope with. It is overbought but a weekly close clearly above 1.4600 should keep bullish momentum at current levels.

Strategy: Buy at 1.4730/1.4700; stop below 1.4500. Add to longs on a break above 1.4775 for 1.5000 medium term and more long term.

Direction of Trade: →

Chart Levels:

Support	Resistance
1.4688 "	1.4768*
1.4642	1.48
1.46	1.4825
1.4561	1.49
1.4500*	1.5000*

GBPUSD

Comment: Messy and nasty and Cable drops below the Ichimoku 'cloud' while moving averages remain positive, though only a sustained break above 1.6750 will kick-start a short-squeeze. Until then allow for more random moves roughly around a central point at1.6350.

Strategy: Possibly attempt small longs at 1.6375; stop below 1.6300. First target 1.6545, then 1.6745.

Direction of Trade: →

Chart Levels:

Support	Resistance
1.6355 "	1.6454
1.6322	1.6535
1.6275	1.66
1.6185	1.6745*
1.6100*	1.684

USDJPY

Comment: Very nasty intra-day moves as we consolidate above this year's low at 90.12 and below the 9-day moving average. The US dollar is no longer oversold against the Yen and while bearish momentum has eased, one-month at-the-money implied volatility has not managed a sustained break above 14.00%.

Strategy: Attempt small shorts at 91.15; stop well above 91.65. Short term target 90.20/90.00, then 89.00 and probably a sudden push to 87.10

Direction of Trade: →

Chart Levels:

Support	Resistance
90.98 "	91.45
90.5	91.65*
90.18/90.00*	91.9
89	92
88.50*	93.3

EURJPY

Comment: Very messy as we stall at the upper edge of the daily Ichimoku 'cloud' and the 26-day moving drops suddenly. Hopefully this will limit the latest bounce and we shall drift back down to the bottom of the 'cloud'.

Strategy: Possibly attempt small shorts at 134.15; stop above 134.85. Add to shorts below 133.40 for 132.80 and then 131.00.

Direction of Trade: →

Chart Levels:

Support	Resistance
134.00 "	134.46
133.44	134.79*
133	135.02
132.8	135.5
131.00*	136.09*

Mizuho Corporate Bank

Daily Technical Analysis

EURUSD Outlook

The EURUSD made another moderate bullish momentum, topped at 1.4766 and closed at 1.4743. The bias remains bullish in nearest term with potential targets at 1.4825 (September 23 2008 high) and 1.4867 (September 22 2008 high). On h4 chart below we can see that the pair still trapped in the rising wedge area and we really have just a very little room left before the break. I think I will keep out from the market until we have a break from the rising wedge. The best place to put a long position is still around the rising wedge lower line but with only so little room left in the rising wedge, the risk-reward ratio is not too good at this phase. I know this situation really test our patient. It's clear that we are in bullish momentum and Dollar remains under pressure but I can not (and will not) ignore any potential reversal/correction signal. Immediate support at 1.4630 followed by 1.4550.

GBPUSD Outlook

The GBPUSD attempted to push higher yesterday, topped at 1.6567 but failed to break above my 1.6580 resistance area before whipsawed to the downside, bottomed at 1.6425 and closed at 1.6446. On h4 chart below we can see that the upper line of the bearish channel did a good job keeping the bearish scenario intact. The bias is bearish in nearest term targeting 1.6350 area (50% Fibo of 1.6113 - 1.6740) and the lower line of the bearish channel. CCI just cross the -100 line down on h4 chart suggesting potential further weakness for the Sterling. Immediate resistance at 1.6480 - 1.6500 area. Break above that area should lead us into no trading zone.

USDJPY Outlook

The USDJPY made another indecisive movement yesterday. However, on h1 chart below we can see that the trendline resistance (red) has been violated to the upside at the same time price is making a new bullish channel (blue channel) indicating potential further upside correction testing 91.80 key resistance area. As long as the pair stay below that area I still prefer bearish scenario, but I will stay out for now. Immediate support at 90.70. Break below that area should trigger further bearish pressure re-testing 90.20 key support area.

USDCHF Outlook

The USDCHF made another moderate bearish momentum, bottomed at 1.0275 and closed at 1.0281. Slowly but sure, the pair keep moving lower and now traded below 1.0300 area. The bias remains bearish in nearest term targeting 1.0210 area. I do not see any reversal/correction signal so far, so I am hoping further downside pressure. Immediate resistance at 1.0325 area. Break above that area should lead us into no trading zone and might go higher re-testing 1.0420 area

EURJPY Outlook

The EURJPY had a moderate bullish momentum yesterday, topped at 134.77 but closed lower at 134.25. On h4 chart below we can see that the pair can not consistently move above my 134.35 key resistance area and now struggling around that area. I still prefer a bullish scenario but we need consistent movement above 134.35 to keep us on the bullish track targeting 135.12 and 136.10 area. Immediate support at 133.50. Break below that area should be a potential threat to the bullish outlook

GBPJPY Outlook

The GBPJPY attempted to push higher yesterday, slipped above the trendline resistance (red) and topped at 151.18 but further bullish momentum was rejected as the pair whipsawed to the downside and closed lower at 149.77 and go back below the trendline resistance. The bias is bearish in nearest term targeting 149.02 - 148.60 key support area. Immediate resistance at 150.40. Break above that area should lead us into no trading zone.

AUDUSD Outlook

The AUDUSD bullish momentum was paused yesterday, which is normal for me as the pair seemed to consolidate after bullish momentum indicating by triangle on h1 chart below. The bias is neutral in nearest term but the bullish scenario clearly remains intact and short position is not recommended. Immediate support at 0.8674 which also a potential area to place a long position with a tight stop loss. Break below that area should lead us into no trading zone.

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Statement on Monetary Policy of Bank of Japan

September 17, 2009


1. At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period: The Bank of Japan will encourage the uncollateralized overnight call rate to remain at around 0.1 percent.

2. Japan's economic conditions are showing signs of recovery. Public investment is increasing, and exports and production are also increasing against a backdrop of progress in inventory adjustments both at home and abroad as well as a recovery in overseas economies, especially emerging economies. On the other hand, business fixed investment is declining mainly reflecting weak corporate profits. Private consumption, while there are some signs of a pick-up mainly attributable to the effects of various policy measures, remains generally weak amid the worsening employment and income situation. Meanwhile, financial conditions, with some severity lingering, are increasingly showing signs of improvement. The year-on-year rate of decline in the CPI (excluding fresh food) has accelerated mainly due to the prices of petroleum products, which are lower than their high levels a year ago, in addition to the substantial slack persisting in the economy as a whole.

3. The Bank's baseline scenario through fiscal 2010, in which expectations of medium- to long-term growth are assumed to remain generally unchanged, projects that the economy will start recovering from the latter half of fiscal 2009; this recovery will be supported partly by the positive effects of measures to stabilize the financial system and of fiscal and monetary policy measures, as well as by a recovery in overseas economies and improvements in conditions in global financial markets. With regard to prices, the year-on-year rate of decline in the CPI will likely accelerate somewhat for the time being. However, assuming that medium- to long-term inflation expectations remain stable, the rate of decline in the CPI is expected to moderate from the latter half of fiscal 2009 as the effects of the changes in theprices of petroleum products abate. If these developments continue, there are prospects for Japan's economy to return to a sustainable growth path with price stability in the longer run. However, the outlook is attended by a significant level of uncertainty stemming mainly from developments in overseas conomies and global financial markets.

4. While there are signs of a better-than-projected recovery in emerging economies, risks to the economy are still on the downside, stemming from future developments in the global financial and economic situation, as well as from changes in firms' medium- to long-term growth expectations. With regard to prices, there is a possibility that inflation will decline more than expected, if the downside risks to the economy materialize or medium- to long-term inflation expectations decline.

5. The Bank, paying attention for the time being to the downside risks to economic activity and prices, will continue to exert its utmost efforts as the central bank to facilitate the return of Japan's economy to a sustainable growth path with price stability.

ENERGY MARKET RECAP

October Crude Oil closed unchanged at 72.51. This was 0.85 up from the low and 0.65 off the high.

October Heating Oil closed up 1.54 at 184.12. This was 2.61 up from the low and 1.58 off the high.

October RBOB Gasoline finished up 0.25 at 185.08, 2.23 off the high and 1.83 up from the low.

October Natural Gas finished down 0.29 at 3.47, 0.43 off the high and 0.03 up from the low.

Technical Outlook
CRUDE OIL (OCT) 09/18/2009: Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 73.96. The next area of resistance is around 73.26 and 73.96, while 1st support hits today at 71.76 and below there at 70.96.

RBOB GAS (OCT) 09/18/2009: Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The close above the 9-day moving average is a positive short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 189.23. The next area of resistance is around 187.11 and 189.23, while 1st support hits today at 183.05 and below there at 181.12.

HEATING OIL (OCT) 09/18/2009: Positive momentum studies in the neutral zone will tend to reinforce higher price action. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The next upside objective is 188.05. The next area of resistance is around 186.21 and 188.05, while 1st support hits today at 182.03 and below there at 179.68.

PRECIOUS METALS RECAP

December Gold closed down 6.7 at 1013.5. This was 2.9 up from the low and 8 off the high.

December Silver finished down 0.165 at 17.265, 0.3 off the high and 0.055 up from the low.

Technical Outlook
COMEX SILVER (DEC) 09/18/2009: 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. The daily closing price reversal down is a negative indicator for prices. The market's close below the pivot swing number is a mildly negative setup. The near-term upside objective is at 1784.0. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1751.0 and 1784.0, while 1st support hits today at 1703.0 and below there at 1688.0.

COMEX GOLD (DEC) 09/18/2009: Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. The market could take on a defensive posture with the daily closing price reversal down. The market tilt is slightly negative with the close under the pivot. The near-term upside target is at 1031.6. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1022.4 and 1031.6, while 1st support hits today at 1007.2 and below there at 1001.3.

CURRENCY MARKET RECAP

December US Dollar closed up 0.005 at 76.480. This was 0.250 up from the low and 0.175 off the high.

December Euro closed up 0.16 at 147.38. This was 0.51 up from the low and 0.35 off the high.

December Japanese Yen finished down 0.29 at 109.77, 0.76 off the high and 0.58 up from the low.

December Swiss finished up 0.24 at 97.28, 0.11 off the high and 0.7 up from the low.

December Canadian Dollar finished up 0.02 at 93.81, 0.63 off the high and 0.13 up from the low.

December British Pound closed down 0.52 at 164.4. This was 0.16 up from the low and 1.28 off the high.

Technical Outlook
JAPANESE YEN (DEC) 09/18/2009: Momentum studies trending lower from overbought
levels is a bearish indicator and would tend to reinforce lower price action. The market's short-term trend is positive on the close above 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 108.49. The next area of resistance is around 110.45 and 111.16, while 1st support hits today at 109.12 and below there at 108.49.

EURO (DEC) 09/18/2009: Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The near-term upside target is at 148.20. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 147.82 and 148.20, while 1st support hits today at 146.96 and below there at 146.49.

STOCK INDICES RECAP

December S&P closed down 0.8 at 1062.7. This was 6.2 up from the low and 7.8 off the high. December S&P E-Mini finished down 0.75 at 1062.75, 8.75 off the high and 6.5 up from the low.

December Dow finished up 14 at 9739, 46 off the high and 54 up from the low.

Technical Outlook
S&P 500 (DEC) 09/18/2009: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The daily closing price reversal down puts the market on the defensive. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside objective is at 1077.25. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1070.00 and 1077.25, while 1st support hits today at 1056.00 and below there at 1049.25.

S&P E-MINI (DEC) 09/18/2009: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. The downside closing price reversal on the daily chart is somewhat negative. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 1078.56. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 1070.37 and 1078.56, while 1st support hits today at 1055.13 and below there at 1048.07.

NASDAQ (DEC) 09/18/2009: Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. The close over the pivot swing is a somewhat positive setup. The near-term upside objective is at 1739.75. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1729.50 and 1739.75, while 1st support hits today at 1710.50 and below there at 1701.75.

DOW (DEC) 09/18/2009: The market made a new contract high on the rally. 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. The daily closing price reversal down is a negative indicator for prices. The close over the pivot swing is a somewhat positive setup. The near-term upside objective is at 9797. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 9748 and 9797, while 1st support hits today at 9682 and below there at 9664.

BOND MARKET RECAP

December Bonds finished up 1-060 at 120-030, 0-060 off the high and 1-160 up from the low.

December 10 Yr Treasury Notes closed up 0-165 at 117-130. This was 0-250 up from the low and 0-035 off the high.

Technical Outlook
BONDS (DEC) 09/18/2009: A negative indicator was given with the downside crossover of the 9 and 18 bar moving average. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market now above the 18-day moving average suggests the intermediate-term trend has turned up. The market setup is supportive for early gains with the close over the 1st swing resistance. The next downside target is 118-050. The next area of resistance is around 121-030 and 121-180, while 1st support hits today at 119-130 and below there at 118-050.

10 YR TREASURY NOTES (DEC) 09/18/2009: Momentum studies trending lower at id-range should accelerate a move lower if support levels are taken out. The cross over and close above the 18-day moving average indicates the intermediate-term trend has turned up. The upside daily closing price reversal gives the market a bullish tilt. Market positioning is positive with the close over the 1st swing resistance. The next downside objective is now at 116-125. The next area of resistance is around 117-290 and 118-050, while 1st support hits today at 117-010 and below there at 116-125.