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