Market Report Tuesday 22nd of June

You can see the full pdf format at this link: market report

Running a bit late on the report today, so will keep it short and sweet.
FOMC just held rates unchanged and signaled that rates will remain low for long, QE2 will expire at the end of the month, but they will reinvest the interest received from the holdings. Pretty much as expected and Bernanke will hold the press conference shortly. We have seen very little market reaction so far to the release.
http://www.bloomberg.com/news/2011-06-22/federal-reserve-to-maintain-record-stimulus-after-ending-asset-purchases.html

Bank of England minutes out earlier was pretty dovish and they signaled that they might need to provide more stimuli in form of bond purchases to help the recovery. GBP sold off pretty hard on the release and it now looks like we will test the 1.6050 key support near term.
http://www.bloomberg.com/news/2011-06-22/boe-voted-7-2-for-unchanged-rate-amid-pressure-for-further-bond-purchases.html

Corn trading limit down at the moment and getting crushed on more fund selling. Soybeans holding up a bit better, but we are now below the key support levels that looked attractive to get long, so be careful. The market is awaiting the USDA acreage report on 30th of June, which is the most important release this time of the year. I expect to see a rather large move on the release.

DOE crude inventories showed smaller than expected stockpiles, which is sending Crude oil futures higher.
We have key resistance at 95.50 that is the key level that we need to see a daily close above to open for move towards 98.50.
http://www.bloomberg.com/news/2011-06-22/crude-oil-fluctuates-in-new-york-before-u-s-supply-report-fomc-meeting.html


Looking at a few interesting points in the markets trading wise:
- Thursday’s low in the S&P futures at 1252 should hold near term and I look for a move to 1293 and possibly 1303. We have already reached 1293, so the next level is 1303 now. I expect to see sellers around 1293, so depends how the price action turns out in the area.
- Crude is a buy on dips above 91.50 I reckon for a move back towards 95.50, I said earlier this week (pretty much spot on)
- USDCAD is approaching the upper end of the recent range and looks like a sell towards 0.9850. Looking for a move back below 0.9700. Getting to a low of 0.9711 today, looking for 0.9650 now.
- Silver trading sideways over the last month, range 32.75 to 38.76.
- Gold is a buy towards 1530 today.




Technical’s and comments

Euro: The next level of key resistance is 1.4380 to 1.44, with last week’s high of 1.4496 as the big level to the upside for now. To the downside we have 1.4300, followed by 1.4250 and key support at 1.4150. This pair is very choppy and not my favorite market to trade at the moment. If I had to pick direction I would still look to sell rallies.
Cable: Key support at 1.6050 and resistance up at 1.6265. Still looks like a sell on rallies towards 1.6265. Selling towards 1.6265 worked out really well, down at 1.6110 now.
USDJPY: Very tight range over the last sessions. I remain longer term bearish on the JPY as the fundamental factors in Japan looks ugly, with huge public debt and unfavorable demographics going forward. However the risk off over the last days has taken us below 80 again. Not sure if we see any intervention unless the move picks up in speed and magnitude. Buy on dips for the brave.
Swissy: I expect the CHF to underperform Euro as the 1.20 EURCHF looks very rich in CHF terms. So maybe better to play Euro is negative on USD. Swissy is bearish below 0.8500 for now, looking for 0.8300
AUDUSD: RBA signaled that they were in no hurry to raise rates, but still not that much downside action. Buying dips towards 1.0550 looks the most attractive for now.
USDCAD: Still favor selling rallies for a move back below 0.9700. If we break above 0.9900 this view would be wrong I reckon.
S&P Future (ES): Expect the low from Thursday last week at 1252 to hold and we are testing the key resitance at 1293 now that we need to get above to extend the rally to 1303. If we fail here at 1293, we are heading lower again towards 1275 or so I reckon.
Gold: Next interesting level to re buy is around the 1530 level. So, I am waiting for lower level to get involved.
Crude oil: Buy on dips above 91.50 I reckon for now and looking for a rally towards the resistance at 95.50. Need to see a daily close above 95.50 to open for a extension to 98.50 near term. We have minor resistance at 96.30 as well.
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