Providio's Daily Futures Market Commentary For July 3, 2012

SEP 13 EURODOLLARS:

Support: 99.525: Support level back to 6/20

99.515: 4/3 & 5/2 highs, settlement on 6/15, support on 6/18, low on 6/21

99.500: high trade from 4/12-4/19 & 4/26-4/27, low from 5/1-5/4, settle on 5/7

99.490: high trades on 6/7 & 6/11
Resistance: 99.535: high on 6/18 & 6/19, settlement on 6/20

99.555: high trade on 6/20

99.560: 2/3 and 3/2 highs and mid-August support.

99.570: 9/21/11 & 3/2 high trade.

Comment: Today's positive action is in the context of a broader negative move in our primary directional indicators.

BUNDS (German 10-yr): Bunds seem to be in a consolidation mode near a support level. Some increase in Volume seen.

Support: 141.50: general support and resistance inflection area since 6/13 lows.

140.00: resistance in late April and early May

Resistance: 142.45: 5/14 & 5/16 highs, support & resistance inflection 5/17-5/23

Comment: Technically, Bunds are shifting to a less overtly negative bias. Trend is showing signs of bottom and Momentum's negative bias is decelerating. Rate of Change is rising but that has been slowing. With the RSI bouncing out of the Oversold conditions from last week, some moderating of the recent negative bias is in place. However, Tuesday's material rise in Volume on reversal action is a poor sign for the Bunds. Look for failure at technically significant levels.


SCHATZ (2-yr):

We saw another fall in Volume in the continuing positive follow-through from last week's post summit rally.

Along with the U.S. Twos, the Schatz falling will end up being counter to official policy desires so we have our doubts as to any negative bias sustainability.

Support: 110.50: psychological level

110.445: support in early April.

110.355: resistance in late March/early April, at various times support or resistance going back to late December.
Resistance: 110-59: resistance zone in early April, support and resistance inflection in late April/early May, support on 6/6, resistance on 6/14 & 6/15

110.625: 6/25 high and 6/11 low

110.6756/8 settlement and level of declining trend line drawn from 6/6 high.

Comment: Schatz's technical pressure is now shifting to with Trend and Momentum having already or about to turn positive. This is in keeping with Central bank policy.
Disclaimer: The information presented in this report is taken from sources we believe to be reliable and accurate. This information is not guaranteed as to accuracy or completeness. The opinions expressed are based on our best judgment at the time of writing and are subject to change without notice. These opinions should not be construed as an inducement or advice to enter into any Futures or Options on Futures transaction except where explicitly stated. There is risk of substantial loss in trading futures and options. One's financial suitability should be considered carefully before placing any trades. Past performance is not indicative of future results.

Providio's Daily Futures Market Commentary For June 13, 2012

CURRENCIES:
Futures Last Trade: June 18June; Sep: 17Sep
Opions Last Trade: July: 06July; Aug: 03Aug; Sep: 07Sep
13June We shorted the June British contract after strength dissipated at our noted falling trend line resistance (1.5600) that extends back to 24May high (1.5725), a brief stopping point in the decline. We are risking to last Thursday's high (1.5635).
Another relatively quiet consolidation day ahead of what we mostly see as "event risk". We seem to be back at the mercy of the headlines with events in Europe unfolding at a torrid pace and the FOMC meeting on 20June.
Our rising Rate of Change indicators have flipped many of our Momentum to a more US Dollar negative dynamic. This should be watched closely. We add another factor (or in this case, "formations") to yesterday's list of dynamics across the sector that has us tilting US Dollar bullish:
· NEW: We are starting to see some evidence of flag, pennant or triangle formations. This typically indicates a continuation of the larger move if prices can break out on stronger Volume.
· Volumes are stronger on the moves to the upside.
· The recent strength has taken most of our tracked majors off extreme Oversold conditions. The "middling" nature of our indicators may open the door for another round of selling.
· The last time our Momentum indicators turned (US Dollar negative; FX positive), it was a short-lived consolidation that gave way to a continuation of the previous trend.
See below for specific market details, although they have not changed much.

AUSSIE$: 13June A Doji Candle, consolidation of the recent gains today.
Today's high registers a triple top since 07June, or if extended back to 16May, a rising wedge in a falling market, although rising trend line support is rather steep (current level 0.9870). In any case, the par (0.1000) level looms as resistance.
This area also aligns with our noted 38.2% retracement (1.0005) of the Mar-May decline and has fallen back toward recent settlement levels around 0.9900. Old support from mid April (1.0142) should offer new resistance and also aligns with a 50% retracement.
Our Rate of Change continues to rise, turning back a very early hint that the recent positive turn in our Momentum indicator may be slowing. We remind readers that the last time we saw a positive turn in our Momentum indicator, in mid April, the currency essentially consolidated with a modest upward bias before another substantial leg to the downside. Our Rate of Change should offer initial signs when/if this may be happening again. The one difference that we will note this time around is that the "turn" has been much steeper.
In what is becoming bigger picture, the recent lows (0.9565 on 01June) lie in a zone that traces back to support from last November. If it the previous negative tone reinstates itself, look for a sustained move lower on stronger Volume to break this major support area and target the 0.9000 level.
Seasonal Snapshot (cash): The 5-year pattern's upward bias extends until the end of July.
The 15&30yr patterns chop much higher until 20June, and then both fall out of bed throughout the rest of the month.

BRITISH: 13June
We shorted the June contract after strength dissipated at our noted falling trend line resistance (1.5600) that extends back to 24May high (1.5725), a brief stopping point in the decline. We are risking to last Thursday's high (1.5635).
The 1.5600 level aligns with old support (now new resistance) from mid March, then again in late May and also clusters with the 38.2% retracement (1.5660) of the April to May decline.
A break below rising trend line support (1.5450) that from the recent low (1.5267 on 01June) that forms the lower end of what may be a pennant, may kick off another large move to the downside, perhaps as low as 1.4600.
The falling 21-day moving average (1.5610) crossed below the falling 200-day (1.5750) and should be a drag going forward and cap strength. A sustained rally through this area targets the series of previous highs (1.5715 on 29May and 1.5847 on 22May).
We remind readers that our Momentum indicator has flipped positive this morning after being negative since early May, the first sustained period of our previously unstable indicator since the positive turn from mid Jan to mid Feb. We are watching our Rate of Change indicator closely.
Seasonal Snapshot (cash): The 15yr pattern rallies until 20June while the 5&30yr patterns consolidate with an upward bias.

CANADIAN$: 13June Quiet consolidation of the recent gains that have probed above, but are still generally capped by the falling 21-day moving average (0.9740). The fact that this average has crossed below the now falling 200-day (0.9880) should continue to offer pressure.
Sunday night's rally probed above (0.9792), but leaves a triple top in place that extends back to 29May. Rising trend line support forms the lower boundary (0.9670) of an ascending triangle. A sustained break below targets the 0.9200 area. Initial stops should be around the series of previous lows: 9497 on 25 Nov and finally, 9367 on 04Oct.
Our shorter-term charts show that Volume has been stronger on the spikes down.
Seasonal Snaphot (cash): All three patterns consolidate wildly until the end of June.

DOLLAR INDEX: 13June A first glimpse shows us that the Dollar Index is the only currency product we see with stronger Volume today.
That said, the market is still in our noted bull flag formation, bound by 81.25-82.70. A break out below reveals two potential outcomes:
1. The shorter-term rally from 81.025 (21May) may continue to 83.70.
2. The longer-term rally from 78.685 (30Apr) may continue to 87.70.
Sunday night's dip found support at our noted previous peak (81.93), which also aligns with a 38.2% retracement of the Apr-May rally.
Our Rate of Change, which pulled our Momentum indicator negative last week, is still falling. If this indicator acts like it did throughout the first part of the year, it may mean instability (for the indicator) and consolidation (for the index) lie ahead.
We remind readers that downside risks include plenty of gaps to fill all the way down to 79.615 (04May).
Seasonal Snapshot (cash):: All three patterns exhibit a positive bias until15June. Then the 5yr's weakness until early Aug is much more pronounced than the 15&30yr's consolidation with a downward bias.

EURO-FX: 13June Euro Industrial Production was better, but still negative and there is no inflation. A subsequent lurch higher prolongs the recent period of wild consolidation. Volume seems to have fallen off again today.
Unfortunately, borrowing costs rose at European debt auctions. The currency has struggled with the falling 21-day moving average (currently 1.2565) and may cap more strength. Falling trend line resistance comes in at 1.2670 and the previous highs (1.2826) were made on 21May.
The 01June bullish engulfing pattern, signaling a potential reversal of the recent large losses, is still in effect. The trouble is that the prior day was a Doji Candle, which waters down the pattern. The possibility of more bailouts (is Italy next?) and more stimulus has been doing hand-to-hand combat with the recent weak data. Quite frankly, all eyes may very well be on Sunday's Greek election.
A break out below the lows (1.2288 on 01June) should target psychological support at the round pennies down to 1.2000. The June 2010 low was 1.1874 and the lower boundary of the falling channel that has been in place since May 2011 is at 1.1770.
Seasonal Snapshot (cash): The 5&15yr patterns consolidate and the 30yr pushes lower until the end of June.

YEN: 13June More quiet consolidation... perhaps in anticipation of this tonight's BOJ meeting which may yield some ideas about future asset purchases. Meanwhile, the IMF weighed in on the issue, noting that the Yen is overvalued and their economy needs more stimulus:
http://www.bloomberg.com/news/2012-06-12/i...ys-yen-is-......
Support lies at the recent consolidation lows (1.2540), then near the 12465 level, which was resistance going back to late February.
Our technicals are still tilting negative, but we are on guard for the recent highly correlated environment where US Equities rise and the Yen loses... and vice versa.
Seasonal Snapshot (cash): All three patterns consolidate with an upward bias until 20uly.

Disclaimer: The information presented in this report is taken from sources we believe to be reliable and accurate. This information is not guaranteed as to accuracy or completeness. The opinions expressed are based on our best judgment at the time of writing and are subject to change without notice. These opinions should not be construed as an inducement or advice to enter into any Futures or Options on Futures transaction except where explicitly stated. There is risk of substantial loss in trading futures and options. One's financial suitability should be considered carefully before placing any trades. Past performance is not indicative of future results.

Providio’s Daily Futures Market Commentary For June 6, 2012

06June Days like this test our mettle, but we are holding to it for now. Today’s highly correlated action accelerated the recent reversal of our Rate of Change indicators and did successfully pull some of our Momentum indicators along with more seemingly on the way. However, any turns like this since the wintertime have been short lived and essentially resulted in consolidation and a gathering of potential energy for a continuation of the larger move. The “Fedspeak” really ramps up tonight and tomorrow, where focus will surely turn to any hints at more stimulus in the U.S. We tend to feel the Fed will be forced into another round of QE as pressures mount. Unfortunately, we will be hostage to the headlines once again… Currencies: 06June More hints at intervention and accommodation has eased the Overbought US Dollar conditions. Volumes were stronger, but not explosive.
Our rising Rate of Change indicators have flipped many of our Momentum to a more US Dollar negative dynamic. This should be watched closely. Additionally, we are back at the mercy of the headlines with events in Europe unfolding at a rapid pace and the FOMC meeting on 20June. In the interim, there will be plenty of opportunity for them to telegraph their next move.

Aussie: 06June Aussie GDP more than doubled expectations:
http://online.wsj.com/mdc/public/page/2_3063-globalEconom......
The bottoming action we have been noting seems to be taking hold That said, as we noted yesterday, the last time we saw a positive turn in our Momentum indicator, in mid April, the currency essentially consolidated with a modest upward bias before another substantial leg to the downside. Keep an eye on our Rate of Change for signs when/if this may be happening again.
Today’s rally has taken the market above the falling channel that has been in place since 30Apr and above the previous highs (0.9885), which is near near the 5/15 low and the 5/21 high. A sustained move higher targets the 38.2% retracement (1.0005) of the Mar-May decline. Old support from mid April (1.0142) should offer new resistance and also aligns with a 50% retracement.
The recent lows lie in a zone that traces back to support from last November. Our noted bear flag formation from last week is losing some of its luster on some sloppy chart action. If it the pattern reinstates itself, look for a sustained move lower on stronger Volume to break this major support area and target the 0.9000 level.
Seasonal Snapshot (cash): The 5-year pattern’s upward bias extends until the end of July.
The 15&30yr patterns chop much higher until 20June, and then both fall out of bed throughout the rest of the month.

British: 06JuneMore counter-US Dollar recovery has the currency recovering off its lows and easing well off ots recently Oversold conditions. We may call “close enough” for the second objective for our previous bear flag formation. The ultimate target from the 4/30 peak (550 points) was near 1.5225. As noted, this is where support held on reversal moves in early October and mid-January. It may again, as the Sterling remains was in extreme Oversold conditions (10) and may be entering a consolidation phase after steep losses.
Old support mid March, then again in late May, around 1.5600 may offer new resistance. The falling 200-day moving average comes in at 1.5755.
Seasonal Snapshot (cash): All three patterns fall until 09June. The 15yr then rallies until 20June while the 5&30yr patterns consolidate with an upward bias.

Canadian: 06June The lower Bollinger Band (-2STD at 0.9555) was the brake for the recent weakness. The currency has added to yesterday’s gains in a big way. Watch the 29May high (0.9792) on more strength.
A continuation of our previously noted bear flag formation targets the 0.9200 area. Initial stops should be around the series of previous lows: 9497 on 25 Nov and finally, 9367 on 04Oct.
Seasonal Snapshot (cash): All three patterns consolidate wildly until the end of June.

Dollar Index: 06June More negative action is confirming Friday’s action forming a bearish engulfing Thursday’s Doji candle. While this may not be all that strong of a signal and Volume is not setting the world on fire, we remind readers that there are plenty of gaps to fill all the way down to 79.615 (04May).
Today’s action fell through the old resistance from late May (82.60). Sustained weakness through this area may target the previous peak (81.93), which also aligns with a 38.2% retracement of the Apr-May rally.
Our falling Rate of Change has pulled our Momentum indicator negative. If this indicator acts like it did throughout the first part of the year, it may mean instability (for the indicator) and consolidation (for the index) may be ahead.
Seasonal Snapshot: All three patterns exhibit a positive bias from02-15June. Then the 5yr’s weakness until early Aug is much more pronounced than the 15&30yr’s consolidation with a downward bias.

Euro-FX: 06June Much like the Dollar Index (in reverse), Friday’s action forged a bullish engulfing pattern, signaling a potential reversal. The trouble is that Thursday was a Doji Candle, which waters down the pattern. Volume was stronger, but has been suspect ever since.
The possibility of bailouts and more stimulus from the powers-that-be have trumped weak Euro GDP and German Industrial Production releases this morning. The ECB kept rates unchanged and Draghi noted that they stand at the ready to help, if help is needed.
Bigger picture, the Euro has and probably will probably remain under pressure so long as the political crises continue to roil the Euro-zone. This leads us to believe the currency may be entering a consolidation phase.
The currency has broken out above falling trend line resistance (1.2500) that forms the upper boundary of a falling channel that had been in place since 01May. The falling 21-day moving average at 1.2640 may cap more strength. The previous highs (1.2826) were made on 21May.
A sustained move lower should first target psychological support at the round pennies down to 1.2000. The June 2010 low was 1.1874 and the lower boundary of the falling channel that has been in place since May 2011 is at 1.1770.
Seasonal Snapshot: The 5&15yr patterns consolidate and the 30yr pushes lower until the end of June.

Yen: 06June The Yen has lost its toehold above its 200-day moving average (1.2730) and our technicals are losing their positive luster.
Support remains near the 12465 level, which was resistance going back to late February and the rising 200-day moving average at 1.2600).
Watch the release of Machine orders tonight and tomorrow night’s GDP.
Seasonal Snapshot: Modest weakness in all three patterns will turn positive for a week on 1May, then consolidation into the first part of June.

Metals:
Gold: 06June The August contract has broken out above this week’s low Volume consolidation into a mini bull flag and is currently testing falling trend line resistance (1636) that has been in place since the $90 drop on 29Feb. A break out above would sustain Friday’s break out above our previously noted symmetrical triangle. Both are looking to be occurring on stronger Volume. If the pattern plays out, it would ultimately project a rally above 1700.
That said, currently at 73, our RSI indicator has catapulted off previously developing Oversold conditions, but there is still room to go higher.
Bigger picture, we see a giant descending triangle formation that extends back to the Sep 2011 high (1923.7). The bounce off our noted support level at the 26Dec low (1523.9) registers a triple bottom, aligning with the previous low (26Sep 1535). Stay tuned for updates.
Below is a slippery slope to 1500 psychological support, then a cluster of lows between 1462.5 (02May) and 1478.3 (27June). The 38.2% retracement of the Oct 2008- Sep 2011 rally comes in at 1456.8.
Seasonal Snapshot: The 15 & 30 yr patterns sag until 14June. The 5yr pattern consolidates until 06July.

Copper: 06June With recent global economic data pointing to a slowing economy, Copper has benefited as expectations ramp up for action by some or all of the global central banks.
Technically, Monday’s probe to the downside found support at the –2STD below the 21-day moving average. This lower Bollinger Band (currently at 3.2580) has acted as a brake on any sell offs. Our Rate of Change indicator has been rising for the last two sessions and is about to pull our shaky negative Momentum indicator back to a positive bias. We remind readers that when this indicator has been negative for most of this year. After four attempts since March, the positive turn in late April/early May did not last long and could not yield a higher high for the move.
Old support on two moves to 3.3800 should offer new resistance. Additionally, falling trend line resistance that has been in place since the lower high on 01May comes in at 3.4030.
An additional negative dynamic is the falling 21-day moving average (3.4600) is accelerating below the 200-day (3.6420), but may be relegated to the background if central banks start acting.
Seasonal Snapshot: The 5&15yr patterns are decidedly weaker until 09June. The 30yr is in consolidation mode with a slight downward shift until 16June.
Disclaimer: The information presented in this report is taken from sources we believe to be reliable and accurate. This information is not guaranteed as to accuracy or completeness. The opinions expressed are based on our best judgment at the time of writing and are subject to change without notice. These opinions should not be construed as an inducement or advice to enter into any Futures or Options on Futures transaction except where explicitly stated. There is risk of substantial loss in trading futures and options. One's financial suitability should be considered carefully before placing any trades. Past performance is not indicative of future results.

Providio’s Daily Futures Market Commentary For May 29, 2012

Currencies: 29MayWith this week's Employment report, there is some doubt as to how much directional action the FX markets will present. With all kinds of bad issues now coming forth from the Euro-zone, this morning's rally in risk-on currencies was somewhat surprising. However, continuing bad news tended to push the risk-off bias later in the morning. This bias has accumulated as the continuing crappy housing numbers from the US were joined by a horrendous Consumer Confidence miss. A worrisome observation we’re seeing again is one where the risks are seen as “well contained”, a constant comment for the last several years. As risks bubbles up, it is commented on as “manageable” or “nothing to worry about”, and then at some later point, it is seen as out of control in some way.

Aussie: 29May With indications of slowing economic activity in Asia, the Aussie is likely to remain under some pressure.
Today's failed breakout rally seems to have the Aussie back under some pressure. The early rally failed to make it to .9900 and the 5/22 high. If this failure holds, look for the Aussie to trade under .9800,and test the bear flag formation from last week. Support should be at about .9775, which is near today's low. It was also the support and resistance from the previous 6 sessions, acting as a high or low trading area. The next major support area should come in near .9705-.9710, where the market found traction from 5/23-5/25.
Resistance is seen at .9885, just above today's high, and near the 5/15 low and the 5/21 high.
Seasonal Snapshot (cash): The 5-year pattern’s upward bias extends until the end of July.
The 15&30yr patterns chop much higher until 20June, and then both fall out of bed throughout the rest of the month.

British: 29May Today's action is seen as intra-day bearish failure. Failed to breakout above yesterday's and Friday's highs and subsequently headed materially lower.
We continue to see the previously noted flag/pennant formation, with several possibilities for future developments. Both levels project measured moves to technically significant areas:

Based on either the 3-day plunge (350 points) the move could project to 1.5425. This level roughly correlates to where support was prevalent in late November through mid-December.
Based on the complete decline from the 4/30 peak (550 points), the move could project a move to near 1.5225. This is where support held on reversal moves in early October and mid-January.

In either case, this market seems to be setting up for a material move to the downside.
We took a short position last week at 1.5700, using risk at a 1.5755 stop.
Volume continues its tendency to be stronger on the move to the downside. It broke below the 1.5635 support, and since making new lows has rebounded to just below that level.
Failure to get back above1.5635, makes it likely we'll see one of the above bearish formation scenarios play out.
Seasonal Snapshot (cash): All three patterns have a quite negative bias until the end of May.

Canadian: 29May Today's action, despite the higher trade and settlement, retains its negative profile with the market clearly failing by not remaining above .9775.
Se see the .9775 level as significant resistance level as the Loonie has traded around this level since first finding support there on 5/18. We believe resistance will be seen at .9700, bot a round number psychological level and where the market bounced off from 5/23-5/25.
Failure to hold there and the Loonie is likely start pressuring the falling -2 STD below the 21-day moving average, currently at .9645. This is whee the market has found a “brake” on further action to the downside.

Our technicals remain quite negatively biased, with Trend and Momentum both clearly negative. Our Oversold measure has bounced from 10 to 21 and should still be watched closely. To this end, the Loonie bounced off a probe to the –2 STD (0.9710) below the 21-day moving average (0.9985) again.
On more weakness, watch the series of previous lows: 9711 on 13Jan; 9675 on 9Jan; 9582 on 19Dec; 9497 on 25 Nov and finally, 9367 on 04Oct.
Seasonal Snapshot (cash): All three patterns have a choppy, negative bias until 26May. The 30yr’s is more protracted than its shorter-term counterparts.

Dollar Index: 29May Another probe to new highs as the DX failed to succumb to early selling and ended up modestly higher on the day. The chatter is now on the news about there being a lack of dollar based high quality investments due to capital leaving Europe with their ongoing debt crisis. Any further deterioration of the Euro-zone crisis will add to the safe-haven demand for Treasuries and US Dollars.
Again, our technicals remain quite positive, but another leap higher in our already toasty Overbought measure (currently 90) is still well short of the 97 registered on 16&17May.
Support below 81.00 is difficult to see with clarity, as there are so many trade gaps below the market since the latest rally began. 80.35-80.40 would be the first level we’d recommend watching. This is where the market failed to go higher in early/mid-April.
Bigger picture, we remind readers of our past comments:
“Watch for any evidence the Dollar is not the safe haven under crisis market conditions. This would change existing assumptions dramatically.”
Seasonal Snapshot: The 15&30yr patterns consolidate in choppy fashion until the end of May. The 5yr declines during this period.

Euro-FX: 29May General debt crisis conditions abound. Greek exit issues are now joined by stories of a feared bank run starting in Greece and spreading to Spain.
Quite negative technicals are now joined by today's bearish reversal action. Early highs were firmly rejected and materially lower levels, both relative and nominal, prevailing. Ominously, today's highs failed just 2 ticks from the January lows. Today's lows are quite close the highs from way back in June 2010. That should suffice for near-term support at this juncture. Below that look for the -2 STD below the 21-day moving average(currently 1.2397).
As we have noted, the break below 1.2700, has given way to much lower pricing. A sustained move lower should first target psychological support at the round pennies down to 1.2000, maybe as low as 1.1500. The June 2010 low was 1.1874.
Resistance lies above near 1.2800. This is both a psychological level and the recent highs..
As we stated on 5/10, the Euro has and probably will probably remain under pressure so long as the political crises continue to roil the Euro-zone.
Seasonal Snapshot: The 5&15yr patterns consolidate and the 30yr pushes lower until the end of June.

Yen: 29May The Yen again assumes the mantle of safe-haven as it has for several months now. Today's action is indecisive on a directional basis and its RSI bears this out, sitting at 53. Pricing levels are basically sideways with a very modest upward bias since 5/1.
If the Dollar Index’s behavior last Summer is any indication of the Yen’s future, the BOJ will likely be back at the window in the near future. Last Summer’s S&P downgrade of US debt was followed by a 9% rise in the DX.
Support remains near the 12465 level, resistance going back to late February. Resistance is just below at old support and the recent highs (1.2600).
Seasonal Snapshot: Modest weakness in all three patterns will turn positive for a week on 1May, then consolidation into the first part of June.
Disclaimer: The information presented in this report is taken from sources we believe to be reliable and accurate. This information is not guaranteed as to accuracy or completeness. The opinions expressed are based on our best judgment at the time of writing and are subject to change without notice. These opinions should not be construed as an inducement or advice to enter into any Futures or Options on Futures transaction except where explicitly stated. There is risk of substantial loss in trading futures and options. One's financial suitability should be considered carefully before placing any trades. Past performance is not indicative of future results.

Providio’s Daily Futures Market Commentary For May 17, 2012

Currencies: 17May See the Yen for analysis on today’s spike to the upside.
That said, we still maintain that Greece’s ongoing political turmoil has many commentators we’re hearing expecting Greece to leave the Euro. This uncertainty continues to drive capital into an extremely Overbought US Dollar. The “risk off” pressure to most of the major currencies is becoming a chronic dynamic of new lows and extreme Oversold conditions.
Watch for an announcement or “event” that reverses this dynamic (if only for a while) into a profit-taking US Dollar decline.
A worrisome observation we’re seeing again is one where the risks are seen as “well contained”, a constant comment for the last several years. As risks bubbles up, it is commented on as “manageable” or “nothing to worry about”, and then at some later point, it is seen as out of control in some way.

Aussie: 17MayWe maintain the validity of the comment we made recently about a bearish flag follow through: With indications of slowing economic activity in Asia, the Aussie is likely to remain under some pressure.
Longer term, it appears the Aussie may be looking at another material move lower. There is the break below the bear-flag in chart action and the 200-day moving average has rolled negative.
If the break below off the bear-flag plays out, classic analysis calls for a move of approximately .0600 points lower from near the break out point of 1.0240-1.0250. This would target somewhere in the area of 0.9650. This is very near the lows from 11/22/2012.
Volatility remains in the low average range and falling.
Lower lows point to a continuing bearish trend. Today’s high in the June contract is one tick below yesterday’s… a lower high by a hair.
Our technicals are very bearish across the board and the currency is in extreme Oversold territory (13). We continue to note that the action is still hugging the -2 STD (0.9829) below the 21-day moving average (1.0157).
Support is still seen at .9875, where is held in overnight trading before breaking down. Below that is the .9850 round number psychological level and then yesterday’s lows at .9838.
The latest negative pattern is showing accelerated falling action in comparison to the action from March through mid-April. This speaks to how rapidly events seem to be unraveling.
Resistance is seen at 0.9935, a double top from the last two sessions.
Seasonal Snapshot (cash): The 5-year pattern has a negative bias until 26May.
The 15&30yr patterns chop higher until 10May, then both fall out of bed throughout the rest of the month.

British: 17May Words of warning from U.K. Prime Minister about European debt contagion and his intentions to stick with austerity plans is keeping the Sterling on its heels:
http://www.bloomberg.com/news/2012-05-16/c...n-to-say-h......
The currency has retaken the now falling 200-day moving average (1.5820) after a probe below earlier this morning.
Since the Pound peaked on 4/30, it has been under relentless pressure, recently breaking out below the declining channel. The lower bound of that channel, near 1.6000, should be seen as a resistance level. Below that, 1.5950 is another resistance. The market tested near there in overnight action and once it fell to the lows, failed there this morning.
More weakness targets the 12Mar low (1.5601), but it may take a period of consolidation before it is reached… look for a bear flag or pennant formation with declining Volume.
Our technicals remain quite negatively biased, but be on guard against our Oversold and falling indicator (13). Volatility is Low but rising
Seasonal Snapshot (cash): All three patterns have a quite negative bias until the end of May.

Canadian : 17May Much like the Aussie$, its “commodity currency” counterpart, the Loonie is in an extreme Oversold (14) race to the downside.
The falling 200-day moving average (99.40) and falling trend line old support going all the way back to January should offer new resistance.
On more weakness, watch the series of previous lows: 9711 on 13Jan; 9675 on 9Jan; 9582 on 19Dec; 9497 on 25 Nov and finally, 9367 on 04Oct.
April Canadian CPI is on deck tomorrow morning.
This market is also now pressuring the –3 STD below the 21-day moving average as our Bollinger Bands expand in wild fashion.
Seasonal Snapshot (cash): All three patterns have a choppy, negative bias until 26May. The 30yr’s is more protracted than its shorter-term counterparts.

Dollar Index: 17May We still assert that the DX ascent rate is likely becoming unsustainable as the chart action looks to be going parabolic.Don’t be surprised if a near-term correction occurs. Our technicals are all pointing higher, but the Overbought level is extremely high at 97 as of this writing.
Trading is now in the area the market peaked back in mid-January. Resistance would be all the way up to 82.00, the upper bound of that same trading area.
Support below 81.00 is difficult to see with clarity, as there are so many trade gaps below the market since the latest rally began. 80.35-80.40 would be the first level we’d recommend watching. This is where the market failed to go higher in early/mid-April.
Bigger picture, we remind readers of our past comments:
“Watch for any evidence the Dollar is not the safe haven under crisis market conditions. This would change existing assumptions dramatically.”
Seasonal Snapshot: The 15&30yr patterns consolidate in choppy fashion until the end of May. The 5yr declines during this period.

Euro-FX: 17May More negative news, and more negative technical dynamics despite the near unchanged level as of this writing. Since failing to breach the 1.3300 resistance during the May Day holiday on 5/1, this market has been under relentless pressure.
The Euro has now fallen through all of our identified support levels. Currently, it has probed to new lows below the 1.2700 level, held and rebounded into the mid-January congestion area. The support level will again be 1.2700,and then below that to 1.2625, near the January lows. Resistance lies above near 1.2800. This is both a psychological level and an area that offered resistance back in January.
Of note, this market is extremely Oversold at 4. If some sort of “deal” is trotted out to “fix” the issues at hand, a material bounce may be in the cards.
The Greek political impasse continues to dominate the Euro’s news dynamics. As we stated last Thursday, the Euro has and probably will probably remain under pressure so long as the political crises continue to roil the Euro-zone.
Greece is the current issue at hand, but what happens when Spain or Italy ends up in the spotlight?
Seasonal Snapshot: The 5&15yr patterns consolidate and the 30yr pushes lower until the end of June.

Yen: 17May Yesterday’s Hammer Candlestick formation tested and held above support in the low 12400s. Support should be offered in this area going forward.
A better than expected GDP (+1.0% vs. +0.8% expected with a 0.2% upward revision to the previous quarter) squirted the Yen up through last week’s highs (1.2595). The high of the move so far tested rising trend line resistance (1.2640) that extends back the 01May high. Steeper rising trend line resistance back to the bottoming action seen in mid March comes in at 1.2700. We are wary of any signs of BOJ intervention on this current spike, as it wants a weaker Yen to maintain the Japanese economy’s currency competitiveness.
Seasonal Snapshot: Modest weakness in all three patterns will turn positive for a week on 1May, then consolidation into the first part of June.

Metals:

17May The Euro’s modest deceleration has metals staging their own rebound.

Gold: 17May Gold stopped falling and has seemingly bounced off our noted support level at the 26Dec low (1523.9). This general area may serve as a double bottom (maybe a triple bottom?), as well, aligning with the previous low (26Sep 1535). The current extreme Oversold conditions has us looking for real support or consolidation around this level. June seems to have found support at the –2 STD below the 21-day moving average.
Below is a slippery slope to 1500 psychological support, then a cluster of lows between 1462.5 (02May) and 1478.3 (27June). The 38.2% retracement of the Oct 2008- Sep 2011 rally comes in at 1456.8.
Volume looks robust, which would add validity to the negative action. This latest plunge lower is the largest extension below the 200-day moving average since the financial crisis in October 2008.
Seasonal Snapshot: All three patterns see modest strength into the last half of May.

Copper: 17May Copper’s fall has decelerated after Monday’s plunge. It’s still falling, just a more sustainable pace now. Unless the U.S. Dollar stops rising, it’s not likely to stop falling entirely.
Technicals remain negatively predisposed. Despite its deceleration of recent falling action, the negative bias is still profound. With most global economic news coming in as disappointing, Copper is likely to remain under pressure.
The July contract continues to ride the important –2 STD (3.4625) below the 21-day moving average (3.6880). Additionally, it is below the 3.5775 level established during mid-April’s move below the 200-day moving average (currently 3.6930), as well as rising trend line support that extends back to the 03Oct low (2.9940). On more weakness, watch the double bottom from 05&09Jan around 3.3800, then the series of previous lows back to last Nov (3.3250; 3.2325; and 3.2040).
Resistance is seen at 3.6250, where a candlestick chart showed bottoming action in mid-April.
Seasonal Snapshot: All three patterns have a mild upward bias until turning decidedly weaker around 27May.