This text is from blog famous currency strategist Joel Kruger .
KEY LEVEL TO WATCH – There really isn’t all that much to talk about on Wednesday, with no compelling short-term fundamental developments, and markets mostly still not really going anywhere at the moment. Still, all this could change real fast, and the key level to watch today is EUR/USD 1.2800. The level represents the October 1 low, and a break and close below would likely open the door for an acceleration of Euro declines. More broadly speaking, a break below 1.2800 would likely open the door for a widespread currency and equity depreciation (USD appreciation) as risk off trading themes build on the momentum from the previous day.
See Joel Kruger daily forex technical analysis video :
KEEP AN EYE ON THESE CROSS RATES – Some markets that I think are worth keeping an eye on are the EUR/CHF cross, with any dips below 1.2100 seen as a formidable opportunity to build into a meaningful long position, and the EUR/AUD cross, with the market having pulled back a good deal from recent highs, and likely to soon carve out a fresh higher low ahead of the next major upside extension beyond 1.3000. Also of note are USD/JPY and USD/CAD. While the two pairs are completely non-correlated, I like the idea of being long USDs against both the Yen and Canadian Dollar.
LONG-TERM CYCLICAL STUDIES – USD/JPY has been predominantly locked in the 78.00′s over the past several weeks, but eventually, risks seem to be tilted to the upside as the market contemplates the formation of a longer-term base off of the record lows from 2011. Meanwhile, longer-term USD/CAD cyclical studies also favor significant upside ahead, and any additional pressure on the commodity bloc resulting from deteriorating China fundamentals, should act as a catalyst for a surge in this pair. While Canadian Dollar setbacks might not be as pronounced as Australian Dollar weakness during this time frame, the less painful yield differentials in the long USD/CAD trade make this play more palatable.
EQUITIES OF INTEREST
Fidelity National Financial, Inc. (NYSE: FNF)
Perhaps this ticker is getting a little too far ahead of itself, with the market exceptionally well bid over the past several weeks. Technical studies are not only well stretched on the daily charts, but also warn of a healthy corrective pullback on a medium-term basis. Tuesday’s bearish close could be the first sign of such a reversal, and the recommendation would be to look to book profit on existing longs if you are currently in the position. Look for a pullback towards the $20 are over the coming sessions, while rallies should be very well capped below $23 on a daily close basis.
