John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: nspolar who wrote (9599)	7/7/2008 5:59:06 PM
From: John Pitera	Read Replies (2) of 33421

Some of the commodity proxy currencies such as the CAD and the AUD have been running out of steam. The CAD has gone into a side ways trading pattern since the spike low in Oct of 2007. The USd/CAD looks like it could break out to the upside of the trading range of the past couple of months. And the AUD has been losing some of it's momentum. Naturally that has been helping to stabilze the USD index. The big story is that the EUR/JPY has continued to march higher since the real financial market tumult of March 17th and March 20th..... ( just about the time that Bear Sterns was blowing up) The Eur/JPY made to spike lows just below 152.00 on March 17th and then the 20th. Since then the global markets have been a bit more resceptive to looking for higher yields/higher risks...... Not so much in equities obviously. I'd say the big question is can the EUR/JPY break north of the 168.80-90 area by any meaningful measure both in terms of price and time. ( a close over 170 and then have it hold above the 168.70 level for several days.) If that happens it would be more bullish for risk assets. However, with even David Darst of Morgan stanley commenting about another 10 % down in US stocks, coupled with the continuing implosion in creditland.... witness FRE and Fannie I'd say the Eur will start to be sold off against the JPY once again. SO that all makes for a muddy relatively trendless mire for the US index. Which is probably just fine, why should the USD do anything to make anyone happy or unhappy just now.? gotta run, more tonight or tomorrow. John

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