There's an old boating expression that says, "You never want to set sail at low tide."
EWI had this maritime mantra in mind when it recently launched the May 18-26 Forex FreeWeek. During that specific 7-day period, the technical waters beneath the world's leading currency markets were high enough to ensure smooth sailing for the near-term "boats" of opportunity.
Down Under, Aussie Dollar Up
A May 26 San Francisco Chronicle article said: "Today's stronger than expected [business investment] data is very much the reason for the higher Aussie dollar bias." One problem: The Aussie Dollar's "higher bias" began one day BEFORE said data broke.
"Until [a move beneath critical support] occurs, the risk remains of a new high above 1.0584."
Now, the May 26 CSS presents a telling close-up of the Aussie Dollar versus the Relative Strength Index to show whether momentum confirms the latest push up.
"Sterling" Call for British Pound
The recent rally was not on the mainstream agenda. A May 23 news report said: "The slowing recovery in the UK continues to dampen the outlook for sterling." (Associated Press)
"With the fresh new low, the decline has continued but is probably near an end. We'll allow for a correction of the decline to 1.6308 but nothing more."
In a follow-up, the May 25 7:47 AM CSS said:"Prices would have to get above 1.6254 to warn of a new high above 1.6308 to come." By late evening, prices did in fact get above the cited level to open the floor to new highs.
Now, CSS reveals whether sterling will continue to soar.
Eureka, "Euro"ka!
A May 26 International Business Times news source proclaimed: "Euro rallies on hawkish sentiment" after the European Central Bank president promised a "careful monitoring" of inflation. One problem: The recent euro rally got started on May 23.
"Weakness has pushed the market to new intraday lows. The euro should bottom above the wave (1) peak at 1.3863 ... perhaps starting a rise."
US Dollar Direction
With the future of the commodity sector (and thus higher food prices) hanging in the buck's balance, all eyes are on the next dollar move. According to a report by Reuters, that move has yet to be determined: "The market is waiting on some clear direction on where the dollar is headed."
"The dollar is still a difficult call, but when I'm asked whether a peak and reversal has been confirmed, the answer" is clear.