Bears Come Out Swinging And FX Pairs Go For The Ride

Yes, he’s cute and cuddly but he’s destroying the wallets of investors worldwide. So where’s the bull? He’s hanging out with the US dollar these days. Can’t seem to separate those two.

Today’s US retail sales confirmed bad news for the US and the move lower we were looking for yesterday came in strength today. The UK, Asia, Australia and Europe are following suit and currently trading significantly lower tonight. Tomorrow, the US faces CPI numbers which I would expect to come in lower than the current forecast given today’s data. Either way, investors are gripping back to reality of the current economic environment, and doing so quickly based on these selloffs. Keep selling on pullbacks has been the name of the game and I have no reason to change it as of yet. The next SPX target is at the 2002 lows of 770. This could get ugly, as if its not already.

Crude keeps on smashing through support levels and fundamental risk aversion taking over. Selling on pullback here, as well. Current place for new shorts could be around 79.00. Currently trading at 72.50. I have a report here from Goldman today looking to 62.00. I would say that's not far out of the question at this point.

Gold moving slightly lower as the dollar strengthens. At this point, I’m looking for that break of 823.00 I keep talking about. Eventually a break of the upward sloping diagonal trend line, seen from monthly charts.

The dollar index creeping higher and looking like it wants to bust 83.50. Next targets are 84.20, then 85.17.

Keep selling pullbacks on EUR/USD, GBP, AUD, etc. as well as USD/JPY. We could get a decent sized retracement tomorrow upwards, so I’m not ruling that out yet; the way other markets are reacting right now I’d say its about a it’s a possibility it could happen (we’re pretty stretched out right now downside – (oversold))…..either way I keep on looking for places to get in for some more holds on sells; might not happen until tomorrow. Some of the Euro levels are close together tonight but exercise good judgment around these areas and you should be fine. Stay away from the itchy trigger finger.

Levels:

EUR has sells at 1.3515-1.3533 (of these the higher seeming to be the most probable as I write this), 1.3555, 1.3610, 1.3690, buys at 1.3324, 1.3260, 1.3070, 1.2980
GBP has sells at 1.7390, 1.7425, 1.7515, 1.7626, buys at 1.7115, 1.7040, 1.6930, 1.6860, 1.6800
CHF has buys at 1.1410, 1.1365, 1.1300, 1.1250 sells at 1.1595-1.1605, 1.1620, 1.1700
JPY has sells at 100.95, 101.47, 101.90, 102.95, buys at 99.35, 98.50, 97.90, 97.70, 95.75