Monday Thoughts and FX Charts to Watch This Week

“Money, it’s a crime” – Pink Floyd

Hello. Today was the second time in the last two trading days when I actually laughed while looking at the charts. Why? – Because the rating agencies are back in business, downgrading stuff here and there and, guess what? nobody cares: Fitch downgraded Spain’s rating on Friday and the EURUSD stayed bid, then Moody’s downgraded Greece today and the EUR pulled back 10-20 pips before rallying to 1.4030. Is the market smarter? Or am I too optimistic if I believe that nobody pays attention anymore to what the rating agencies have to say about [insert whatever asset/country here]?

In case you are not familiar to what their activity is – check this. Also this and this. This too. Well, there are thousands articles on the same topic – just check google. To sum it up in fewer words – their job was to assess risk before shit hitting the fan in 2008. According to them – everything was alright but surprise – we all know what happened. What are they doing now?

“Having completely missed the build-up of risk that led to the global financial crisis in 2008, the rating agencies are now competing with each other to be the first to identify risks that will lead to the next crisis,” the ministry said. – via Associated Press

I don’t know about you – but personally I wouldn’t bet a single dime on what these guys say. They missed the whole sub-prime mess and they missed the Euro-zone debt crisis. In fact, I’d bet that they’ll miss the next crisis, too.

Now let’s continue and check two EURUSD charts

A corrections seems possible now after last pullback from 1.4030 and a daily close below 1.3990 will provide a reversal candle, suggesting a correction down to 1.3850 where next important support resides. On a medium term basis, I think there’s more upside to be seen and now that we’ve got “this far”, October’s 1.4150 and 1.4280 seem easy to reach.

EURJPY

115 is still intact, providing resistance – and Friday’s pin bar favors selling at current levels, aiming to 114 on 1st phase – perhaps 113 later. Personally I’m looking for trend resumption signs as I prefer to play a breakout on the weekly charts – with an initial objective at 120.

EURGBP

.8650 is currently under pressure as the EUR is climbing higher against the GBP, recovering from February’s .8355. Above .8650 – next resistance, formed by a falling trendline on the weekly charts, comes around .8750.

Dollar Index

In the coming sessions, I’ll share more interesting setups to watch. I’ll also be back in half an hour to share some interesting readings.

Cheers! have a great week

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Post tags: Dollar, EURGBP, EURJPY, EURUSD, rating agencies, usd index