Market uncertainty and a string of data releases caused for negative markets in Europe Wednesday while investors in the US saw poor retail sales and other recession fears drive their market 300 points down one hour into the open. Forex markets echoed the uncertainty and were trading technically with ranges tightening across most major pairs.

With risk aversion still the major driving factor in the markets, the market desperately needs some stabilization. Monday, investors thought a globally coordinated bailout would be that stabilization, but with what is essentially a nationalization of banks amidst a global recession, the reality check is in. Will the government make the right investment decisions? When will consumers begin spending again? These questions should drive uncertainty and the markets lower and again, we look to play the flight to safety.

USDJPY – Channeling down to the 100 SMA on H1, the USDJPY could create a quality selling opportunity on a break as US markets continue to fall. Look for this pair to be the indicator of the rest of carry weakness. CADJPY is on pace to be the day’s biggest loser, however, as CAD weakness is driven by the fall in oil.

EURUSD – The 62 EMA on H4 has held as resistance for the EURUSD and a push through to 1.40 is not out of the question. However, a re-test of the lows at 1.3258 is just as likely. We look for a break of the 1.3785-1.3440 range before making a trade.

AUDUSD – The pair has followed similarly to USDJPY, channeling between the 200 and 100 SMA’s on H1. With markets down again, we will look to get in on the risk aversion momentum and sell past .6850 into Asia and early Euro.

_________________________
John Rowa
Executive Director of Trading
+1 951 823 0686 - Tel
+1 951 823 0687 - Fax
JRowa@IntegrityFXllc.com
www.IntegrityFX.com

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