Archive for category: Uncategorized

Year 2013 could mark the medium/long-term low for the U.S. weekly jobless claims. Over the past 4 years, jobless claims trended lower from 680K levels to 330K levels. This is a significant improvement given the magnitude of the historical swings on this economic time series data. U.S. weekly jobless claims reached an important trend support and if this trend line acts as support as it did in 2000 and 2006, we should expect higher levels in the last quarter of the year. Breakdown below this trend line at 320K levels could help the jobless claims ease towards the horizontal support at 280K.

S&P GSCI (Commodity Index) is in a clear downtrend. Well-defined downward sloping trend line acts as strong resistance at 655 levels. Over the past two years trend line acted as strong resistance and each counter trend reaction reversed from the strong trend resistance. It is now clear that a breakout above this technical level will reverse the medium/long-term downtrend. I continue to watch commodities with a negative technical outlook but also keep a close eye on this strong trend resistance in case we see a sharp reversal and a decisive breakout above 655 levels.

Emerging market equities are challenging their long-term moving averages. Breakdown below these critical long-term support levels could result in sharp corrections. Since the first quarter of 2013 we have seen weakness in emerging market currencies and their equity indices. Thailand was one of the best performing emerging market over the past 4 years. Though a correction could be as sharp as the upward trend. SET Index is now testing the 4 year-long trend line support and the 200-day moving average. Breakdown below these strong support levels could result in a deep correction towards 1,100 levels. USD/THB is already off its lows and well above its 200-day average. Strong support area for the USD/THB is between 30.4 and 30.8. Current technical outlook is negative for Thai Baht and the Thailand SET Index. Unless the equity index recovers above 1,500 levels, downward pressure will remain intact.

After a long break on markets (as I have been enjoying being a father for the first time) I’m back with a blog update on an exciting range breakout in the emerging asia currencies. USD/MYR is trying to breakout from a 2 year-long consolidation range. This pair has been on my watch list for some time. I like these type of flat range breakouts. In this example USD/MYR moved between 3.00 and 3.20 levels for almost two years and over the same time period the crossrate tested 3.20 levels for 4 times. We can see that with this week’s price action, USD/MYR is challenging the same resistance. A decisive weekly close above 3.20 will confirm the breakout and push the crossrate towards 3.30-3.35 area. For the bullish outlook to remain intact USD/MYR should hold above 3.20 levels in the following weeks.

It’s been an eventful month so far in Istanbul. Anti-government protests resulted in a sharp sell-off in Borsa Istanbul. Protests can continue for sometime and markets can stay volatile. While it is difficult to understand the price action during these type of event-driven markets, support/resistance levels could be helpful in managing risk. XU 30 index slipped below its long-term (200 day) average at 97,200. This was also the lower boundary of the upward trend channel. Failure to push above the long-term average will be a clear sign of weakness and could result in further downward pressure towards 76,000-91,500 range. The uptrend that has been intact since the beginning of 2012 is damaged and for us to discuss positive price action and improving technical outlook, the index should breach above 97,200 levels in the following weeks.