- Currencies Markets Commentary -

June 14, 2010 (FinancialWire) (Investrend Information Syndicate) (Via Brewer Investment Group) (Overnight, June 13, 2010, Report) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — The U.S. Dollar traded higher against most major currencies on Friday, but lower for the week. Technically, the Dollar Index posted a weekly closing price reversal top which could lead to the start of a 2 to 3 week break if confirmed next week. The Dollar Index chart indicates there is room to retrace back to 84.92.

The EUR USD traded slightly lower after the four-day rally fell just short of a minor 50% price level at 1.2164. The daily chart indicates that a near-term break to 1.2014 is likely if selling pressure prevails. This price could prove to be strong support if traders try to form a secondary higher bottom.

On the upside, 1.2164 to 1.2233 continues to be an objective, but Friday’s daily closing price reversal top indicates that selling pressure may be building.

The weekly Euro chart paints a more upbeat picture as this market is poised to post a weekly closing price reversal bottom. Once confirmed, this pattern suggests a 2 to 3 week rally or a move to 1.2784.

The direction of the Euro next week hinges on trader perception of risk. Last week the Euro went through a relatively quiet period. Fed Chairman Bernanke helped to support the Euro by saying that the European Union has the means and the money to prevent a collapse in the currency, while European Central Bank President Trichet boosted the single currency by stating the ECB would not expand liquidity measures.

The British Pound traded sharply lower on risk concerns and bearish U.K. economic data. Last week’s three day rally fell short of testing a main top at 1.4769 and a 50% price level at 1.4810 before buying interest dried up. At the close this market was testing a short-term retracement zone at 1.4499 to 1.4435. This area must hold or the current secondary higher bottom pattern will be at risk.

The USD CHF finished higher, boosted by the lower Euro and thoughts of another round of Swiss Bank intervention. The downside target remains.1.1326 but the market may have to retrace to 1.1563 to 1.1603 before new selling pressure emerges.

The mixed trade in U.S. equity markets today caused a sideways trade in the USD JPY. For most of the day, this currency pair hugged at a major 50% price level at 91.61. This price is acting like a pivot. The Dollar/Yen will strengthen above it, but weaken below it.

The Dollar/CAD finished slightly better but inside of Thursday’s range. A drop in demand for riskier assets led by the break in U.S. equities is the catalyst behind today’s strength. The main trend is down on the daily chart and likely to continue to weaken if U.S. equity markets continue to rise. The fact that New Zealand increased interest rates is a sign that the Bank of Canada is likely to do the same in July.

Weaker equity markets and the disappointing U.S. Retail Sales Report pressured the AUD USD at the mid-session but this market made a full recovery into the close. Traders were paring long positions on the notion that the global economic recovery may not be as strong as previously estimated. Technically this pair stopped short of breaking out above the last main top at .8550. The late session recovery in U.S. equity markets helped trigger a short-covering rally in the Aussie which put it in position to blast off to the upside this week. Upside momentum could trigger a steep rally to .8727.

The NZD USD closed on its high after turning the main trend up on the daily chart earlier in the day. The first upside objective is a 50% price level at .6942. Holding about this level targets .7033. The Kiwi was boosted by greater demand for risky assets on Friday, but the rally was set in motion earlier in the week when the Reserve Bank of Australia raised interest rates, initiating its tightening cycle. In addition, upbeat commentary by the RBNZ helped provide some fuel for the rally.

Source: Courtesy of Brewer Investment Group, LLC; For more information, content and/or a preferred introduction to Brewer Investment Group, LLC and/or Brewer Futures Group, LLC, contact Investrend Communications via resources@investrend.com with “Brewer” in the subject line.

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Brewer Investment Group, LLC, advises that Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from Brewer FX, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. For more information, content and/or a preferred introduction to Brewer Investment Group, LLC and/or Brewer Futures Group, LLC, contact Investrend Communications via resources@investrend.com with “Brewer” in the subject line.

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