- Forex Commentary -

October 1, 2010 (FinancialWire) (Investrend Information Syndicate) (Via Brewer Investment Group) (Overnight, September 30, 2010, Report) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — For our readers with an interest in currency related equities such as the PowerShares DB US Dollar Index Bullish Fund (NYSE: UUP) and the PowerShares DB US Dollar Index Bearish Fund (NYSE: UDN), FinancialWire(tm) contributor Brewer Investment Group provides us with some related perspective and insight regarding those markets:

The U.S. Dollar strengthened this morning after touching a five-month low against the Euro. The subsequent break in the EUR USD put this pair in a position to form a bearish closing price reversal top, but a late session surge negated the pattern.

Even without the reversal top which would indicate this pair’s next move, the Euro looks tired at current price levels, but is not likely to turn bearish until support at 1.3510 is violated.

Unlike the Euro, the AUD USD was able to post a daily closing price reversal top. The sell-off in the U.S. equity markets helped to lead the charge lower.

Technically, the Aussie Dollar is trading inside a small range of .9462 to .9733. This makes .9598 to .9566 a retracement zone target. This is really nothing compared to the bigger picture.

The longer rally from .8770 to .9733 makes .9251 a potential downside target once the reversal top is confirmed. An uptrending Gann angle at .9290 could slow down the pace of the expected decline.

This morning’s break in both currency pairs was most likely triggered by long position squaring caused by three better-than-expected U.S. economic reports. This morning’s 2Q GDP, Weekly Initial Claims, and Chicago PMI all came out better than their estimates, encouraging long traders to adjust their positions.

Many traders had been buying the Euro and the Aussie at will in expectation of a new round of quantitative easing by the U.S. Federal Reserve. Based on this morning’s data, the Fed may not have to print money as aggressively as previously thought.

U.S. stocks also fell as traders made month-end adjustments. Even with today’s sell-off stocks will post one of the best Septembers on record.

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 Syndications (via http://www.investrend.com/synd0001), and go to http://www.financialwire.net/?s=brwrgrprgw for other commentaries courtesy of the Brewer Group.

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 Syndications (via http://www.investrend.com/synd0001).

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