cashbackforex
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The NZDJPY has been down hard from 65.42 at the beginning of the month to a low of 60.57 today. Like the euro, the NZD versus the yen is well oversold. Basis the RSI, the NZDJPY is down to 18.30, and against the USD, the RSI is about 21.
![CENTER]](/proxy.php?image=http%3A%2F%2F%5BCENTER%5D%5Burl%5Dhttp%3A%2F%2Fwww.cashbackforex.com%2FPortals%2F0%2Fuimages%2FJohn.H%2FNZDJPY-d-16May2012-600w.gif%5B%2Furl%5D%5B%2FCENTER%5D&hash=f8a86bc9ae9cb8b905644675bf6c6ffd)
The Swiss Franc versus the USD is another interesting situation. On the first of May the USDCHF traded at a low of 90.42. The USD has since rallied to a high of 94.81 today. At the current level of .9451, the RSI is 78.68, well above the overbought level of 70. With the continued intervention by the Swiss National Bank, the SF is pegged to the euro by the SNB at 1.20. As the euro sells off, the SNB must sell the SF and buy the euro to keep the spread at 1.20.
![CENTER]](/proxy.php?image=http%3A%2F%2F%5BCENTER%5D%5Burl%5Dhttp%3A%2F%2Fwww.cashbackforex.com%2FPortals%2F0%2Fuimages%2FJohn.H%2FUSDCHF-d-17May2012-600w.gif%5B%2Furl%5D%5B%2FCENTER%5D&hash=0c9027e4a888410ae88aaa95a55edd26)
Looking at the last COT Report, speculators were short 26,734 contracts of the franc, trying to mimic the SNB and the euro. During the May sell off in the euro, the OI in the SF futures has climbed smartly, from 41K at the month's beginning to 64K at the close yesterday. Specs have added to their short SF aggressively, and are short over 90% of the enlarged SF futures market.
When the euro turns for a rally, the composition of the SF tells us the USD might have a sharp break versus the CHF.
These are fast markets and loaded with speculative players. As always, the timing is critical in markets but markets do go to far and then reverse.
We suspect the NZ$ has been sold too heavily as has the SF versus the USD. For the euro versus the USD, there are lots of new USD longs that might be quick to exit the markets should a change in sentiment develop.
The Swiss Franc versus the USD is another interesting situation. On the first of May the USDCHF traded at a low of 90.42. The USD has since rallied to a high of 94.81 today. At the current level of .9451, the RSI is 78.68, well above the overbought level of 70. With the continued intervention by the Swiss National Bank, the SF is pegged to the euro by the SNB at 1.20. As the euro sells off, the SNB must sell the SF and buy the euro to keep the spread at 1.20.
Looking at the last COT Report, speculators were short 26,734 contracts of the franc, trying to mimic the SNB and the euro. During the May sell off in the euro, the OI in the SF futures has climbed smartly, from 41K at the month's beginning to 64K at the close yesterday. Specs have added to their short SF aggressively, and are short over 90% of the enlarged SF futures market.
When the euro turns for a rally, the composition of the SF tells us the USD might have a sharp break versus the CHF.
These are fast markets and loaded with speculative players. As always, the timing is critical in markets but markets do go to far and then reverse.
We suspect the NZ$ has been sold too heavily as has the SF versus the USD. For the euro versus the USD, there are lots of new USD longs that might be quick to exit the markets should a change in sentiment develop.
