FXAnalytics

[FXAnalytics]

Wednesday Morning US Session...

Last night when I ran the model the forecast was flat not really giving a good bias in either direction (although it was just mildly bearish towards the dollar). As I'm running it this morning we are seeing the weak signal persist as the dollar rallies... If your long term view is bearish for the buck this morning could provide you with an opportunity to sell strength. I'll update the model again at mid-day see things look...

[FXAnalytics]

Wednesday US Mid-day

The model is still favoring a softer dollar through the next twenty four hours we might be seeing the first signs of fade in this morning’s Bull Run. I’ll update the model again at the US close.

Coming down the road…

Earlier in the year PFI got involved in a major research project that has dramatically changed how we evolve process our internal model; it has also given us a much greater capacity to process raw data. Where we used to use a single computer to process a single-dimension data-set in an ANN application we now process an exped data-set (five robust subsets) across a computer grid. We’ve also updated our software application an entry level NN a prop application to a scientific grade application used in high-end cancer research… Needless to say this setup can crunch numbers. The accuracy ratio of our own internal model has jumped several percentage points in back-testing where we used previous returns as a base line. Current returns since January also support the higher gains.

In addition to better forecasts we’ve also gained a level of classification efficiency we’ve never had in the past. Now we can clearly identify a specific time frame as trending or cyclical can more importantly identify which indicators in each of those categories is having the most predictive power. This has important implications for a broad base of traders basic technical models that suffer when market switch gears trending to cyclical to the more advance Neural Net applications that use technical indicators as initial cidate predictors but are needlessly slowed down by factoring data that has little relevance at that time.

Soon we are going to re-launch the FX Analytics service that we had to abruptly halt when the research deal came in we are going to include all the analysis described above. Subscribers will have access to our own model trade calls as well as the classification impact data they can apply tp their own models. As I get closer to the launch I’ll provide additional details. If there are specific indicators you would like to see in the impact data or if you have any questions please drop me a line at john@fxan.com.

In the meantime I’ll begin to add additional information in our daily updates here as we structure the information into something more appropriate for the individual trader.

[FXAnalytics]

The dollar managed to give up a little bit of the earlier gains but is now retracing the retracement... The model remains soft on the buck for the next 24hrs I'll st by that at least until the new run prior to the UK open.

[FXAnalytics]

Thursday Outlook

Still searching for dollar weakness a stronger move could be coming...

The model forecast for a weaker dollar remains intact for the next 24hrs. We are getting some support our cyclical model our shorter term regression model. We are however out of sync with our longer-term regression model which is sitting on a support zone getting a little old.

Current levels represent minor resistance an area where the dollar has failed to rally above in recent weeks; it less likely that a sustained move above these levels will be seen until something fundamental is released to support it.

The risk profile of the market is becoming much more aggressive we are seeing our Risk Metrics levels rising; they could peak in the next few hours leaving us primed for a a stronger move in the next twenty four hours.

We are building short dollar positions in front of the UK open will keep our fingers crossed...

[FXAnalytics]

Trade Update

We're basically flat overall a profit point (slight gain); the reversal in the pound has unwound any good acheived in the other ps. We'll hold these for the next couple of hours reavaluate the model at mid-day.

[FXAnalytics]

Thursday US Mid-day

The dollar continues to languish making no real progress in either direction. The quiet price action has pushed risk metric levels into high territory a sharper move in the next 24hrs remains a real possibility. Our model remains bearish on the dollar through the remainder of the session although we're not getting much support right now the price action.

The EUR/USD sits just above hourly support at 1.2891 but is looking top heavy as it has failed twice to hold the 1.2935 level. Trend indicators are turning bearish both MacD RSI levels look to be rolling over. Major resistance comes in at 1.2962 1.3017. Daily levels take the other side of field look bullish but we have a minor resistance level just above us at 1.2937 where we have failed to push past.

The USD/JPY gave us a mild sell off this morning has helped offset losses in the pound a spike higher though is giving up some of the ground gained as the broader market looks for an overall direction. Currently the Yen is floating is in no real danger of touching any substantial hourly support or resistance levels; found at 108.01 108.91 respectively. Hourly studies look bullish for the p but are facing opposition on the daily outlook; one that is looking a little exhausted. Support resistance are seen at 108.26 109.82. If the support level breaks down on the daily side our next major support comes at 106.70

The GBP/USD has led our losses this morning with a strong move south unwinding the profits is three other p. We are seeing an attempt to 1.8752 a major resistance level on the hourly picture; another failure here could produce a bounce back up light a fire under our other positions... I can only hope. Hourly studies are a little mixed heading into the US Mid-day provide little in the way of forecasting. The daily picture is starting to roll into a bullish phase with both MacD RSI levels turning up. The Trend picture is less clear; choppy price action is often associated with these levels as a continuation or reversal is still possible; additional consolidation here can't be ruled out but the longer we maintain these levels the more bullish the outlook becomes. The ps is also sitting on daily resistance at 1.8758; if this levels break downs 1.8640 1.8514 come into play. A failure to sustain a move below could cycle us back up to the region of 1.9105.

The USD/CHF like the others is split in its outlook; hourly studies are bullish with daily's looking oversold. Minor resistance on the hourly picture is seen just above at 1.2026 with support at 1.1978. Daily S/R levels are 1.2250 1.1503

[FXAnalytics]

Thursday US wrap...

That was the move I was anticipating it would have been nice if it had gone the other direction. This will level our risk metrics model heading into Friday. I haven't run it but I can almost guarantee at this point the model will be short for tomorrwo or should I say still or again after that bull run in the buck. I'm leaving short dollar posision open on the off chance we get just a little retracement through the Asain session - I'll take what I can at this point.

I'll be back prior to the European open with a complete workup.

[FXAnalytics]

Friday Model Forecast

The dollar pushed up into the upper resistance b on our hourly chart with a rally led by the GBP/USD... we took this one on the chin that's all you can say about that. Looking at the 12mos chart we can see the buck is trying to get above that minor resistance level where it has failed in the past; it will be interesting to see if it can hang on this time. After the rally the risk metrics have as predicted turned down should continue to cool off through tomorrow.

Both of our oscillators have obviously moved up into over- bought territory but that in of itself is not a reason to short the buck. I think some attention has to be paid the long term resistance level mentioned above; how the dollar hles this level could be important in the development or failure of a trend; if the buck continues to push higher the oscillators will have a diminished impact initially.

The Nonparametric Regression Model (NRM) is forecasting (I know you'll be shocked) a softer dollar. If you say it long enough it's bound to happen.

The Optimized Neural Net (ONN) has given us one of the choppiest forecasts we've ever seen; this type of price action forecast (there really is no clear bias - but it's very choppy) is the result of the data-set not really being able to key in on a specific cidate predictor. That's a sign market dynamics could be changing. Sunday we'll be providing our first published indicator classification for the upcoming week hopefully we can uncover a shift in efficiency rebalance the data-set to better reflect current conditions. In the end no one model will ever be perfect all the time but there's no harm is striving for increased accuracy.

With the NRM still soft on the dollar we'll hang onto our shorts see if we get any retracement in the next session. Regardless of where we're at we'll close position out before the US close. I don't want to carry this uncertainty into the weekend.

If you want to view the corresponding charts you can do so at our site fxan.com. Use 2co (o as in oscar) for both the log in password.