Howdy Folks,

Another Sunday open, another week of trading begins. I’m a little bummed the market didn’t offer a juicy gap trade at the open tonight, but I’m looking forward to a great week of trading. I’m of the opinion trading will be dominated by risk this week. The news that Dubai is struggling to pay, and may default on $60 billion in debt is kindling for a risk aversion fire waiting to happen. Over the weekend it was reported the UAE Central Bank setup an emergency facility to support bank liquidity, fearing a run on deposits from customers afraid the banks will be unable to survive the potential massive losses. Even folks relaxing on a palm-shaped, man-made island without a care in the world, understand Dubai is in a very bad situation.

Fuel for a risk aversion fire may be provided by several key fundamental reports scheduled for release this week. The market will be sensitive to any poor retail news or rumors coming out of a Black Friday holiday shopping weekend. The media’s template for Black Friday appears to be “tepid, but mildly encouraging”, how predictable. We will see Canadian GDP data, an Australian and EU rate statement, and my personal favorite, United States employment data. I think it is worth pointing out the expected unemployment number for Friday’s report is 10.2%, which was reached last month. My prediction, 10.5% with another 150,000 jobs lost. That is based on nothing other than my icky, squishy guts.

Any return to risk aversion could be positive for Dollar. Technically speaking, the EUR/USD looks top heavy and desperate to make further gains. The weekly chart is flat and the monthly chart appears top heavy. On the daily chart, each push higher has been met with stiff selling. Clearly the supply zone between $1.5050 and $1.5150 is proving a tough nut to crack. Ironically, 5150 is the code used by the police over their radio to report a suicide; perhaps something to consider if your planning a sell at $1.5150 this week. Seriously though, the supply level at last week’s high price will be an important level for EUR/USD to mount. Any failure, combined with poor fundamentals may spark a stiff sell off. I still think a long term price target of $1.54 is valid as I wrote several weeks ago, but I’m not yet convinced it will happen this week.

Best of luck this week, more tomorrow.

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.