Yen noise not seen turning into action at G7

LONDON (Reuters) - Finance ministers from the world's powerful nations might well talk about the Japanese yen's weakness at next weekend's G7 meeting, but action is unlikely -- leaving the currency's fate to market forces.

The Group of Seven gathering in Singapore has loomed large as investors look to see if finance ministers keep up pressure on countries enjoying big trade surpluses, notably China, to allow more currency appreciation.

The yen, which recently hit record lows against the single European currency beyond 150 yen , had a rocky ride last week -- thrown around by comments outlining where it might stand on the meeting's agenda.


Hefty gains in the yen were seen last Thursday, with comments from Germany's deputy finance minister Thomas Mirow, who said yen weakness against the dollar and particularly the euro would be discussed...more

GBPUSD 60-min testing key support...

On a 60-min basis key support for GBP is 18757...testing...

GBPUSD 60-min:
091506%20gbp%2060.pdf

USDJPY EW Daily...

091506%20jpy%20daily.pdf

USDCAD 60 min

091506%20cad%2060.pdf

USDCAD Daily

11225-35 key resistance...

USDCAD Daily:
091406%20cad%20daily.pdf

Recommendation Summary 14 Sep 06

No open positions...

Summary:
091406RS.pdf

Stopped out per Issue #134 euro

We were unfortunately stopped of Issue #134 euro, with a loss of 27 PIPs (or ticks) per lot.

Presently we are flat.

Stopped out per Issue #134 euro

We were unfortunately stopped of Issue #134 euro, with a loss of 27 PIPs (or ticks) per lot.

Presently we are flat.

EURUSD 60-min chart

091306%20eur%2060-min.pdf

Recommendation Issue #134 euro

Tight target and tight stop…

Black Swan Letter
Recommendation Issue: 134
Currency: Euro
13-Sep-06 7:45 a.m./GMT 11:45

Forex:
Sell EURUSD @ 12673 STP / SL/ 12700 / PT1/ 12640 / PT2/ 12610

Futures:
Sell EU Dec '06 12742 STP / SL/ 12769 / PT1/ 12709 / PT2/ 12679

STP – Stop order entry
MKT - Market order entry
LMT - Limit order entry
SL – Stop-loss point
PT1 – Profit target #1
PT2 – Profit target #2

Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

Recommendation Summary 12 Sep '06

091206RS.pdf

Excerpts: Dollar path depending on growth...strong growth supportive; bad growth supportive; soft-landing dollar weakens...

Below is an excerpted from a recent article by Stephen Jen of Morgan Stanley:

Cyclical dollar weakening most likely if US soft-lands

The dollar has the best chance of weakening, on an index basis, only if the US soft-lands. This is, in fact, still our central case assumption. In the unlikely event that the US economy falls into an outright recession, Asia and other high-beta economies are likely to suffer disproportionately. Investor risk-reduction could ‘turbo-charge’ the dollar and, ironically, lead to dollar strength. On the other hand, lingering inflationary pressures in the US would postpone this cyclical dollar correction, but we don’t see major USD strength in this scenario as the Fed is unlikely to tighten substantially further. In this note, we present our thoughts on the relationship between the dollar and the US economy. We also refresh our forecasts, without changing our main thesis on the dollar.

Two key questions

The outlook for the dollar is predicated on the answer to two key questions: (i) will the US fall into a recession, and (ii) will the rest of the world be able to de-couple from a slowing US. Our central case assumption is that (i) the US economy will soft-land and (ii) the landing in the US will be so soft that the rest of the world will manage to continue to recover. The dollar will weaken as a result.

The future path of the dollar will be sensitive to the assumption one makes about these two questions. If the US falls into a recession, as many commentators are confident will be the case, or if the rest of the world does not manage to de-couple from a soft-landing US, we believe that the dollar should actually strengthen.

UK inflation up to 2.5% in August

UK inflation accelerated to 2.5% in August, the fourth month in a row it has topped the government's 2% target.

GBPUSD Daily:
091206%20gbp%20daily.pdf

Stopped out w/profit per Issue #133 C$

We were stopped out of our remaining lot per Issue #133 C$ w/profit. Presently we are flat.

Stop-loss Adjustment Issue #133 Canadian $

There is always that balance between giving a currency room to breathe and giving back hard-won points in profit. In our Aussie trade, I recommended we tighten up, to lock in a bit of gain, only to nicked out and miss out on a 100+ PIP move…

Thus, the question, do we tighten up the stop in C$ Issue #133? There is no right answer of course, without the elusive gift of hindsight. But based on today’s price action given the background plunge in gold, we would have expected USDCAD to rally (futures to sink)—but it didn’t. Does it mean strong resistance in hear for USDCAD (support for futures)? Maybe!

All said and done, we are recommending a stop-loss adjustment. But in the end, it is up to you to determine how much breathing room you want to give any remaining lots. USDCAD 60-min chart attached.

Economic data due out from Canada tomorrow (forecast 1st column; previous 2nd):

9/12/2006 12:30 CAN New Housing Price Index MoM 0.8% 1.4%
9/12/2006 12:30 CAN Int'l Merchandise Trade C$4.9 C$4.7
9/12/2006 14:30 CAN Coincident Indicator Index (MoM) n/a 0.1%

USDCAD 90-min chart:
091106%20cad%2090.pdf

We recommend you adjust your stop-loss on any remaining lots per Issue #133 C$ to the following:

Forex: 11185

Futures: 8946



Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

Commodities vs. C$ and Brazilian real

091106%20cr%20cd%20brl.pdf

Stop-loss Adjustment Issue #133 C$

We recommend you adjust your stop-loss on any remaining lots per Issue #133 C$ to the following:

Forex: 11170

Futures: 8954



Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

Gold continues to breakdown (and gold vs. C$ futures chart)

Gold daily:
091006%20gold%20daily.pdf

Gold vs. C$ futures daily:
091006%20cad%20vs%20gold.pdf

EURUSD 240-min

Euro still trending lower...looing a bit "oversold" but a break of the recent low at 12653 sets the stage for another spike lower...

EURUSD 240-min:
091006%20eur%20240.pdf

USDJPY 60-min...

Testing short-term uptrend line...

11669 trend line support...11629 chart support...

USDJPY 60-min:
091006%20jpy%2060-min.pdf

Stop-loss Adjustment Issue #133 C$

We recommend you adjust your stop on any remaining lots per Issue #133 C$ to the following:

Forex: 11160

Futures: 8964

Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.