At the Close. The bittersweet symphony.

18:00CET

The tenth month of the year comes to an end with a really bad taste in my mouth. I believe I can now call off (although I'd need a move above 1,355 to complete my disappointment) my Gold H&S call (4hr chart), and that is to my greatest disappointment, as I would've expected some kiind of fireworks today and a nice month-end close for the USD. But it was not meant to be. To complete the bitter part of the story, the USD/JPY attracted a lot of retailers on the long side, now looking for a double bottom around 80.40, and that is pushing the unit to test recent lows again, not really letting the monopoly-greenback to raise properly. Add to that the very much negative thing of again seeing AUD/USD and EUR/USD shorts piling up in the losers' side, and that means short squeezes every now and then.

But let's switch to the sweet part of this month-end symphony. The MONTHLY CHART of USD/CHF is showing a big reversal hammer candle, which should be supportive of my view of at least this pair going back above parity, and staying there for a while. Add as a supporting factor the still valid diamond pattern in EUR/USD, with top of the last part @ 1.4030 and support @ 1.3750, so a break of the support is needed for the low 1.30s on the long run to be seen. As I said earlier, if the USD/JPY positioning (and AUD!) would shift to negative USD, that would create the base for a double bottom, and certainly would mark a real base for the USD.

All in all, I have to say that there were days in this October where I felt the USD would really tank to hell, but it managed to survive on a technical basis, and who knows, the 2 months left to complete this 2010 may bring us some surprises to the upside. But first, losers need to shift positions, something they marginally did this week (and we saw how good it was for the greeny-backy), but that did not last long. Best wishes for the upcoming November, especially if you are one of those gutsy technical traders that resist to accept the official monopoly-greeny view. Also, let's not forget the big event for November, apart from the usual NFP-day, which is taking place on the 3rd of the month, when the helicopter of the Fed will fly over all of us traders and will unleash its final decision on QE2 (bond buying program)....the market is going to go crazy after the event, there's little doubt about that.

Before leaving, here's how things are ahead of the monthly close when it comes to losers' (retailers) positioning:

Oct 29, 2010 18:00 GMT+0200
READING: %LONG/%SHORT

   1. AUD/USD
      48.52% 51.48%
   2. EUR/CHF
      58.55% 41.45%
   3. EUR/GBP
      47.00% 53.00%
   4. EUR/JPY
      60.79% 39.21%
   5. EUR/USD
      42.85% 57.15%
   6. GBP/JPY
      63.01% 36.99%
   7. GBP/USD
      36.46% 63.54%
   8. USD/CAD
      60.66% 39.34%
   9. USD/CHF
      74.50% 25.50%
  10. USD/JPY
      82.65% 17.35%

I'm Tony Juste, CMA of CTAinvestor.com and www.twitter.com/ctainvestor . Thanks for being there, I look forward to seeing you all again next month! (i.e., in 2 days time).

Posted via email from MT4