Oct 2nd Oct 8th 2011

Volume 1, Issue 22

Elite Global Trading

Forex Weekly Commentary

Fundamental Outlook
come sooner then most are expecting of the euro zone does not act in a unified effort during these critical times. During these critical times we have seen a strong move in the USD Dollar towards some important levels. We still have room to the upside and will most likely see this strength resume for the time being. A pullback can not be ruled out. With this dollar strength we have seen risk off moves extend to extremes, such as the AUDUSD and NZDUSD. Both of these pairs have extended past critical trend lines that open the door for further downward movement in the weeks to come. Some of these moves seem to be either over sold or over bought and for most we would expect a change in direction in near future, this can be true during normal market conditions, we don't consider what is happening around the world to be normal and we consider that when making our decisions in the market, so continued moves beyond expectation is a very possible during these times. Keep awareness high for Thursday's rate statement from Trichet, expectations of a 25 basis point cut, if unexpected decision happens we will certainly see volatility for the EURUSD.

In this issue: Fundamental Outlook AUDUSD NZDUSD 1

EURUSD GBPUSD Event Risk

Contact Info Disclaimer

The Euro Zone remains the highlight of discussion as Greece inches closer to the imminent default. The highlight this week will be the last rate decision for Jean-Claude Trichet, in which he might reverse his policy and cut the rate. Along with many others the Slovak finance minister joined the voices calling to prepare for a Greek default. The troika demands job cuts in Greece, and constitutional complications might prevent it. Leaders will meet towards the end of the week to discuss the situation. If they act too slowly, the default will not be orderly, which will cause more volatility for the Euro then we have been seeing. A move to the 1.2000s can

Oct 2nd Oct 8th 2011

Volume 1, Issue 22

Elite Global Trading

Australian Dollar / United States Dollar

AUDUSD: The AUDUSD has broken below its 2008-2010 trend line, and focus remains lower towards bearish objectives from the November 2010 low at 9534 and the 20092010 double top at 9400. This larger bearish count is valid against 9985. Resistance is 9700/60 this week. As the the Reserve Bank of Australia is becoming increasingly dovish. Concerns over the Australian economy are limited in scope, any pullback in Australian growth is likely to be provoked by broader global macroeconomic trends. This has translated into a weaker Australian Dollar over the third quarter of 2011. If further dovish rhetoric is issued - as expected interest rate expectations could diminish further. Indeed, a lack of supportive commentary from Gov. Glenn Stevens could send the Aussie plummeting in the coming days and weeks. Ideal shorts for the AUDUSD are at .9900 area, it will take some days of risk on for another shot at that level which may occur in the month of October. Outlook: Bearish Bias, we certainly are looking for substantial rallies in this pair to position for further moves towards the lower .9000s in this pair in the weeks and months to come. As risk unravels around the world this pair will see a substantial move back the the .8000s in the months to come. We may seem we are in over sold territory but like many of you know with economic conditions deteriorating around the world this can hold for indefinite time. We do expect some relief on this downside pressure, but certainly the moves up will not be lasting when they do happen. Levels to watch below are .9622 a fresh low in September and is immediate support right now. This was also a line of support back in September 2010. Lower, 0.9540 was a stepping stone on the way up back in the fall of 2010 and then provided critical support in November. Also .9460 capped the pair on the way up and then turned into support . The .9300 is support on the way down to do a critical evaluation at. After that we will see .9220, which was resistance over a year ago.

New Zealand Dollar (Kiwi) / United States Dollar

NZDUSD: The kiwi got a weak reading from rating agencies, which downgraded the credit rating of the country. This wasnt fully anticipated and sent the kiwi to a 6 month low. With the growing concerns around the world the kiwi continues to weaken with the risk off trade. The NZDUSD has broken its 2009-2010 trend line and focus remains lower. Extended weakness would target a Fib extension at 7555 and a channel from the top, which crosses 7455 into this week. 7700/20 is resistance and the extended weakness is expected as long as price is below 7830. Outlook: Bearish Bias Remains, 0.7655 was significant resistance back in February and also in 2010 and now switches positions to resistance after it was eventually pierced through. The .7524 was an important line of support at the beginning of the year, and later switched to resistance. The .7430 was support back at the end of 2010 and served as resistance in May. 0.7350, which was significant support at the end of 2010. We look for shorts in the weeks ahead as long as this pair stays below .7830.

Oct 2nd Oct 8th 2011

Volume 1, Issue 22

Elite Global Trading

UK Pound Sterling / United States Dollar

GBPUSD: Britain managed to distance itself from the intensifying debt crisis in Europe and gained the diversification of funds towards the sterling proposed by the SNB. This week, a lot depends on the British fundamentals, which are somewhat worrying. The BOE will be looking for more easing measures this month, with the BOE statement a few weeks away we may see continued gains in the Pound ahead of the BOE releasing their next steps for handling their deteriorating economy. As the GBPUSD is held up during these times we do expect further gains prior to the next major low for this pair. Outlook: Neutral, current near term outlook brings for a further rally towards 1.57631.5820. If the BOE does not extend its QE program we will certainly see gains up towards the 1.5900 area in the weeks to come before it's next major move down. Consider that the economy in the UK is very weak when looking take long positions, the long term outlook is Bearish with a Neutral outlook for near term we will likely see further gains or continued consolidation in this pair.

Euro / United States Dollar

EURUSD: Continued weakness following through lower from last week, further weakness can be expected. As the same time we are carving out a short term bottom for a deeper recover back up towards the 1.3800 area. Ahead of that recovery further lows is certainly probable, such a case, the 1.3300 level will be targeted at first ahead of the 1.3245 level, its Jan 172011 low and then its bigger support standing at 1.2874 level, its Jan2011 low. Looking up the 1.3799 level, its Sept2011 high will have to be taken out to reduce its present weakness and possibly bring further strength towards the 1.3835 level. Further out, resistance resides at the 1.3936 level, its Sept 092011 high. Outlook: Bearish Bias Remains, starting this week out we see a test of 1.3300-1.3245, a recovery up towards 1.3600 area and a break above 1.3700 will bring the 1.3800 in perspective of a testing. We like this pair short below 1.3936 level, we look for shorts on the rallies, ideal shorts are around 1.3800. We are targeting 1.2900 area in the weeks to come.

Oct 2nd Oct 8th 2011

Volume 1, Issue 22

Elite Global Trading

Weeks Event Risk

Monday: CHF: Retail Sales 3:15am GBP: Manufacturing PMI 4:30am USD: ISM Manufacturing 10am NZD: NZIER Business Confidence 5pm AUD: Building Approvals 8:30pm AUD: Trade Balance 8:30pm AUD: Cash Rate 11:30pm AUD: RBA Rate Statement 11:30pm Friday: GBP: PPI Input 4:30am EUR: German Industrial Production 6am USD: Non-Farm Employment Change 8:30am USD: Unemployment Rate 8:30am

Tuesday: GBP: Construction PMI 4:30am EUR: ECB President Trichet Speaks 9am USD: Fed Chairman Bernanke Testifies 10am AUD: Retail Sales 8:30pm

Wednesday: GBP: Current Account 4:30am GBP: Services PMI 4:30am EUR: Retail Sales 5am USD: ADP Non-Farm Employment Change 8:15am USD: ISM Non-Manufacturing PMI 10am

Thursday: EUR: German Factory Orders 6am GBP: MPC Rate Statement 7am EUR: Minimum Bid Rate 7:45am EUR: ECB Press Conference 8:30am USD: Unemployment Claims JPY: Monetary Policy Statement

Elite Glob al Trading

News letter Authors: Anthony Rousseau

arousseau@eliteglobaltrader.com

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