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TAURUS COMMODITIES
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(November 7, 1997) CURRENCIES: BRITISH POUND–One of our two most reliable performers seems to be on track recently, and our current long looks good to us, despite an overbought condition. The Bank of England surprised many analysts by raising their interest rates by 25 basis points to 7.25%, giving a good upside push to prices.
DEUTSCHEMARK–Our new longs haven't given us enough time yet to move stops, but chart patterns and cycles appear to be favorable even while overbought. Strength in the pound will not benefit our positioning but support is coming from fears of what the EMU would mean for the continent, Germany in particular.
JAPANESE YEN–Our “other” best performer looks solid in our new shorts, and we should be able to move stops down this evening if today's market action replicates that of the Globex trading last night. The ongoing economic weakness in Japan is putting a lot of fundamental pressure on the yen, though the further it falls, the greater the fears of intervention to support it.
SWISS FRANC–Another usually reliable performer, but flat now as we wait for our indicators to come back into alignment for a signal, which as of this writing appears that it will be a buy. As with so many markets, the franc is a victim in terms of uncertainty due to the economic crisis in Southeast Asia that appears ready to spread to South America.
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