wmeubank@ocp.kcmo.com
THE REAPER
P.O. Box 84901, Phoenix, Arizona
(November 13, 1997) CURRENCIES: The British Pound is the strongest of the currencies, with its latest hike in interest rates to 7.25%. The trading public is too bullish on the British Pound. The Swiss Franc, Norwegian Krone, and Spanish Peseta have good relative strength with the German D-mark. However, these European currencies are now overbought and correcting downward. German unemployment rising to a record for seven months in a row in October means that German interest rates are unlikely to rise. Conversely, the U.S. Dollar was oversold technically and psychologically. The trading public is too bearish on the Canadian Dollar and the U.S. Dollar. A weak close by the December U.S. Dollar Index below 94.5 should accelerate the downtrend. Expect resistance in the December U.S. Dollar Index at 97.5. Among the Asian currencies, the Singapore Dollar, the New Zealand dollar, and the Australian Dollar should be close to bottoming, if they have not already. The trading public is too bearish on the Japanese Yen. The collapse in the Japanese Yen joined by the Nikkei Dow freefall is most disturbing.
RECOMMENDATIONS–Futures investors profitabLy long December British Pound use 1,679 open protective stops to lock in huge profits. Futures investors profitably long December German D-mark take partial profits and use .577 open protective stops, Futures investors may purchase December Australian Dollar on a stop at .70 and .71 with .69 open protective stops holding for a test of .75.
R.E. McMaster, Jr.
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