Monday, September 28, 2009

Analysis and some charts, 27 September

The much anticipated FOMC statement arrived last week and it was the most positive statement on the economy for a while … The market didn’t like that it was so positive and more importantly that QE was not being increased (as the UK had done) and markets fell following the news. Which just goes to show that the equity rally is supported by tax payer dollars and not green shoots (quelle surprise, sigh).

USD index weekly has followed last weeks doji with a small but bullish engulfing hammer shaped candle which indicates the dollar could put in a rally/correction/consolidation this week. It is still counter trend and the bearish dollar sentiment is still extreme. There could be a choppy counter-trend ride up for the USD as support becomes resistance at 78 and 79.25 but the dollar looks set to take back some ground it lost or at least consolidate above the 76 level.

Indices. Funny how sentiment changes. For weeks all I have heard is the market needs to pullback a bit so the bulls can buy some more and now we pulled back a bit (literally to the first level of support) and suddenly everyone says the next big drop could be here. (It could be but the price action does not say that yet). The S&P & Dow made new highs last week and have closed above last weeks open and above the August highs so resistance could become support here and after three days of pullbacks in the indices last week (the most it has done for a while) it could very well rally Monday. The trend is still strongly bullish, and not a short for me until there is some better price action.

Crude. Weekly big bearish marabuzo, daily doji consolidation after two days of sharp falls. Crude excess supply and the USD finding it had some muscles after all have pushed crude back below $70 and out of its range for the last 7 weeks. Crude has found support off the $65 level and a 61.8fib at around 64.65. I am holding my short to see if we can break these levels, targeting the previous swing low and $62. The 200day moving average is at $62.30 and below that my target is $58. We could retest the long term support line from the lows that we broke from and the 61.8fib level of the last swing at 70.30 and I would still maintain a bearish outlook. Above $70.30 and back above support line and I revert to bullish and the possible bull flag pattern is looking more and more likely. Until then I am a seller.

Gold - weekly and daily bearish, pullback in uptrend. Failure to hold breakout levels and failed retest of $1000 level on Friday keeps it in the flag consolidation pattern with a retest of the 950 level and trend-line the most likely scenario. I like this counter-trend sell target 950.

Silver has finally broken the 17.00 level but failed to maintain above it and has pulled back hard to $16 support. Daily and weekly strongly bearish and break of daily rising trendline suggesting further correction to longterm trendline support, 50fib at $15.00. Sell on rallies for counter-trend short target 15.00 with a possible bump at 15.750.

AUDUSD – uptrend - weekly long legged doji, daily bearish followed by inside bar pause Friday. Break of the inside bar short and the 0.86 level would mean break of daily support line and further correction to 0.85 /0.8450 countertrend.  Going to pass for now and wait for better price action.

AUDJPY – sideways - Weekly bearish but range bound, daily is still rangebound but looks like could break short. Break of 77.50 and daily support line would suggest further correction to 74.00 with a possible bump at 76.00. Sell break of 77.50

NZDUSD – uptrend - Weekly bullish doji made new highs for the year, daily has pulled back slightly but still closed above last weeks highs. Bearish divergence warns of failure but still no indication to short this is still a buy on dips. Pass.

NZDJPY – sideways/uptrend – Weekly made new highs for the year and then pulled back to form a weak shooting star, daily broke out from bullflag and looks to be coming back to re-test breakout point. Still a buy on dips. A break and close below 63 and the uptrend is broken and it is back in the range.

AUDNZD – downtrend – weekly broke bear flag and made bearish marabuzo, daily is a double inside bar suggesting another bear flag setting up. Sell on rallies or a break of the 1.20 level targeting 1.17

USDCAD - sideways - Weekly bullish consolidation in downtrend, daily doji following big bullish marabuzo, this looks set to break a downtrending resistance line. This pair looks set to rally further on dollar strength. Weaker than AUD and NZD this is the best looking commodity dollar to sell. Buy.

CADJPY – Shorter term downtrend – weekly bearish marabuzo, daily strongly bearish has broken support at 83 and a rising daily support line. Sell on a retest of 83 or a break of the low.

EURCAD – uptrend – Weekly bullish marabuzo has broken out of 6 month bull flag. Buy on dips with a long term target of 1.75 level.

EURNZD - downtrend - Weekly bearish continuation after a weekly doji pause.  Daily dropped then consolidated sideways.  Sell a break of the lows at 2.0280 or on rallies but beware ... the 2.000 level looks inevitable but it will bounce there.

NZDCHF - same as EURNZD but opposite ... its a buy.

GBPAUD – downtrend – weekly big bearish marabuzo, daily bearish continuation. Price is approaching all time low levels and risk of reversal is high but no indication of it yet. Sell on rallies until the trend changes.

GBPUSD – down trend – weekly bearish marabuzo, daily bearish marabuzo this is a sell on rallies, my targets 1.575 / 1.55 / 1.50

GPBJPY – downtrend - Weekly bearish continuation of a double top pattern, daily bearish continuation in a downtrend has broken boig weekly support level. Sell on rallies targeting the 1.38 level next.

GBPCHF – downtrend – Big bearish weekly marabuzo, daily bearish continuation this pair has broken 50 fib level and my next target is 1.50, it’s a sell.

AUDCHF - Sideways - Weekly and daily bearish but rangebound pause in longer term uptrend.  A possible double top.  I am waiting to see if this double top plays out or the uptrend continues

EURGBP – uptrend – Weekly and daily charts are strongly bullish. Chart remains bullish and a buy on dips.

EURUSD – uptrend - Weekly doji after making new highs for the year this pair is now at an important Gann level. Daily is consolidating but no clear price action to short yet, although there is strong bearish divergence on the daily. Price action could entice me into a counter-trend short targeting 1.4450 SR level in the hope it would turn into a longer term move. Pass for now.

EURJPY – sideways - weekly bearish engulfing and daily strongly bearish but needs to break a rising daily trend line to tempt me short. I’m going to pass for now.

EURCHF - sideways – Pass. I have had a sell stop order just below 1.50 and price is drifting down to test it so let’s see …

USDCHF – downtrend - Weekly bearish continuation, daily made new lows for the year and then consolidated sideways. I do not like to short at these levels without a correction and would prefer a higher low to take a counter trend long looking for a corrective bounce to the 1.055 levels and go from there. Pass for now.

USDJPY – downtrend – Weekly massive bearish marabuzo, daily strongly bearish I like this short targeting 87.00 Sell.

USDNOK – downtrend - Weekly bearish continuation, daily sideways consolidation after again making new lows for the year. I will pass as not sure this is the best trade if the dollar rallies.

USDSGD - downtrend - weekly doji after making new lows for the year, daily consolidation sideways this could be making a base for a correction.  Pass for me and wait for price action at .143 and the descending resistance line from early July.

USDZAR - sideways, long term downtrend - weekly sideways, daily consolidating of strong weekly support level.  I like this long if the indices correct down, the dollar rallies and it breaks the descending resistance line from 17 August.  The spread is ugly but the R:R looks really good so I am watching and waiting ...

1 comment:

  1. Great stuff Nic - essential in my view to set one up for the week. I always check in for the DXY chart!