Monday, February 1, 2010

Analysis and some charts

Time for me to get back to work!

Indices have had their biggest fall since before March of last year and the dollar rally is well and truly on.  I used to pile into trades at the beginning of the week but MacroMan mentioned an interesting Monday effect here which will make me more cautios and look harder for my entries:

Major numbers and therefore event risks this week are:
CNY - Manufacturing PMI Sunday night
AUD - RBA rate statement is due on Monday night (I think market has priced in a hike) followed by trade balance Tuesday night.
NZD - Labour costs Monday night & employment numbers Wednesday night
CAD - Ivey PMI Thursday, and monthly employment numbers Friday
GBP - Manufacturing PMI Monday, Halifax house prices Tuesday, Services PMI Wednesday and Thursday is the big day with rate statement, MPC monthly statement and Asset purchase numbers.  Friday is PPI.
EUR - ECB statement and Minimum Bid rate Thursday
CHF - A quiet week. The SNB like to do their work on Friday afternoon when London has gone home.  They may continue to meddle in EURCHF and USDCHF.
JPY - a pretty quiet news week

Dollar Index
A pretty good unptrend underway and on its way to round number resistance at 80, and pivot at 80.40 in the middle of a previous congestion zone.
(weekly chart)

Crude.  Continues to be very bearish with a break of the last major daily trendline support and a good hold below 75.  I am selling rallies and holding for a retest of $70, looking for a break of that and a break of the previous swing low in the 68.60 area.  Daily bearish engulfing candle, a solid move through 72.80, the 61.8 fib of the last swing and fibonacci expansions say we go to $70 at least.

Bearish correction, Gold poked its toe through the December low on Friday before closing above at 1080.  I stronger push would I am sure trigger some bigger stops and my initial target is 1055, the bottom of the descending channel and resistance becoming support on the October swing high.

Silver.  Downtrend continues with a weekly continuation and a daily inside bar above key support at 16.00
Daily trendline broke on the 4th touch and my initial target is support and weekly trendline support from the lows at 15.72

AUDUSD Bearish continuation.  I am bearish, the Head and shoulders pattern that broke in December projects a a target of 84.00 but in the shorter term I am a seller of rallies looking for a test of the previous swing low at 87.35

AUDJPY – strong downtrend- Last daily support line was broken last week and I am a seller of rallies with targets 78.86, 78 & 76.30

NZDUSD Continues to make lower lows and lower highs I am a seller of rallies looking for a retest of the December low around 69.70.  My targets are 69.70, 69.00 and 66.00

NZDJPY - strong downtrend, like AUDJPY I am a seller of rallies.  I would sell a retest of 63.44 and my downside targets are 62.35, 61.46 and 60.19

USDCAD.  Bullish, I think this might be my favourite trade.  Has bounced of the 78.6fib of the Nov07 low and March 09 high and closed back above the 61.8fib.
 I would buy a retest of the pivot at 1.0580 and my long term targets are 1.10 and 1.115 (61.8 fib retracement).

CADJPY – strong downtrend accelerating, I think this could go to the bottom of the range at 75. Price is consolidating above the pivot level at 83.70 and I would rallies (a retest of 85.80 maybe) or a break below this level.

AUDNZD – Uptrend, but not a trade for me.  Support at 1.24 and resistance at 1.2775

EURNZD – upwards correction in a downtrend.   I would sell off the 2.00 level.   A close above that might suggest a bottom in.  Below this level and I am a seller of rallies.

GBPAUD – uptrend, but this is close to the top of the range and I would be looking for price action to short here for a swing trade with good risk:reward.  A break south of Friday's inside bar would be an interesting entry. A break above the top of the range at 1.84 would have me looking for a long. First support is at 1.75 and price action there intraday would get me long.

AUDCHF - Strong uptrend has stalled and I like this on the short side.  I would sell a break of Fridays inside bar hoping for a break of the daily trendline support and a much bigger drop.  First support is at 92.50 and first resistance at 95.30

AUDCAD - Consolidating after week long uptrend, weekly lower high. Daily bearish but this is a good level to buy off for a good R;R trade.  Will wait until after AUD rate statement.

GBPUSD – down trend – Price broke a daily flag/ wedge and bounced tonight on support at 1.5930.  I would sell a retest of 1.60 from the underside or a break of the lows and my target is 1.57.
Support is at 1.5830 and 1.57, resistance at 1.6020, 1.6110 and 1.6180
A long term chart shows a possible diamond top on cable which would project a much bigger downside target below 1.50

GPBJPY – downtrend – I think this chart is setting up for a big drop but is trapped in a wedge at the moment.  I am a seller at the break at 1.4360 and I would also sell a rally off 1.4730 or 1.485 anticipating a break of the wedge.

GBPCHF –  uptrend but this pair is at the top of the range and a reversal or pullback is possible here. I like the risk:reward for a short and a swing trade and am looking for intraday price action to short.  Further intervention by the SNB to weaken the CHF might screw this up however.  A break above 1.71 and I would lose my view of a bearish correction and the uptrend would continue.

EURGBP – downtrend but like GBPCHF this looks like a swing low could be forming off the bottom of the long term triangle / wedge.  I like the risk reward for a long here.  I don't have an entry but I am looking for one.  Longer term I am bearish this pair, and a break of the daily support/trendline would get me in short, or a sell if there was price action off a rally to 88.50/89.00

EURUSD – strong downtrend - the break below 1.40 on Friday sets this one up for a further drop to the 50fib and support at 1.3800.  A break below 1.38 has further major support at 1.3750, 1.3650 and 1.35.  I am a seller of rallies and would look for a short entry in the 1.4050 area.  Above that and I would wait out a bigger correction and price action to sell.  Only a break above the last swing at 1.4583 changes my bearish view.

EURJPY – downtrend - this pair are right at the bottom of the 9 month range.  A break down below the April low at 124.37 lines up a much bigger drop to 1.15.   It's hard to see an entry unless you are already short right now.  I am a seller of rallies and looking at resistance at 125.80 and 127.10 for entries.  Above 127.10 and a bigger correction could be on the cards.

EURCHF - I don't really fancy trading against the SNB so I think I will pass :)

USDCHF – uptrend handily assisted by SNB intervention - A bottom is in place confirmed by a higher low and higher high.  The break above 1.05 puts 1.07 in the target.  I would buy a dip to 1.05, and a break below this I would buy the 1.04 level. 

USDJPY – Downtrend, contained within a downtrending channel, only a break above 9380 changes my view and I am a seller of rallies for now. 

USDNOK – uptrend - if the spread was better I would like this chart as much as USDCAD.  A bottom is in confirmed by a higher low and price has broken above strong resitance at 5.89.  I would be a buyer of dips and a dip to the 5.5.75 area with price action would get me long.  Resistance at 6.00

USDSGD - uptrend - Similar chart to USDNOK a bottom is confirmed by a higher log and price is all set to break resistance and December 09 highs.  A good looking inverse head and shoulders appears to have formed with a target of around 1.43.

USDZAR - sideways, a bottom appears to be forming but not confirmed and still rangebound.  Not a trade for me.