Monday, February 15, 2010

Analysis and not many charts

US Bank holiday, Asia holiday, Greece holiday so I will take a pass on trading.
Commodity currencies have bounced back against the dollar led by AUD,  but the Euro Sterling and Swiss went sideways. 

Dollar Index - Finished last week almost exactly where it began after bouncing off resistance.  A volatile week where the index seemed to be following indices rather than vice versa.  Uptrend is still intact but more sideways chop is not out of the question.  FOMC meeting this week and comments re interest hikes or tightening might give some direction.

S&P Weekly inside bar and a close not too far from last week perhaps slightly more bullish.  Daily chart shows price contained in a descending channel and knocking on the top of it and a rally from here looks on the cards.  The market seems to want to go higher, it resisted tanking when the dollar fell hard earlier in the week and also recovered quickly following the announcement of higher China bank reserves (unlike last time).  I have an upside target of 1085 / 1092

FTSE very similar to the SnP in a descending channel but threating a break to the upside. But a stronger week has FTSE back above strong support at 5081.  Upside target 5375 / 5398

Volatile week in the dollar is reflected in the crude chart.  Weekly inside bar with a close above 72.50 support but below psychological level of 75.  Price has found support off the 200day moving average. 
The cot reports say net long positions in crude declined 51% last week, as a contrarian indicator it suggests a rally is in order.  Crude is at the bottom of a range or channel forming and if the channel is correct the upper price target is a new yearly high at 85.00  This also coincides with the 100% fib expansion of the last swing.   I expect some bumps on the way at 78.00 and 81. 00
A break back below 72.50 sets up a retest of 70 and the bottom of the range.   Price has to break below 68.69 previous swing low for the 12 month uptrend to be over.

Gold. Downtrend, Last weeks break below the descending channel was false and gold found support off the 200 day moving average and momentum to move higher last week.  Top of the descending channel is a good target for a short (perhaps 1103), a break up out of the channel says a retest of 1125 .  Break of the 4hr/1hr rising trendline support line gets me short again.

Silver. Downtrend intact but silver has made a grinding slow retracement higher this week.  I am waiting for price action at 16.00 to short this but a bigger retrace to 16.750 or 18.00 is also quite possible.

Currencies - Majors

AUDUSD  Daily double top.  Price powered out of the descending channel last week on better than expected AUD employment and economic news and shrugged off the Greek contagion.  Weekly inside bar means could consolidate sideways some more but if it pushes higher then I'm looking for price action at 90.00 (or poss 91.30) to short again. 

NZDUSD – Daily double top.  Unlike the Aussie the NZD has not broken out of its descending channel and is held back by descending trendline.  Presently stopped at the 61.8fib retracement of the last leg down it looks pretty weak and a better short opportunity than AUD. Weekly inside bar means could consolidate sideways some more but if last weeks low does not hold next support is 66.00

USDCAD - I am bullish above 1.0225.  I am looking for price action to go long at 1.0415 which is former support and 61.8fib retracement.

GBPUSD – broke down strong support at 1.5730 and this level held as resistance all last week preventing any meaningful retracement. If this resistance is broken I would go long countertrend targeting 1.60 and the 50fib but my preferred trade is looking for price action to short off 1.60 (50fib) or 1.61 (61.8fib and strong resistance).  It is VERY possible cable just continues to consolidate sideways and the resistance at 1.5750 holds and it range trades which case I will short a break of the lower range at 1.5530 or the rising 4hr trendline.

EURUSD – (the weakest link!).  I am flat at the moment.  If it can manage a weak rally then I am looking to short at 1.37 (trendline resistance) and then 1.3850 (prev swing low) but if the Euro catches a bounce then I prefer the 1.420 level for price action to short.  Like Cable EURUSD could be a range trade until it breaks down, ranging between 1.3830 and 1.3530

USDJPY – contained within a downtrending channel, I am only selling rallies until it breaks out or touches the bottom of the channel.  Price has made a grinding retracement higher from the big drop on 04Feb and is sitting and holding below the 61.8fib.  A bounce up from here sets up another test of the channel trendline at 91.50/92.00.  I am flat until price breaks below 88.50 or above 91.30 (prev swing lo / swing high) or I might consider a trendline break trade.

USDCHF - Above 1.05 I am bullish.  I would buy dips or a pullback to 1.05 but would not be surprised to see the pullback capped at 1.06


AUDJPY – strong downtrend- weekly inside bar indicates consolidation or could push as high as 83 where I will look for price action to short. 

NZDJPY - strong downtrend, it broke the diamond top formation on the daily. If you project a target using that top then the level is the previous support at 52.89 I am selling rallies, resistance at 62.16 and 64.71

CADJPY – strong downtrend, I am selling rallies and looking at resistance at 84.21 and 86.15 for entries. My target is the bottom of the range at 75.

AUDNZD – Uptrend, the divergence between the AUD ands NZD charts makes this look good as a long.  Support at 1.24 and resistance at 1.2775.  I would buy a pullback to 1.2660 or buy a break of 1.2775

EURNZD – Look set to retest the January lows.  Massive weekly bearish outside bar, Fridays inside bar looks like a good trade to me.

GBPAUD – strong downtrend. Price looks to be consolidating after last weeks massive drops.  I like Friday's inside bar as an IB trade setup.

AUDCHF - Strong uptrend weekly bullish outside bar, daily made new highs last week this is a buy on dips or a pullback to 0.94

AUDCAD – Price has made a lower high but needs to break and close below 91.950 to confirm downtrend. A rally from here suggests a double bottom.  I am waiting to see but I am favouring the short side.

EURAUD - making significant new lows, no end to the downtrend, I am a seller of rallies (looking for 1.55 / 1.5620) but price could just continue to drop here.  Support 1.5144 and 1.4871

EURNZD - similar to EURAUD, sell retraces off 1.9560 / 1.9640 or break of lows with support at 1.8981 / 1.8661

GPBJPY – downtrend – I am bearish and selling rallies.  Price broke below 1.40 support but could not hold below.  The rising wedge pattern (bear flag) on the 4hr / daily is bearish and I would sell a break of the wedge, otherwise I would wait for a pullback to 143 or the trendline support at 1.44 to short.

GBPCHF – Flat the SNB interventions have made this hard to read.  Price is contained in an extended wedge/ triangle and looks set to test the upper boundary and 1.70 SR level where I would sell.

EURGBP Price contained in a well defined triangle/wedge I believed that this pair had moved off the bottom for a swing.  A sharp reversal off the 0.8830 SR pivot level and the decline in the euro the last two weeks has it set to test the bottom again and a break out means a long drop ahead.  Support at 0.8650, 0.8600 I am back to being bearish and will wait for price action at 0.86

EURJPY – downtrend – but stalled with a weekly inside bar at 121.50 support after several attempts to break it.  I am a seller of rallies looking at a rally to the SR level at 124.80 for a short entry. A corrective rally could get as high as 1.2730 or 1.29 where I am a seller.  Only a break and close above 129 changes my bearish view. Short  target is 1.1550

EURCHF – Downtrend but No, thank you

USDNOK – uptrend – confirmed bottom, I am a buyer of dips with a target 6.60.  Price poked its head above 6.0 but couldnt hold it. A break and close above would be a good entry.
Below 5.80 is a no trading zone for me and a deeper correction could be forming.

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