Sunday Analysis

An interesting week ahead!!  Will Magic risk-on Monday work again?
Its not a secret that I am longer term bullish the USD but looking at all the charts it is clear that we are looking at a risk-on rally as we start this week with breakouts in commodities and indices and possibilities in the yen crosses.  While many dollar crosses are held back by trendlines or in consolidating in pennants the Friday candles show  risk-on reversal potential breakouts.
After it's best run since December the dollar fell off sharply on Friday on the news of Greece asking for its IMF money.  This is the fifth Greece rally and now calling in the IMF is an excuse to rally (yes, I am a bit cynical).  The CoT shows the market was heavily short EURUSD last week so a squeeze is not unexpected and could bounce higher than anyone expects after the sharp move off 1.32.  So Greece is fixed and that leaves the most important news on the calendar for the dollar next week.  There is the FOMC which won't likely change the Fed Funds Rate but the market will be watching the discount rate and the language for hints on timing, but the biggest event risk for the dollar comes Friday with the Q1 GDP figure where a weak number could dampen the markets expectations for a rate hike.

Dollar Index (June): 

After five consecutive days of gains which put the dollar back in its ascending channel the dollar fell hard back to test the channel support.  We could be consolidating sideways and forming a large pennant, similar to the ones on the daily charts of AUDUSD and GBPUSD, so perhaps more choppy sideways movement before the news later in the week gives a firm direction but it is clear that after a strong rally the dollar is doing some back and fill correcting to start the week..  

S+P futures -

Weekly bullish engulfing, daily bullish long candle, the index has made new highs with no signs of reversal.  Buy on dips, targets 1216 and 1226.  Support at 1200 should give a long entry.

FTSE 100 futures -
Weekly bullish hammer like doji, daily bullish engulfing.  Price was in a descending channel / bull flag and broke out Friday.  A pull back to test the top of the channel or a break of Thursday's hammer candle are good long entries with a target of the old high at 5795 and then 5842.50 & 5905

CRUDE OIL (WTI)

Weekly bullish hammer, daily bullish continuation of Thursdays hammer, this chart says crude is on the way up again.  Price has closed on the 61.8fib retracement of the recent high-low and may pullback here to give a long entry.  I would watch for price action at 83 or 83.50 to buy with a target of  90.40.  I am however a bit cautious of this long, as we have bounced off the top of a wide trading range and if the dollar continues to rally it could put downward pressure on crude.  As most of the rally on Friday was triggered by relief over perhaps (another) solution for Greece it means crude is very sensitive to risk appetite.

GOLD.

Weekly bullish piercing line, daily massive bullish engulfing.  Gold really rallied hard on Friday as the dollar fell and broke its downtrending resistance line.  It has stalled at the 127fib extension and I am looking for a pullback here to 1150 or 1146 area to buy. We could test 1160 before gold pulls back and that could present a shorter term short opportunity.

SILVER. Similar to gold, Silver broke out from a wedge Friday and I would look for a pullback to 18.00 to buy with a target of 18.75 / 19.50 and if the dollar continues to rally I would pass on buying silver.

Currencies - Majors

AUDUSD

Weekly bullish doji, daily bullish hammer, AUDUSD has formed a tight wedge on the daily charts and could break either way.  There is the potential for a double top here with the November 2009 high at 94.00.
This pair is very sensitive to risk appetite and it is hard to see a reversal without a correction in stocks so I would wait for a breakout of this wedge.

NZDUSD – Weekly bullish consolidation, daily long bullish marabuzo.  Despite the bullish rally on Friday  I am bearish and looking for signs of a reversal for this pair.  The gently rising pattern is bearish to me and this is at the top of a broad descending channel.  I still like short below 0.72 and a break of 0.7050 opens up a much bigger fall.  If the dollar continues to fall this could break out on the long side and I will sit this one out.

USDCAD –
Weekly bearish reversal, daily bearish, USDCAD is in a bear flag pattern and looks set to break lower.  The 78.2fib from the 07 low to 09 high is support for now and just below it at 99 is the 88.6 fib from the 02 high to 07low.  Above these two major fib levels I am bullish and waiting for an opportunity to buy.  Below 99 and we have much farther to fall.  

GBPUSD –
Weekly bullish bit in a tight range, daily bullish piercing line.  Price is consolidating in a wedge or pennant and due for a breakout after last Mondays bullish hammer made a higher low (just).  A break of the wedge to the upside comes in at 1.5430 and I favour a break to the upside with a target of 1.5710 1.27fib extension but 1.5830 SR level and 61.8fib retracement are also possibilities.  I will be looking for price action to cut and short at these levels but until then I am bullish ... 

EURUSD – Bearish doji, daily long inside bar off 1.32 support suggests a tweezer bottom.  Price is still contained in a steep descending channel with resistance at 1.34 / 1.3540 and 1.36.  I am a seller of rallies and am looking to those levels to add shorts. 

USDJPY – Bullish breakout - weekly  bullish engulfing, daily long bullish doji.  The uptrend in USDJPY appears to have resumed and a break above 94.77 will confirm.  Buy on dips, I am looking to buy on a retest of 93.00 / 92.75 (if it gets there).  

USDCHF – Reverse of EURUSD. As long as the SnB keeps intervening to keep the CHF in line with the EUR then this pair trades in inversely to EURUSD.  I like this pair better short than I like EURUSD long but if Greece implodes again then so will this trade and I would rather buy dips.

Crosses:

AUDJPY –
Weekly bullish engulfing, daily bullish hammer, this chart is strongly bullish.  However, right above at 87.50 area is a strong resistance level / range high / and potential triple top.  A break and retest of this level gets me long but otherwise below that level I would prefer to wait for a pullback to buy at 85.60/86.00 to run at the resistance level with a profit cushion.  Particularly because above that level at 88.13, the March08 low could be significant resistance.

NZDJPY –
Weekly massive bullish engulfing, daily bullish marabuzo, this pair has broken out of a pennant formation and on its way to the top of the range highs at  68.65 / 69.75.  I am looking at 66.35 to buy but a break of the high would be a more conservative trade. 

CADJPY – Weekly bullish engulfing, daily bullish continuation following higher low.  This pair has important weekly resistance at 97 and just below that an unfilled gap resistance at 96.48 that has not been filled since October 08.  I am bullish, but cautious that a reversal may not be far off.

EURJPY –
Weekly bullish piercing line, daily long bullish marabuzo on Greek/IMF news.  Price has stalled at fib cluster and 126.40 and this is a possible short opportunity. It would need to pull back to 125.20 or 124.50 to entice me long but I am not sure this is the best yen trade.

GPBJPY –
Weekly bullish engulfing, daily bullish, price has broken above the key 145 resistance level tonight but looks a bit precarious, there is no entry long at this level.  I am watching for a pullback to retest 1.45 and see if it holds which would be a buy if it does..  If it does not I am looking at 141.75-142.50 area for a long entry with a target of  150.70

CHFJPY
Same as EURJPY, Weekly bullish piercing line, daily bullish engulfing, appears to be consolidating sideways below 88.00 and is off the top of a descending channel.  Price is making lower highs and lower lows, this is not a long for me until it breaks the daily trendline resistance I favour the short side or a pull back to buy.

AUDNZD – Weekly bearish, daily long bearish marabuzo, and I would sell a retest of 1.30 from the underside with initial target 1.27 then 1.24 - I like this one a lot, check the monthly chart.

AUDCAD – Sideways consolidation, weekly bearish outside bar, daily long legged bullish doji (pin bar).  This does appear to have broken support, which is what I have been waiting for but it is hard to sell into that daily candle.  I will wait for better price action to short. Pass for now, waiting to short.

GBPCHF – Weekly bullish engulfing daily bearish engulfing, price bounced off trendline resistance and 200DMA.  This is the inverse trade of EURGBP and I therefore expect this consolidation to eventually result in a break to the upside.

EURGBP - Weekly long bearish marabuzo hit double bottom, daily bullish engulfing off 0.86 level.  I am bearish this pair because it broke trendline support.  It has bounced off 0.86 potential double bottom  and back above the trendline support.  I am watching to see if it holds above and offers a short term bullish trade but I prefer to wait and sell rallies.  If it holds above the trendline support I am watching for price action at 0.8870-0.8915

EURAUD – Weekly Bearish engulfing, daily rallied Friday but price has been unable to close above 1.4420 resistance, despite some forays above. After 15 consecutive down months it is hard to imagine it falling further but of course it can.  I like this short here at 1.4420 and would sell any rallies off 1.4575 or 1.48 .

EURCHF – Weekly doji, daily sideways in congestion.  A countertrend long on Greek euphoria is tempting but not smart.  This looks all set to retest the lows.

GBPAUD - Weekly bullish spinning top, daily bearish hammer at the top of a range.  I like this short and the gently rising wedge on the weekly is bearish.  I am selling rallies and watching to see if this can get back up to 1.6985 and close the gap.

EURNZD - Another pair that keeps dropping.  Weekly bearish marabuzo, daily doji on Friday, the low looks like it is about to be taken out and I would sell rallies or a break of the low.  This is still a one way train next stop 1.8340

USDNOK – Weekly bearish shooting star, daily bearish engulfing confirms a weak week ahead for the USD and this pair looks set to test the range lows again at around 5.8.  I prefer to wait and buy there.

USDSGD - Monthly bearflag broke down, weekly is bearish continuation and daily is a bearish engulfing. I like this long above 1.36 but there is no price action yet to buy, so I will pass.

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Weekly analysis

New highs in the indices as they ground higher last week and profit taking on Friday saw a pullback to find support off the old highs. When we made new highs there was no squeeze of shorts covering but neither was there a rush of new buyers so sentiment does not appear to be extreme enough to make a significant market top at this point, however candle patterns suggest more correction could be in store at least for the first half of the coming week.

The US dollar roused itself and ended the week with a good old rally, it’s not out of the weeds yet but looking good for the week ahead. It has kept its appeal as a safe haven in risk-off moments but it gaining appeal as a speculative yield trade, a win-win. News of the rate hike in India helped this week. The yen repatriation flow has thus far failed to push down USDJPY much against supportive indices and yields. It will be interesting to see what happens there when that downward pressure to buy yens is removed.

I know the Vix is at very low levels, credit spreads are tight, corporate bond issuances seem to be trouble free but yet FX and commodities aren’t exactly brimming with risk appetite, in fact the opposite.

My favourite trades are shorting sterling and euros and the best trending pairs are the continentals vs. the commodity currencies again …(GBPAUD, EURAUD, GBPCAD, EURNZD etc).

Dollar Index (June):
A bull flag and a big rally Friday suggests the uptrend could have resumed and descending resistance line broken. We need to break above the end of Feb swing high but we look set to at least retest that from here. Looking very strong.

Indices.

S&P -
Weekly long legged doji after making new highs, daily high wave doji found support off previous highs. A correction is underway off a small flat top and looks to continue at least for the first part of the week, support at 1140, 1127, 1112 and 1102. The indices could pullback to the daily trend-line from the lows, which lines up 1102, and still keeps the uptrend intact from a technical view.  I would sell a pull up to 1164 and the underside of the Friday's broken support.

FTSE - Weekly bearish long-legged doji, daily bearish engulfing both sitting on support at 5580 after taking out the August 08 highs. Candles suggest a correction or pull back here. Whilst the uptrend is in place I would buy a retest of 5500, below that says a greater correction is underway to 5385/5400. A break below 5240 says the bulls’ party is over.

CRUDE OIL (WTI)
Weekly long legged doji, daily bearish marabuzo. I am short term bearish after crude spent another week battling to get above $83 and failing despite a falling dollar and rising equities. Once equities pulled back it translated into the biggest drop in crude in a month after the narrowest range day for month. Support at 80 held but the ascending channel has broken and a break back below $80 looks likely before prices go higher. Support is at $78 but the chart suggests a retest of $75 possible.

GOLD.
Gold is mid range in an equal triangle / flag pattern and too hard to call at this point. It has tried four or five times unsuccessfully to break the 1100 level. The weekly and daily chart patterns are bearish and gold suffered its biggest daily drop in a while on Friday when India (the world’s biggest consumer of gold) announced a rate hike in an effort to control inflation, something that will not help Indian discretionary spending.

SILVER. Similar to gold, sitting on a pivot. Weekly and daily candles are bearish off a daily double top but price is held above 16.75 support. My bias is short and I would sell a break (or break and retest) of 16.75 with a target of 15.70

Currencies - Majors

AUDUSD
Weekly small bearish high roller, daily bearish marabuzo off the 78.6 fib. The levels for last weeks bearish Gartley have not been breached and I still like this short. A close above 92.35 negates this bearish pattern and changes my view so for now I’m still bearish off this level.

NZDUSD – Weekly shooting star type doji off the 61.8fib retracement of the last swing has closed below 20ema, the daily bearish engulfing. Price is supported by a rising daily trendline and I would short a break of it at 70.50 or sell a break-retest of it, with a downside with a target of 0.6640/0.6580 and expect some resistance at 69.70

USDCAD – Still the best performing commodity currency for the third week downside momentum has stalled. Weekly candle is a long legged doji after price made new lows, daily is a bullish engulfing hammer below previous support becomes resistance at 1.02. If the dollar rallies this week this isn’t the best looking trade as a countertrend long (although I like it much higher). I would wait and sell rallies with a target of 98

GBPUSD –
Weekly bearish reversal off descending trendline and mid Feb swing low, daily is a big bearish marabuzo halted at 1.50 support. Remember last month when everyone was talking about the Euro and Greece whilst Sterling was being taken to the woodshed – it looks all set to happen again. Daily and weekly charts show big bear flag. Key round number support is 1.50 but rising trendline support is 1.4950 and a break of that sets up another big drop for cable. My downside target is around 1.4140. UK budget on Wednesday could be a big market mover.

EURUSD – This did look like a clear rounding bottom (Pring) but this pattern is hard to trade with no clear break points and no clear levels at which it is negated for stops. However the symmetry has been lost and it is hard to call between carving out a meaningful bottom or bearish consolidation before the next leg down. The news for EUR is not good and I tend towards the latter and sticking with the down trend. I am bearish below 13740, I would sell off 1.3650 or 1.37 and downside targets would be 1.34 (the 61.8fib retrace of 08/09 highs/lows) and 1.30

USDJPY – Second weekly doji inside bar, daily sideways in congestion. Flat.
Price is held at the upper boundary of a descending channel and should be a short here but there is no price action to short. Yen repatriation flow stops this being a buy for another week. I am staying out.

USDCHF – Reverse of EURUSD. I am bullish but I believe EURUSD is a better short than this is a long trade as EUR is declining so badly vs. CHF. Only a drop below 1.05 changes my bullish longer term view. First target 1.10, second target 1.15

Crosses:

AUDJPY – Long term trend down, medium trend up. Weekly inside bar pause, daily sideways consolidation. I am a seller of rallies and only a break above the January highs changes it. The 78.6 fib retracement is at 83.85 and we are held below that level. I like this short below 82 with a target of 79

NZDJPY – Weekly doji indecision, daily is a bearish and has broken an ascending trendline. I would sell a retest of 64 area with a downside target of 62.50 / 60.50. Only a break above 65.00 changes my bearish view for now.

CADJPY – The strongest currency this is at the top of a big weekly wedge and this week looks like a range trade short. Weekly is a doji pause, daily bearish shooting star type doji. As a short I think there are much better opportunities to buy the yen and I will pass

AUDNZD – Weekly bearish engulfing, daily spinning top. Monthly looks to be forming a shooting star with a close back below resistance which would indicate a counter-trend short or trend change. The NZD made a strong recovery this week and it shows in the charts but I will pass on this one and await more information.

EURNZD – Strong downtrend price made new lows again this week. Weekly big bearish marabuzo, daily inside bar. I am a seller of rallies in this pair and would look for price action to short at 1.9350 – 1.94 target 1.8181 (08 lows).

GBPAUD – Strong downtrend, weekly bearish inside bar, daily bearish marabuzo, I am a seller of rallies. I thought price could make it up to 1.7150 to sell again but it appears to be forming a bearish flag. I would sell a break of the daily candle at 1.6360 target 1.6245 and lower

AUDCAD –
Downtrend, weekly inside bar, and in a very tight triangle. I am a seller of rallies or the break of daily trend-line support at 92.50. I see this as a US/China trade, I like this one a lot …

EURAUD – Weekly bearish marabuzo engulfed last weeks counter-trend hammer and made new lows for this cross. I would sell a 50% retrace of this candle at around 1.4890. Although this pair is due a bigger correction I don’t see that happening unless the indices fall off this week and more risk aversion returns.

GPBJPY – The most bearish chart! Weekly bearish engulfing, daily bearish marabuzo this pair has broken trend-line support and is all set for more declines. I would sell a retest of 137.00 if it gets there or sell rallies in this pair, downside target would be 134 / 132.50 / 1.32 and below.

GBPCHF – Huge rally in CHF this week after clumsy remarks by the SNB has pulled this pair down. Weekly bearish engulfing, daily bearish marabuzo. This pair is a sell on rallies or retest of 1.60 from the underside with a target of 1.5650 / 151.00 retest of the lows.

EURGBP Weekly high roller doji, daily bullish engulfing, I like this long and I would buy dips off 90.00 or a break of descending trendline resistance, target 92.40 / 93 & 94 .

EURJPY –
Weekly bearish inside bar, daily bearish, price has bounced off 125 SR level and broken down an ascending daily trendline. I am bearish, would sell 123 123.15 area or a break of Fridays low, targets 120.70 and 119.63 and lower

EURCHF – This chart has fallen off the planet and I missed it. The market appears to have over-reacted to SnB member comments regarding rate hikes but I am not tempted to buy here and would prefer to wait and sell a pullback.

USDNOK – Weekly bullish engulfing, daily bullish marabuzo, the uptrend appears to have resumed after pullback to 5.8000 level, I would buy a pullback to 5.870 with a target of 6.077 / 6.250

USDSGD -
Weekly bullish piercing line – completion of which makes a higher swing low in an uptrend. Daily bullish marabuzo. I would be a buyer here for a long term swing and a target above 1.43. This looks a good long opportunity at this level.  Beware ugly spread in this pair.

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Thursday morning thoughts.

Some people reading this blog are going to wonder what the heck I am doing somedays, like yesterday.  I have a bias towards a stronger dollar and weaker indices and so somedays, like yesterday, I am riding the ripples and not the waves.  One day those ripples will become the big wave but it wasn't yesterday.  That's trading.

EURUSD is still a range trade with a top at 138 and a base around 135.50.  If it breaks below 135 this time I think the rounded bottom is negated and I might try and hold it short for a re-test of the lows.
Sterling on the other hand looks set to rally and correct further.  EURGBP has broken down support and this will help.  Although I am short some sterling I think it will break up through the daily trendline and we will see a test of 157.30 before cable falls off again. 

EURGBP: 
Daily chart, weekly looks set to be a bearish engulfing. 
A good short entry would be a re-test of 90.00 if it gets back up there with a target of 88.50 / 88.30

Commodity currencies are all strong, CAD & NOK strongest, AUD weakest.  They are all grinding their way higher and pretty safe buys on pullbacks.

Of the continental currencies CHF is strongest against the dollar.  The only thing that makes me hesitate about trading it is looking at where EURCHF is.  I can't believe the SnB are happy about this and if they intervene then they don't always just buy EUR vs CHF, they buy USD vs CHF to leg into EUR also.  This inevitably gets you spiked out of your trade before it all goes back to where it was which is annoying.  Anyway I might be brave and take USDCHF if the dollar continues to rally.

Here is EURCHF monthly chart, right down there in the weeds heading for 143:

S&P is finally having a breather to let some more get on the northbound train.  Resistance becomes support at 1155 & 1147 and if it gets below that 1139 and 1124.50.  This is an hourly chart (because thats how hard you have to look for a pullback).

USDJPY is set to breakout of this wedge.  It is March when yens are repatriated so I would not buy this until end of next week but if it breaks short I like it.  4hrly chart:

The GBP/EUR/CHF JPY's all look bearish and set to breakdown too.  Here is EURJPY,  a break here lines up a retest of the lows (500 pips away).

GOLD and SILVER are mid range in a tightening triangle and too hard to call either way tonight.  Despite my holding a short (countertrend) it looks bullish and I expect a test of the upper line before the lower one.

CRUDE.  Crude is bullish but at strong resistance and should really pullback before you can buy it.  My efforts to short it have not been very succesful lately.


I also like AUDNZD short, GBPAUD long, AUDCHF is a nice counter-trend short from the top of the range (I guess I don't like AUD).  Also USDNOK short (if USD continues to fall off).

Analysis and some charts

Volatility rules! Risk aversion is in but pullbacks are inevitable. Stop levels and SR levels seem pretty obvious at least for the dollar crosses. If risk aversion continues then the yen looks set to strengthen further. The Greek disease seems to be spreading to Portugal and might be infectious.  http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7182739/Greek-Ouzo-crisis-escalates-into-global-margin-call-as-confidence-ebbs.html. And no doubt RBS results won’t be happy for Sterling.
The end of day rally in the US indices on Friday was heavily touted on CNBC as exhaustion of selling, bargain basement prices and they predicted a big rally from here. I’m not convinced it wasn't just some profit taking at a 10% retracement point and will wait to see how the daily hammers on many charts play out from here.
This week has GBP inflation report, Euro GDP numbers, Australian employment and US advance retail sales in a news week that looks thin compared to last week but the Sovereign debt story could continue.

Dollar Index - Last week hit 7 month highs running straight through the round number resistance at 80.00. Stronger resistance is looming at 81.35/81.40 and closest support now at 80 (Weekly chart):



Crude. Bearish weekly engulfing candle, a break of the key pivot level at 72.50 (check a daily chart) and the last major daily trendline support means I continue to sell rallies looking to the December swing low at 68.69 initially. I expect a pullback up to resistance at some point and I see a retest of the levels at 72.50, 74 and 75 as a good levels. Below 72.50 is a very key pivot level for me.   You might be wondering why I draw fibs from the Oct 08 highs instead of the all time highs.  I have found that quite a few instruments (Cable is a good example) really respect the levels from the 08 highs to the December08/March09 lows.

Gold. Downtrend, massive weekly bearish engulfing candle which has closed below round number 1100 and key pivot level at 1074. I am a seller of rallies. It is interesting that in a risk averse week more money didn’t make its way to gold, preferring more liquid treasuries. Or perhaps the market thinks the price is a little to rich at those levels. I am selling a retest of 1074 from below and looking for a break of last weeks low at 1044 where support is.

Silver. Downtrend continues, a similar chart to gold but looks to be trading better! Last week broke the last daily trendline and also back through the 50fib level of the 08 highs and lows. Price has stalled on previous resistance level at 14.650 and I am a seller of rallies below 15.00. Retracement to 16 is possible and I would be looking for price action to short there also.

Currencies - Majors

AUDUSD Weekly and daily bearish continuation. Last week price broke December support at 87.30 which confirms the double top. I am anticipating a short term bounce and a continuation to 84, the projected level of the head and shoulders that broke in December.

NZDUSD – strong downtrend. Below 71.50 I am selling rallies with a target of 65 or 6450 where there are a mass of fib levels. Retracement resistance is at 69.77

GBPUSD – down trend – I have spent hours today drawing lines on this one chart. I see a diamond top and we have broken – very bearish and gives a downside target below 1.50. I am selling rallies and looking at resistance levels at 1.5730, 1.5780 and possibly 1.60 for short entries.

EURUSD – strong downtrend – My lowest target from last week of 1.35 was almost hit and I favour more downside but a corrective rally seems inevitable. I am a seller of rallies and would look for a short entry in the 1.3825 / 13860 levels (if it makes it that far). Only a break above the last swing at 1.4030 changes my bearish view.

USDJPY – Downtrend, contained within a downtrending channel, only a break above 9380 changes my view and I am a seller of rallies whilst price remains below 90.00 (I am looking at 89.80 for an entry). A daily bearflag looks to be forming and I may also short a break of support.

Crosses:

AUDJPY – strong downtrend- Hit my target at 76.30 and has stalled. I remain a seller of rallies and my target is 70.75. Has to break above 80.73 to get me to buy dips.

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

EURNZD – Lower highs and lower lows mean a low is in place and uptrend underway. I would buy dips but the important 2.00 level is looming and I would buy a break and successful retest of this level. Failure to break and close above this level and I am a seller of rallies. Until then I wait.

GBPAUD – uptrend correction in longer term downtrend. The weekly tells the story, the daily is still in uptrend mode. Price looks to have failed to break above the previous swing high and I think this might be an interesting non-dollar trade Monday, looking to retest the lows. Price has to break above the top of the range at 1.84 would have me looking for a long.

AUDCHF - Strong uptrend has stalled and Daily is making clear lower highs and lower lows. However weekly rules and up trend is still in place. Once to watch.

AUDCAD – Price has made a lower high but needs to break and close below 91.950 to confirm downtrend and top is in place. I am waiting to see but I am favouring the short side.

GPBJPY – downtrend – The big drop happened and I had key support at 1.3930 which I did not expect to be breached on Friday, this area has been tested 4 times before and held. There is the potential for quite a bounce here if history repeats itself. However I remain a seller of rallies and I am looking at 141.50 / 142.00 for entry (if it gets there). (I am wondering, having read my forecast last week, how I managed to trade this so badly. Just goes to show reading the chart and actually trading it are two different things.)

GBPCHF – This pair is at the top of the range and looks set for a decent swing trade short here. I usually like to trade this pair but the interventions last week by the SNB (in the middle of the night) means this is off my menu whilst EURCHF is at such low levels and further intervention is possible. http://ftalphaville.ft.com/blog/2010/02/05/142601/swiss-intervention-in-asia-overnight/   Price has to break and hold above 1.71 for me to change my bearish view. In the meantime I will switch my attention to EURGBP.

EURGBP – downtrend but like a rally here off the bottom of the weekly trendline. Longer term I am bearish this pair, and I would look to sell a rally to 88.53 (my target for a long). However a break of the rising daily trendline gets me short.

EURJPY – downtrend – this pair have broken out of the 9 month range. 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 Only a break and close above 129 changes my bearish view.


EURCHF – Downtrend but No, thank you

USDCHF – uptrend handily assisted by SNB. A bottom is in place confirmed by a higher low and higher high. I would buy a dip to 1.0645, or better 1.05 if it gets down that far. Only a break and close back below 1.05 changes my bullish view.

USDNOK – uptrend – Bottom is confirmed this week with a higher high to follow the lower low. I would be a buyer of dips and I am looking at pullbacks to 5.925 for an entry to give me a cushion trying for a break of the 6.00 level. Otherwise I would buy a break above and retest of 6.00 Below 5.80 is a no trading zone for me and a deeper correction could be forming.

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. I would look for a pullback to 1.4120 / 1.4135 for a long entry. A bigger pullback to 1.40 is not impossible.

USDZAR - Uptrend, a bottom is not yet confirmed but looks possible and price has broken up out of its range. Price has stalled on a long term descending trend line from the high of October 08. Not a trade for me until it breaks this last line. I am neutral until then.

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: http://www.bespokeinvest.com/thinkbig/2010/1/25/monday-bull-market-still-intactfor-now.html

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.

Gold
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.

Analysis and some charts, Sunday 25 October 2009

So Sterling took a beating Friday with negative GDP forecast when a positive one was expected. Prospects for more quantitative easing are increasing and prospects of a rate hike move even further out. Often Sunday nights / Monday morning the trend of Friday continues before being re-evaluated in the US session or on Turnaround Tuesday (aargh). Let’s see.

Event risks this week are US GDP and consumer confidence numbers, RBNZ rate announcement and AUD consumer prices.

Despite its strong downtrend the US Dollar was the strongest of the majors on Friday as the S&P, gold and oil and risk-on trades faltered. Lower time frames suggest the dollar index could stage a counter-trend correction going into this week. It has built a strong base against USDJPY. Weekly candle is a hammer type off the 75 level, the daily is a bullish confirmation of Thursday’s inverted hammer and the 4hrly shows a double bottom off 75 suggesting good support at this level or a counter-trend rally is possible.

Indices. The trend is bullish, but markets faltered for a second week. The S&P made new highs but failed to pass the important 1100 level and then pulled back to a weekly spinning top following on last weeks doji. The Dow broke 10000 but has resistance off the 1060 level and has formed a countertrend weekly shooting star. The S&P needs to close below 1075 to confirm more downside correction or above 1100 to confirm a breakout of this range.


Crude. Weekly doji, daily big bearish engulfing marabuzo following an inverted shooting star. Crude broke out of its bull flag Wednesday and broke the 80 level out of step with the indices. It looks to have just broken a rising trendline Friday afternoon which kept me in my short instead of closing it and I am watching for more confirmation of a countertrend pullback as we start the week. My short target is 75, a 50% retrace of this months high/lows and resistance becomes support off the September high, but I realise this is countertrend and we may not get that far.  Failure to break the prev low at 77.61 and I will step aside. 4hr chart -

Gold put in a weekly bearish shooting star type inside bar following a similar candle last week makes gold look toppy with two tight range weeks. It’s in a strong uptrend but stalled with a possible bull flag forming so I would like to see the 1024 level retested successfully before I got long, or a decisive break above 1075.

Silver has a bullish weekly inside bar and a much better looking bullflag forming. Like gold I would buy a dip or a break of the flag / weekly IB.

AUDUSD – uptrend - weekly bearish doji and daily is a sideways bull flag off the May 08 swing low at 0.9275. AUDUSD is well bid and next resistance is 0.9350 – the August 08 swing high, a break of this level and the 08 swing highs of 0.9850 are in range. 0.910 support looks strong at the moment and I would not be tempted to trade this countertrend above that level …

AUDJPY – uptrend - Weekly bullish and daily doji (pause). After breaking out long two weeks ago AUDJPY has been trading in a steep channel. It is presently at the top of that channel and I expect a pullback here. A break below 83.90 and I would be looking for support at 82.00 (also 50fib) for a long entry.

NZDUSD – uptrend - Weekly bullish continuation, made new yearly highs, daily bull flag. Next resistance is 0.765 and a break above means a retest of the 08 highs at 0.8215 could be on the cards. I would not consider a countertrend short without a break below 0.7480 and target first resistance at 0.7310

NZDJPY – uptrend – Weekly and daily strong bullish continuation, this pair is approaching key resistance and 50fib level at 91.00 and I am watching price action here for direction.

AUDNZD – Pass – haha there are much better opportunities out there, unless the RBNZ rate announcement surprises …

USDCAD – downtrend - Weekly bullish continuation of last weeks countertrend hammer, daily is inside bar in a tightening range / flag. I am countertrend long this pair, looking for price action at 1.06 / 1.0650 for price action to reverse with the trend or continue.

CADJPY – rangebound - weekly is bullish continuation, daily is bullish continuation but well below the highs of the week and I would not be surprised to see more downside correction. I would pass on this one; there are better opportunities out there.

EURNZD – downtrend - Weekly hammer type candle at new lows, daily bearflags this pair is in a step climb down and a sell on rallies. 

GBPAUD – downtrend – weekly bearish, daily bearish marabuzo. Price is moving back with the trend after a modest pullback. Sell on rallies until the trend changes looking for a break of the previous low at 1.73.


GBPUSD – down trend – weekly bearish shooting star has closed back below a descending trend line that it broke up from, daily bearish marabuzo. This is a sell on rallies or a break of Friday lows with my targets 1.62, 1.61 and a break of 1.61 suggests a retest of the lows. Cable appears to be trading a range between 1.6735 and 1.5780 and is today trading mid range and at June 01st levels … which suggests the range is right where someone wants it.

GPBJPY – downtrend – Weekly long legged doji, daily bearish engulfing off descending trend line and a close back below the 50fib of the Aug highs and September lows.  I am short and have an order to add on a break of the 150 level. My targets are 147 and 145.50

GBPCHF – downtrend – Weekly sideways consolidation / bearflag in strong downtrend. I am a seller of rallies looking for this to retest the lows and 1.61 and continue down.

EURGBP – uptrend – Weekly bullish hammer type candle, daily bullish marabuzo off the 90.00 level. Possible head and shoulders forming. Chart remains bullish and a buy on dips.

EURUSD – uptrend - Weekly bullish continuation, daily sideways consolidation at 150 level with rallies extending to 150.60. Key support is 1.4830 and next resistance at 1.5185 and then 1.5240 (78.6fib retracement of the highs to lows).


EURJPY – sideways - weekly bullish continuation, daily bullish continuation. This pair is at key resistance (138.75), triple top and my favourite trade for a reversal. I will try and sell this level because I think the R:R is pretty good, targeting the bottom of the range at 129.75 which is also trend line and fib resistance. Resistance is at 136, 135.50 and 134.40. A break above 138.75 is a big range breakout for this pair and I would buy a pullback and retest of this level.

EURCHF - sideways – Pass.

USDCHF – downtrend - Weekly bearish continuation, daily consolidating at new 2009 lows just above the parity level 1.00 Trend is still strongly bearish and the consolidation right above the level suggests a break or test below could be not far off. 1.003 is the low and 1.0037 is the 100% fib extension of the drop so a bounce is possible also.


USDJPY – Up trend – Weekly bullish continuation, daily continuation with key resistance at 92 – 92.55. I am long but have tightened my stop as a reversal to the longer term down trend is not out of the question at this level.

USDNOK – downtrend - Weekly bearish inside bar, daily bearish consolidation above the 5.50 level. This has come a long way without correction but is still a sell on rallies or a break of the 5.50 level.

USDSGD - downtrend - weekly inside bars, daily sideways consolidation below the 1.40 level support broken at the beginning of the month. Price is in a range between 1.40 and 1.3850 for the past three weeks and I am watching for a breakout trade.

USDZAR - sideways, long term downtrend – weekly & daily sideways consolidation above the August 08 lows at 7.20. I still like this long if the indices correct down and the dollar rallies. The spread is ugly but the R:R looks really good so I am still watching for a break of the descending weekly resistance line.

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 ...

Analysis and some charts

This week starts with a three day bank holiday in Japan, and the big Eid Al Fitr holiday throughout the Muslim world and then we have the FOMC statement midweek. No rate change expected from FOMC but the comments will be closely watched. For those reasons it could be a quiet and sideways start to the week.

USD index has put in a weekly long-legged doji, the first pause in a long slide. This can be a moderately reliable reversal signal (although more reliable on tops than bottoms) so what happens next will show the way. It’s not a trend change, not a reversal even yet, but it does show indecision in the market. The daily shows it has gained some traction although Friday’s candle shows some upper wick … but I am sure not to many would want to be long dollar going into the weekend. The bearish dollar sentiment is so extreme that some correction and balancing would be logical.  The stories about the dollar being the new carry trade however are everywhere http://www.bloomberg.com/apps/news?pid=20601110&sid=apUH.Ybqzwh8

Indices. The trend is bullish, the weekly and dailies are bullish and the indices have held every level they have climbed to without any significant pullback which is very bullish. There is no point in fighting the trend. Having said all that this past week the indices made new highs and then closed below the previous days lows, not a good sign for most as it was off key levels. This is the Dow chart showing levels (the top of a weekly inside bar that controlled the price range for weeks afterwards). Although the risk of correction increases the higher we go this is a market that does not want to go down (the US Govt still have some QE money) but we could have a sideways pause here.   There is apparently some money leaving the indices too: http://www.businessinsider.com/chart-of-the-day-long-term-mutual-fund-flows-into-us-domestic-equities-2009-9

Crude. Weekly is bullish but range bound, the daily has rejected the 73.50 level and closed the week above my 72 level. There is the possibility of a bigger bull flag break out and retest setting up. However crude is vulnerable to any strengthening in the dollar this week which would cause it to fall off. It lagged other commodities in every dollar rally last week and has been falling hard on dollar strength. I am watching for a retest of $70

Gold put in a weekly doji with the high 6 pips short of the December high. Daily is in a bullish stair climb with no indication to short yet but the weekly candle is a sign of indecision, possibly a reversal in the making.  The would be an Evenig Star reversal pattern in Japanese candlesticks. Failure to break this high keeps it in the flag consolidation pattern with a retest of the 950 level looking more likely. Waiting for more information from here.

Silver has finally broken the 17.00 level but failed to maintain above it although it is now firmly in the congestion range from 2008. Weekly is an indecisive doji whilst the daily pattern remains a bullish stairclimb. The dollar will determine which way it goes from here. I will sit out and wait for more information.

AUDUSD – uptrend - weekly bullish continuation, daily made new highs for the year but then fell back to find support on previous resistance. Looks all set for the next run up. This is still a buy on dips with no indication to short yet … I am watching for price action at fib level at 0.9032 if reached …

AUDJPY – sideways - Weekly bullish but range bound, daily is coiling up in a tightening wedge and needs to break out to tempt me either way. The big 50fib level is at 80 and has held as good resistance this far and I would not go long into this level.

NZDUSD – uptrend - Weekly bullish continuation, made new yearly highs then pulled back to key weekly SR level. Daily is in a bullish stair climb. Bearish divergence warns of failure but no indication to short yet. A close below 69.00 and it is back in a range and a possible drop to the 65 area support.

NZDJPY – uptrend – Weekly and daily are bullish and has broken out of a bullish descending wedge and is above 38.2fib with targets all set for 66.00, it’s a buy. Short term support is at 64 and a break below 63 and the uptrend is broken and it is back in the range.

AUDNZD – downtrend – weekly bearish engulfing was followed by bearish weekly inside bar. Daily is sideways in wedge I would short a break of the weekly candle with a first target of 1.20 and then I am looking for 1.17

USDCAD – downtrend - Weekly bearish engulfing bar made new lows for the year, daily inside bar following a shooting star after a pullback in a downtrend. This pair has been very choppy but the trend is clear. I would only buy this now on a daily higher low. Until then it is a sell and looks set to retest 1.06 and then 1.0330 which is a multi year SR level and 61.8 fib. It’s a sell until the signal changes.

CADJPY – long term uptrend, medium term downtrend - weekly is bullish but sideways, daily made a dbl bottom and then rose in continuation of the longer term trend. Looks as though it has broken out of a bullish descending wedge pattern I really like this long ... it is a buy for me on a break of 86 SR level.

EURCAD – medium term downtrend, longer term uptrend - Weekly doji off descending upper resistance line that goes back to December highs, daily shooting star could be putting in a lower high. The price action I was looking for to sell off 1.58 / 50fib & down trending resistance line has happened and like this short to perhaps 1.50 level. The long term trade here is a break out of this wedge back to the 1.75 level and I will be watching for a break.

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 to retest the bottom of the wedge at 1.60 If the head and shoulders patterns succeeds then the pattern projects back to 1.50. This is a sell on rallies but could encounter choppy consolidation.

GPBJPY – downtrend - Weekly bearish continuation of a double top pattern, daily bearish continuation in a downtrend. Sell on rallies. I am looking for a break of 1.468- neckline support targeting the 1.38 level next. Thank you, no need to gift wrap. A break up through the down-trending resistance line from the dbl top would target a retest of 153.25 highs.

GBPCHF – downtrend – Big bearish weekly marabuzo, daily bearish continuation this pair is closing in on possible support and my first target of 1.66 area and 50 fib level. Chart remains bearish and sell on rips (rallies) but long term trend is up and I am looking for a daily higher low or price action at the 50fib point.

EURGBP – uptrend – Weekly bullish daily bullish, Chart remains bullish and a buy on dips. Long term the trend is down and I would be looking for price action around 91.0 and the 50fib level.

EURUSD – uptrend - Weekly bullish continuation, daily sideways consolidation. EU has passed the Dec 08 high at 1.4723 and the next level is 1.4871 the Sep 08 high and 1.4850 is a 100% fib extension. There is significant bearish divergence on the daily chart but no indication to short yet. Price action could entice me into a counter-trend short targeting 1.43 SR level in the hope it would turn into a longer term move.

EURJPY – sideways - weekly bullish engulfing and daily bullish inside bar but range bound and no clear direction yet. Has broken a down trending resistance line in place since the beginning of August and looks bound for 1.3613 highs but not a convincing trade for me.

EURCHF - sideways – I don’t know why I look at this, I have not traded it since last Autumn. It has been trapped in the same wedge since last October. I have had a sell stop order just below 1.50 for months but it’s never going to happen. Pass.

USDCHF – downtrend - Weekly bearish continuation, daily bearish inside bar at new lows for the year. 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 vfor a corrective bounce to the 1.07 levels and go from there.


USDJPY – downtrend – Weekly bullish inside bar, daily inside bar in bullish correction of longer term downtrend. I remain bearish until 91.80 is re-tested but could correct all the way prev swing high at 93.30 and still be bearish so awaiting price action to sell again.

USDNOK – downtrend - Weekly bearish continuation, daily sideways. A break of the descending resistance line from early July would get me long counter-trend for a corrective bounce, targeting 6.14 and then 6.20-6.27 areas. Until then this is a sell on rallies or another break to the downside.