Monday, January 30, 2012

Week 5 Analysis

Weekly Analysis

Commodity dollars Vs. Usd

Commodity dollars have been on fire since mid-end December and the bullish trend isn’t going to stop anytime soon. With special thanks to Mr. Bernanke with his wonderful gift of QE3 we can anticipate a further weakness of the dollar across the board. On the technical side of things, Aud.Usd is retracing on the higher time frames at the moment, we can potential see this pair come down to 1.0400 area where levels of support can be found. The bulls are after the 1.0750-1.0770 previous highs, so it’s quite possible for the bulls to keep the strong momentum and rally to those levels before we see a nice retracement on the daily. The fib target of the current swing is 1.0734 so proceed with caution around this level. Nzd.Usd Just took out an important high at 0.8242 area which of course signals a continuation of the upward momentum. This pair is also due for a retracement on the higher time frames, its currently hugging the 1.27 resistance level on the fibs and if this pair breaks the upward trend line it is quite possible to see this pair drop to support levels around 0.7900’s if support at 0.8100 doesn’t hold. The fib target for this pair is 0.8465. Usd.Cad finally broke through major support levels on the daily and we can anticipate this pair to continue further south. The bulls might test the back side of support at 1.0050’s and if they fail to rally above it, The bears will take back control and push further south to take out the low at 0.9890’s. Once the bears successfully take out that low, they’ll be after the fib target of 0.9689. Keep in mind Cad is releasing major fundamentals this week, which can push this pair either way.

Commodity pairs Vs. Jpy

Aud.Jpy, Nzd.Jpy and Cad.Jpy are all retracing at the moment. Aud.Jpy is headed towards support levels around 79.75-80.25 area. The bulls in this pair are after 84.00 area where both the previous high and the fib target can be found. Nzd.Jpy completed its fib swing last week and is currently retracing to meet support around 62.40’s, if this level doesn’t hold the next level would be around 61.00-61.50. The bulls in this pair are after 64.60’s so be very cautious around this level. Cad.Jpy also completed its fib swing last week and is heading south as we speak. This pair broke through resistance levels around 77.00 but failed to stay above it, Being the weaker of the trio, this pair doesn’t have strong support levels coming up except the upwards trend line on the daily. This is where we anticipate this pair to bounce back, but keep in mind the cad is releasing fundamentals which can move this pair aggressively.

The Euro against the Commodity dollars

For the most part the charts on these pairs look like roller coaster rides lately. The bears and bulls are fighting for control and we observe a slightly bullish momentum on eur.aud and eur.cad. Both pairs made new high’s last week. Eur.Aud has a fib target of 1.2525. Eur.cad has the strongest bullish momentum out of the trio and the bulls are after the fib target of 1.3321, this is also where resistance levels off the weekly can be found. I would be extremely cautious in having long positions after this point. Eur.Nzd is stuck in a 250 pips channel; I see this pair continue sideways until the bears take over. Overall I dont see this trend continue on these pairs, with the euro crisis not being resolved anytime soon, we can anticipate further south movements over the medium to long term.

The European countries Vs. Jpy

Gbp.Jpy and Chf.jpy completed their bull crowns last week and both pairs are on their second swing. Gbp.jpy completed its fib target near resistance levels seen on the daily and for the bullish momentum to continue the bulls must break through this resistance and take out that high around 122.75, if they fail to do so, than the bullish momentum would be seriously challenged and we might see the bears take control of this pair. Chf.Jpy took out an important high on the daily and so this pair will most likely continue further north. It found support around 83.50 and is currently after its fib target of 86.28. There is a very slight chance this pair will retrace further towards 81.75 before continuing further north. Eur.jpy missed its fib target by 15 pips and the bulls are going to go after it again this week. This area is also significant for the bulls because of the previous high around 102.50.

Eur/Usd usd.chf and Gbp.Usd

Eur.Usd and Usd.Chf both completed their crowns last week and both are on their second swing. Eur.Usd is on its way retracing to meet lower level of support at 1.3150’s and if this level doesn’t hold it might drop to lower levels at 1.3050-1.3100 area. The fib target is 1.3444. Usd.chf has the bears in charge and is currently after its fib target of 0.8956. Before the bears can score this point they must get past 0.9050’s area, this area proved to be support in November and December of last year, so we can expect a retracement here.

Gbp.Usd

Gbp.Usd broke through the downward trend line from the daily and is currently heading towards 1.5780 area where the top of the channel can be found. If the bulls break through this level of resistance this pair will continue rallying north and most likely reach its fib target of 1.5830, I would proceed in extreme caution buying this pair at the moment because if resistance holds and the upward trend line breaks, than the bears will knock it down towards the bottom of the old channel.

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