Monday, February 6, 2012

Week 6 Analysis

Keep in mind the commodity dollars have big fundamentals coming out this week so proceed with caution.

Commodity dollars Vs. USD

Aud.Usd Took out really important highs last week at 1.0750’s area. On the flip side this area represents strong resistance and it has been shown in the past the bulls have failed to rally above this level.....twice. If the bulls fail to rally above it this time than we can see this pair retrace towards the inner trend line and if this level of support breaks the next level of support is around 1.0375-1.0400 area. This pair is over-due on its retracement on the daily and I would be very cautious in going long on this pair at this point. The Nzd.Usd took out the high at 0.8240’s and broke through resistance levels with momentum last week. This pair has also seen aggressive move towards the north and it’s currently due for a retracement. It can find support on the back side of resistance at 0.8250 and if this area holds the bulls will be after the high at 0.8570’s. On the other hand if this area doesn’t hold we can see it drop further towards S2 at 0.8100 and S3 at 0.7850. Usd.Cad continues its move south. The bears are after the lows at 0.9890’s where we can expect a small bounce north before continuing south towards 0.9780.
A big portion of the moves this week will be determined by the fundamental announcements. So proceed trading these pairs with caution.

Commodity dollars Vs.Jpy

Just like their counterparts above these trios are currently running with the bulls. All 3 experienced nice retracements on the higher timeframes last week which makes me more comfortable in buying these pairs. Aud.Jpy is currently after its fib target of 83.94 but keep in mind the news has the ability to push this pair further south towards its outer trend line.. Nzd.Jpy is leading in the pack and the bulls are after the high at 64.50’s. I would expect a small retracement here and continuation towards the north. Cad.Jpy showed great moves north on Friday and if the bulls decide to continue north they will be after the high at 79.60’s.

Euro vs. Commodity dollars

Eur.Aud, Eur.Nzd and Eur.Cad all broke through important level of support last week and are currently heading further south. Eur.Aud and Eur.Nzd are both in free fall with no past support area’s in sight making record lows. Both pairs might decide to rally north to test the back side of support, for Eur.Aud this is 1.2280’s area and for Eur.nzd this is 1.5900’s. Eur.cad is heading south to take out that low at 1.2870’s. I would be looking for short opportunities on these pairs. Especially if any negative news comes out of Europe.

European countries Vs. Jpy

Gbp.Jpy, Chf.Jpy and Eur.Jpy experienced nice retracements last week. The bulls in these pairs are after their previous highs. For Gbp.Jpy the bulls are after the highs at 121.96 and 122.75. Chf.Jpy is after 84.67 and 85.79 and Eur.jpy is after 102.21 with a fib target of 105.41. Be very careful trading these pairs if the bears take out the upwards trend line.

Eur. Chf and Gbp.Chf

Iam intrigued by both pairs because they both decided to crown on the 4H last week. Eur.Chf is currently heading towards support levels at around 1.2050’s and if support hold look for a move towards the north. The fib target on this pair is 1.2110 so please proceed with caution after this area. Gbp.Chf is an ugly pair to look at with its aggressive retracements. Never the less, the bulls took control of this pair and are currently after the fib target of 1.4679. For those who can’t stomach roller coaster trades, I would advice staying out of this pair. If you do decide to get in wait for the pair to break through resistance levels at 1.4550.

Eur.Usd and Usd.Chf

Eur.Usd impressive move towards the north came to halt and transformed the bullish momentum into sideways movement. It is currently going sideways in a channel between 1.3070’s and 1.3200’s. Investors are waiting to see what news is going to come out from Europe this week before deciding to be bear or bull. Be very careful in placing your position on this pair this week without considering the market sentiment. If the bears do decide to take control of this pair we can see it come down to support at 1.2850-1.2950, if support doesn’t hold the bears won’t have mercy on this pair. On the other hand if the bulls decide to rally north than the fib target of this swing is at 1.3454. Usd.Chf shows the opposite picture, no surprise here. It is currently going sideways also in about a 100 pip channel with resistance levels at 0.9260’s. If the bears break out of the channel the next level of support will be around 0.8950’s.

Gbp.Usd

This pair had an impressive rally north and took out strong levels of resistance with momentum. The bears failed to bring this pair back into the channel on Friday and had a bullish formation at support levels. This is where I executed my trade. At the moment the bears are retesting the support around 1.5770’s and if this area holds expect a continuation towards the north with a fib target of 1.6098. If the bears break through support than it has a high probability to continue south to meet the bottom of the channel at around 1.5416. Keep in mind the pound has some news releases this week so proceed with caution when trading this pair.

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