Monday, February 13, 2012

Week 7 Analysis

Commodity dollars Vs. USD

The commodity dollars further weakened Vs USD on Friday. Aud.Usd is pushing up against resistance levels and it looks like this pair wants to retrace further on the higher time frames. If the bulls fail to make a new high and take out the low at 1.0630’s area, than this pair has a high probability of retracing further. The first level of support is at 1.0525, and if the bears take out this level, S2 is around 1.0400 and S3 around 1.0200. Nzd.Usd managed to hold off the bears a little better and is not far away from support levels. It took out previous highs around 0.8240 area two weeks ago and it might find support on the backside of it. If this area doesn’t hold S2 is around 0.7960. Usd.Cad rallied on Friday and decided to make new highs. If this pair doesn’t take out support around 0.9950’s it is possible to see this pair continue further north this week. It will meet resistance against the downwards trend line so be cautious in going long after this point. The fib target on the sub swing on this pair is at 1.0107.

Commodity dollars Vs JPY

The yen also decided to rally against the comm. Dollars on Thursday and Friday of last week. Aud.Jpy is sitting at resistance levels around 84.00. The bears took out a major area of support on Friday which seriously challenges the current bullish momentum. This leads me to conclude a further retracement is likely to happen this week. If the bulls don’t take the high than this pair has a high probability of continuing further south. If the bears break the inner trend line the next level of support would be around 81.50 area. The NZD showed more resistance towards the yen but never the less decided to follow in similar footsteps as Aud.Jpy. Currently this pair is sitting at critical levels. If it doesn’t make a new high this pair will come down towards S1 at 63.70’s and if this level doesn’t hold S2 will be around 62.50. On the other hand if this pair makes a new high than I anticipate this pair to go sideways for a while before continuing further north. The cad is currently the weakest member of this trio. Same as the other two this pair is pushing up against resistance. S1 for this pair is at 76.70’s if this level doesn’t hold I expect a further retracement towards the outer trend line. The Yen has news coming out this week that can sway these pairs one way or another. So proceed with caution.

Aud.Cad and Aud.chf

As expected both pairs had a nice move down last week. Aud.cad is currently finishing up its retracement and I anticipate this pair to continue further south. Aud.cad has a fib target of 1.0585 and strong support levels around 1.0550’s. If by any chance this pair makes a new high and the bears fail to take out the low at 1.0657, than I would stop looking for shorts. Aud.Chf is currently on its second fib swing down with a target of 0.9628. Be very cautious in going short beyond 0.9700 levels because this is where strong levels of support can be found.

European countries Vs. Jpy

Gbp.Jpy, Chf.Jpy and Eur.Jpy held up against the yen much better last week in comparison to the commodity dollars. Depending on how strong the yen will rally this week these pairs might see a small retracement on the higher time frames. Eur.Jpy is sitting on the backside of resistance levels around 102.38 and if this level of support doesn’t hold expect a further drop towards the upwards trend line on the daily. This pair can potentially come down towards support levels around 100.80. Chf and Gbp are a bit stronger against the Yen than the Euro but still have a potential to come down a bit lower.

Eur.Usd and Usd.Chf

Eur.usd had an aggressive move down on Friday; the bears broke through support levels into the sideways channel. The pair is currently retracing to meet the top of the channel, if it doesn’t break above it I see this pair coming down further towards the bottom at around 1.3050. If this pair does decide to rally further north the bulls will be after the high around 1.3550. The fib target of the upward swing is 1.3611. Usd.chf is currently stuck in a sideways channel between 0.9100 and 0.9225. If the dollar does indeed decide to rally than we can expect the bulls to go after the high at 0.9340. If the bears break support anticipate a further drop towards 0.9060’s area.

Gbp.Usd

The cable is currently leaning against the top of the channel. On the 4H and the daily we can observe a bearish momentum starting to build up which can possibly send this pair back into the channel towards the bottom. This pair can find support around 1.5660’s and if this level fails this bears will be after the bottom of the channel around 1.5400-1.5450 area.

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