Monday, February 20, 2012

Week 8 Analysis

Commodity dollars Vs. Usd

Aud.Usd, Nzd.Usd and Usd.Cad have experienced a lot of sideways movement last week. Aud.Usd is roughly trading between 1.0525 and 1.0775 or about a 200 pip channel. I suspect the fight between the bulls and the bears will be over this week and this pair will show which way it wants to go. It has the potential to drop lower towards 1.0525 and find support on the inner trend line before bouncing back up. If the bulls take control they will be after the high around 1.1060’s area. Nzd.Usd shows a similar picture with the pair roughly going between 0.8280 and 0.8380 or about a 100 pip channel. Interesting enough this pair kept making new highs last week and I believe this will continue this week as well. It still has the probability to drop further towards 0.8110 before continuing its move north. If the bulls take charge they will be after the high around 0.8570. In any case, wait for the confirmation before considering entering these pairs. Usd.Cad is currently heading south; there was also some sideways movement noticed here. The bears are currently after important lows around 0.9789 and 0.9685 so proceed with caution around these areas. Just like the other two, this pair can also retrace a bit further before continuing further south. Keep in mind a lot of fundamentals are coming out this week, especially related to the commodity dollars so proceed with caution trading these pairs.

Commodity dollars Vs JPY

Aud.jpy, Nzd.Jpy and Cad.Jpy had impressive rallies last week and I suspect this bullish trend to continue for some time to come. All 3 are over-due on their retracements on the higher time frames so I suspect a deeper retracement coming soon. Aud.Jpy just took out a major high and is currently retracing with S1 being around 84.00 but might find support before that. The bulls will be after the highs around 87.15 this week. Nzd.Jpy just reached its target on its 3rd fib swing on the bullish move. A small retracement is expected before a further move north. The bulls will be after 68.89 area. Cad.Jpy also took out a major high and reached its fib target not too long ago. This pair is currently retracing with S1 being around 79.50 and S2 at around 79.00. The bulls in this pair will be after the high around 82.55; this is also where the current fib target resides.

European countries Vs. JPY

Eur.Jpy, Chf.Jpy and Gbp.Jpy all completed their fib targets this week and are on their second swing. I anticipate a small retracement before these pairs continue their moves north. The current fib target for Eur.Jpy is 109.73, for Chf.Jpy it is 90.53 and for Gbp.Jpy it is 131.34 but I would not place my target after 130.75 area.

Eur.Usd and Usd.Chf

Eur.Usd found support in the middle of the week and continued to rally north especially on Thursday and Friday. The only issue I have currently with this pair is that it broke through major support levels last week which in my eyes, challenges the bullish momentum. If the bulls dont take out 1.3284 (my downward subswing) than it is very much likely this pair will continue going further south. However, with investors currently showing some optimism with regards to the euro area, I believe this pair will continue to rally north this week. The bulls will be after the high around 1.3510 with a fib target of 1.3753. Usd.Chf shows behaviour of a lost puppy—not sure what direction it wants to take. There is pressure being put by the bears and I suspect this pair to continue to tank this week. The bears will be after 0.9057 and the fib target of 0.8957.

Gbp.Usd

The cable is definitely one of my favourites to trade at the moment. It found support around the back side of the channel and is currently heading further north. I anticipate this pair to continue to rally this week. The bulls will be after 1.6619 and the fib target of 1.6369 so proceed with caution around these areas. Also, keep in mind GBP and USD have strong fundamentals coming out this week.

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