Weekly Trade Commentary: 25th Nov 2012

Related article: Commentary on 18th Nov 2012

Hi Readers,

The USD index closed the week at around 80.2 which happens to be a strong level. The Friday bar was a strong bearish but (very) extended. This could only mean 2 things – (1) more momentum downwards or (2) an over extension which would lead to a reversal to go north. In short, I don’t have a bias at the moment but will only wait to see what happens early part of next week.

The following is my watch list for the week:

(Click on image for Larger view)

  • EURUSD – The above is a weekly chart of this pair. From my commentary from last week (click here to read) I was expecting this pair to pullback a little before it breaks below 1.267. However, none of that happened. In fact, the weekly bar formed a long bullish momentum bar. That just shows that the buyers are very likely to be back. Just to top it up, the bullish bar is just a confirmation of the new up trend channel (green arrows).

The next short term resistance is going to be around 1.315. If price breaks above it with conviction, that will be a confirmation of an A-B-C pattern where I’ll be looking for a D target.

On the other hand, price has actually formed a symmetrical triangle – a classic indecision pattern. While my bias is long, I’m going to stay out until I get more confirmation.

(Click on image for Larger view)

  • AUDJPY – As the Yen (JPY) related pairs surge higher, this pair is becoming more interesting. 88.8 level shows a strong weekly resistance level. The fact that this has been ranging between 73.9 and 88.8 since mid 2009, it shows that the potential to maintain within this range is quite high. I’ll definitely keep a close eye on this although it might take awhile to materialise.
  • NZDJPY – very similar to AUDJPY, this pair is ranging between 57.9 – 69.3. Let’s see if we can find a set up on either/both of them.

 

Thank you and Happy Trading in the week ahead!!

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