Weekly Trade Commentary: 28th Oct 2012

Related article: Commentary: 21st Oct 2012

The USD Index ended the week at 80.1 pts. In line with my comments from last week, I will need a confirmation of a bounce or a break off this level before I get a better sense of direction on the index. At the moment, the index is still within the 79-80 pts range.

The following is my watch list:

  • GBPCHF – This is one currency pair that I’ve not visited for awhile. As shown above, this pair is giving us a potentially good set-up. The following is a Daily chart of this pair. From the chart, it shows that there is a decent Resistance level at 1.51. This level has been tested in the past – Oct 2010, Apr 2011 and May 2012.
(Click on image for Larger View)

A confluence of Price Action (daily high test bar), Price Trendline/Channel (Green arrows) and Resistance level (in the past and in recent price action – Orange arrows). For those who uses the Fibonacci tool, there’s a 61.8% retracement level.

Let’s see if we can find an good entry for this.

 
(Click on image for Larger View)
  • EURJPY – The above is a Weekly chart of this currency pair.

My interest on this currency pair continues to grow especially because Price Action is now in my favour. On Friday, the weekly bar closed at the lower end of the candlestick – forming a weekly High Test bar. I’ve also revise my channel (see above) and the High Test bar finishes very nicely on the top of my channel. Good cyclicity as well with Lower Lows and Lower Highs. A 61.8 Fib retracement level is just icing on the cake.

  • EURGBP – As discussed in last week’s commentary (click here to read), there was a Resistance level around 0.814.This resistance pushed price lower with the week ending with a lower high. It is also currently sitting on a upward trendline. I’ll keep an eye on this pair to see what happens at the start of the new week before making any decisions.

On a separate note, there is a change in Day Light (Saving) time in Europe this week as BST changes to GMT. The Americans will be changing their clock next weekend. Also, US Non-Farm data will be out this Friday.

Thank you for reading and happy trading!

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