Weekly Trade Commentary: 9th Dec 2012

Previous commentary: Commentary on 2nd Dec 2012

Hi Readers,

The USD index made a low at the start of the week but failed to stay there. Instead, the weekly bar closed slightly higher (apprx 80.4). The low in the middle of the week is also a higher low (compared to the low from mid-Sept and mid-Oct). With that, my bias is starting to gear towards a bullish dollar with a short term target of apprx 81.4 (the high from mid-Nov).

I will be watch the USD related currency pairs with similar view. Remember that Christmas is approaching and the market is getting thinner. Hence, I’ll be pretty careful with price movements in the coming weeks.

 

The following is my watch list for the week:

(Click on image for larger view)

  • NZDJPY – The chart above is a weekly chart of this pair. I’ve been watching this pair for a while now and price is approaching a strong weekly resistance zone (between 68.9-69.5). As always, price might break or bounce at this level. Since it has bounced a few times in the past (Green arrow), the probability is high that it will repeat it again. However, nothing is guaranteed, so only trade if it meets your rules.
(Click on image for larger view)
  • USDJPY – The chart above is a weekly chart of this pair. In line with my comments on the 4th Nov, the higher low from Sept 2012 give me comfort that price is bullish. Since then, price has broken above 80.5 level and has been consolidating on a tight range for the last 2 weeks. It’ll be great to find a long set up if price pullsback to 80.5 before going long again (orange path).

However, as price has been very bullish recently. Hence, I’m not surprise if it breaks above 82.7 without a pullback. If that happens, the chances of a pullback will be much higher as price would have been over extended by then. Again, I’ll try to find a long setup with a potential entry around 82.7 (blue path)

(Click on image for larger view)

  • Gold – The chart above is a daily chart of Gold. Price is currently sitting on a soft support level (tested mid 10/2011, early 11/2011, end 03/2012 and early 05/2012) around 1695 and a potential upward channel (Green arrow). Truth to be told, both of these are not strong enough reasons as both of them are pretty weak set ups.

However, there are 2 more reasons why my bias for Gold is long:

    1. Overlapping Fibonacci Retracement levels – 50% Fib (Blue) and 78.2% Fib (Orange)
    2. Price Action – Price formed an Inside bar pattern on Thu and followed immediately by a Low Test bar on Friday, this was a False Breakout which failed to go south. Hence, the bulls are back in control.

With that, I’ll be watching this early part of the coming week for further confirmation of a long setup.

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Thank you and Happy Trading in the week ahead!!

 

 

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