Weekly Trade Commentary: 2nd Dec 2012

Related article: Commentary: 25th Nov 2012

Hi Readers,

The USD index closed the week at around 80.2 (again). As mentioned in last week’s commentary, this is a pretty strong level. Buyers and sellers are in equilibrium and, as evident, most majors and minors pairs closed the weekly bar as doji.

At the moment, my short term view for the USD index is unclear. Hence, I will wait for price action for further confirmation for any potential set ups.

The following is my watch list for the week:

(Click on image to Larger View)

  • EURJPY – The chart above is a weekly chart of this pair. Price is currently testing a decent resistance level that has been testing in the past (Orange arrows).

Price is also testing a downward channel. My concern for the channel is that it has been broken twice in the past – end of Mar 2011 and early Jul 2011. Nonetheless, it has been respected more often than the other. More importantly, the channel has been well intact since Aug 2011.

For those Fibonacci users, price is also testing a 0.782 level.

(Click on image to Larger View)

  • EURGBP – In line with my commentary on the 21st Oct (see article), this pair has recently made a new Higher Low (purple box). Hence, my view for a break above the 0.814 resistance level is still valid. I’m keeping a close eye on this pair with the hope of finding a good set up. However, if price goes below the previous low of 0.792, my set up becomes invalid.
(Click on image to Larger View)
  • EURUSD – The weekly chart above is pretty much similar to the one last week. However, the bullish weekly bar (for week ending 25 Nov) did not follow through and the week closed as a doji. This is a pretty un-decisive pair which is also sitting right below the 1.3 level.

On top of that, both the triangle pattern and ABC pattern, which I mentioned last week (see article), remains valid. In line with the USD Index, I’ll need more confirmation before taking the trade.

(Click on image to Larger View)

  • GBPUSD – This pair is showing very similar patterns to the EURUSD. Items of interest includes:
    • It is currently testing the 1.6 price level (a fairly significant price level –  see Green arrows)
    • It is on the top of a daily downward channel
    • Its is within a triangle
  • AUDJPY and NZDJPY – As mentioned last week (see article), my view for this pairs are still valid and I’ll continue to watch them closely.


Just a quick reminder:

  • Non-Farm day is on Friday.
  • December is generally a quiet towards the end of the month as the market is fairly thin during festive period, so do trade with caution.

If you’re taking a break or travelling during this Festive period, then, do have a great time!

Thank you and Happy Trading!



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