Pre-Week Analysis (November 25, 2013)

I thought about not doing pre-market analyses anymore but I guess you guys really like looking at setups. So without further ado, here are my thoughts on today’s currency scene and my two chosen major setups for this week. Enjoy!

Fundamental Picture

As Forex Gump and Pip Diddy have been mentioning in their posts, the lack of major economic catalysts are inspiring central banks to get busy at talking down their currencies. The ECB officials, in particular, have been giving speeches left and right about how they’re not out of options. RBA Governor Stevens also took advantage of the AUD bears’ momentum when he timely revealed that a currency intervention is on the table. Of course, we can’t forget that some Fed members are back to hinting at tapering some time soon.

Surprisingly, it’s the yen bears that have been the most successful in their cause so far. Thanks to an upside break in USD/JPY’s technical levels, Nikkei gaining ground, and the BOJ promising that they’ll act “if needed,” there’s no stopping the yen bears yet. Let’s see who wins this week’s Race to Debase!

Potential Trades

GBP/USD: Bullish

GBPUSD (1)

I’m watching GBP/USD closely to see who will win the battle for supremacy. Fundamentally I think that GBP still has a lot of room to rise especially since the U.K. has generally been printing better-than-expected data. Maybe I’ll wait for the pair to break above the 1.6200 before I enter any long trades. Of course, I should also be ready in case Carney’s speech this week inspires the pound bulls to wake up!

USD/CHF: Cautiously Bearish

USDCHF (1)

I’m overall bullish on the dollar (except against EUR, GBP, and NZD) but I have to say that the falling channel and SMAs are convincing me to at least consider a USD/CHF short. I think a short trade is worth it around the .9130-.9150 area since it’s close to the SMAs, the falling channel resistance, and an area of interest. What do you think?

XOXO,

Huck

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  • Kootz

    Hi there,

    I also am trading this pair, and I am currently short at 0.91225 @21:38 when the pair saw a reversal from the channel.

    I’m new to trading though, and I’m confused by the “area of interest”, which I assume is the purple rectangle? What is this area?

    Also, how are you using the SMAs to trade in this example? I purely went off the channel.

    Many thanks in advance.

    • Hucklekiwi Pip

      Hey Kootz!

      Are you still in on your USD/CHF trade? Yep, the purple mark is the area of interest because it’s near the channel’s resistance and it has held as support before. It’s also near Fibonacci lines (if you like drawing Fibs). As for SMAs, I’d probably use them as a basis of my stop losses.

      Did I answer your questions? 🙂

  • Alibabababy

    Concerning GBP/USD I would consider it a range play for now…so short the top of the range and target the middle or bottom

    • Hucklekiwi Pip

      Good call on shorting early this week! It looks like it has broken above the resistance for now though. Are you thinking of buying at the breakout? 🙂

      • Alibabababy

        Got stopped out on this one…-30 pips. Looking for confirmation of the BO. A successfull retest of 1.625 would be ideal and I would look to go long for 300 pips taking profit along the way 🙂