Comdoll Trading Kit (April 23-27, 2012): Midweek Market Analysis

It’s that time of the week, guys! Wanna know what market themes have been influencing currency price action so far this week? Take a look at my list!

Market Themes

Political and contagion concerns in the euro zone
High-yielding currencies started the week on the wrong side of the charts as investors worried about the euro zone’s political and contagion problems. For one, failure to reach an austerity agreement led to resignations in Netherlands, while Sarkozy had trouble with the first round of elections. Both events point to a more difficult process of decision-making in the euro zone at a time when European officials need to make decisions fast. Meanwhile, 10-year Spanish bond yields inched closer to the 6% mark on Monday, which fueled rumors that Spain might be the next Greece.

Interest rate speculations
If you’re looking for examples on how interest rate speculations affect price action, then look no further than this week’s charts! The pound has been unstoppable since the release of a not-so-dovish MPC decision last week, while then yen has been taking hits against its counterparts on rumors that the BOJ would add 5-10 trillion JPY to its asset purchases. Oh and who could ignore a possible interest rate cut by the RBA after a weak CPI reading from Australia?

QE3 from the Fed?
I know, I know, I’ve already talked about this in my Q1 2012 review, but apparently, the markets aren’t over this topic either. Worse-than-expected reports from the U.S. yesterday dragged the Greenback lower across the board yesterday, as it increases the possibility that the Fed might be inching closer to a QE3 after all. Will the Fed put on its dovish wings in its FOMC statement today?

Comdoll Review

Enough about the markets, let’s zoom in on the comdolls!

Comdolls

The Aussie and the Kiwi took hits for two consecutive gains as Australia’s PPI and CPI data supported rumors of an RBA interest cut by May. Not even slightly positive manufacturing data from China or New Zealand’s strong visitor arrivals and credit card spending reports were enough to entice the Aussie and Kiwi bulls!

Meanwhile, expectations of a BOC interest rate hike kept the Loonie well-supported early in the week. The comdoll gained sharply against the dollar at the release of strong wholesale sales from Canada, and the strength continued even when the retail sales data didn’t follow up on the wholesale sales’ optimism.

Will interest rate speculations continue to push the Loonie and the pound higher and drag the Aussie and the yen lower? As always, your thoughts and opinions are welcome!

Hope you’re having a good trading week!

Comdoll Event Highlights for April 23-27, 2012

Calendar

A quick look at this week’s comdoll events would reveal that there are plenty of opportunities to trade the news. For the first couple of days of this week, it looks like Australian inflation data could dominate the airwaves and it seems that AUD/USD is off to a weak start with poor PPI figures.

Brace yourselves for some fireworks on Wednesday as the Fed is set to make its rate statement and give its growth and inflation forecasts for the U.S. economy. On top of that, NZD/USD price action could get much more exciting as the RBNZ is also scheduled to make its monetary policy decision.

The last couple of days of the week seem to be a bit lighter, but the U.S. advanced GDP release could still give some last-minute pip-catching setups so don’t miss out on that!

Now let’s take a look at the significant inflection points on our comdoll charts:

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0370
0.9927
0.8177
Previous Week High (PWH)
1.0419
1.0034
0.8254
Previous Week Low (PWL)
1.0304
0.9865
0.8116
Top Weekly ATR (tWATR)
1.0482
1.0002
0.8268
Bottom Weekly ATR (bWATR)
1.0258
0.9852
0.8086
Other significant levels
1.0300, 1.0400
1.0030, 0.9850
0.8130, 0.8250

In case you’re wondering what ATRs are all about and how I computed those figures, make sure you check out my entry explaining my trading strategies.

If you’ve got any trade setups you’d like to share, you know where to reach me!

@Happy_pip Twitter
Playing with Comdolls Facebook page
Happy Pip Comdoll Corners
MeetPips.com

Good luck in your trades this week, buddies!

Happy time

Other Popular Articles:

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