Comdoll Trading Kit (August 6-10, 2012): Midweek Market Analysis

Okay, who showed the fast forward button to Father Time? We’re already in the middle of the week! Let’s take a look at the major themes that have been driving the currencies so far this week.

Midweek Market Analysis

EUR bulls are cautiously optimistic
After the Fed-ECB-NFP combo that we saw last week, it seems that traders are taking a breather from strong price action. High-yielding currencies are so far managing to hold on to their gains, as some investors are still optimistic that the euro zone officials will soon come up with concrete plans to help Spain and Italy with their debt problems. Let’s hope they announce something soon!

Better-than-expected data surprised GBP bulls
Hey the U.K. made it on the list! The pound bulls were as giddy as bees yesterday when the U.K.’s manufacturing and industrial production reports came in a bit stronger than what analysts were expecting. Will we see more optimism for the rest of the week? Remember, the BOE’s inflation predictions are out today!

AUD, CAD, and NZD’s price action not in sync this time
With the RBA releasing its interest rate decision and Canada printing its IVEY PMI and building permits data, it’s no surprise that the comdolls’ price action aren’t in sync this week. The Loonie is the strongest among the three with a 0.24% intraweek gain thanks to strong Canadian data yesterday and rising oil prices.
Comdolls

The Aussie comes in second with only a 0.18% downtick since the RBA didn’t really surprise anyone with its interest rate decision yesterday. The Kiwi is the loser among the comdolls so far this week with a 0.82% loss against the Greenback after New Zealand’s Prime Minister John Key highlighted the negative impacts of a strong currency on the economy.

How do you think will the currencies fare against the Greenback for the rest of the week? I’m still trying to look for a trade setup this week so if you have any suggestions, you know where to reach me!

Potential Trade Setups

AUD/USD: More Upside?
AUD/USD Falling ChannelAUD/USD is treading so close to the top of the rising channel on the 4-hour time frame that it looks like bulls are gathering enough energy for an upside breakout. However, a bearish divergence is in the works, suggesting that a drop might take place if the 1.0600 major psychological level holds. See the setup

USD/CAD: Divergence at 1.0000
USD/CAD DivergenceUSD/CAD’s falling channel on the 4-hour time frame is still intact and there’s a bullish divergence right on the 1.0000 major psychological mark. That’s right in line with the bottom of the channel, which means that Loonie bulls might have a tough time breaking that support level. See the setup

NZD/USD: Kiwi rally about to end?
NZD/USD RallyNZD/USD has been soaring up the charts lately but is an end in sight? After successfully breaking above the .8000 and .8100 levels, NZD/USD is testing the .8200 major psychological resistance. A bearish divergence has formed which means that a drop might be in the cards once stochastic drops below the overbought zone. See the setup

Comdoll Event Highlights for August 6-10, 2012

Calendar

What a busy week for the comdolls! Australia, New Zealand, and Canada will all release their employment numbers this week, with New Zealand opening the salvo on Wednesday. The RBA is also set to steal the show from the other major economies tomorrow as it releases its interest rate decision. Will the central bank go back to cutting rates?

Meanwhile, China will also turn heads as it releases its inflation, industrial production, and trade balance data throughout the week. There won’t be any major data out from the U.S. this week aside from a couple of speeches from Bernanke and the Fed’s budget balance data on Friday. Lastly, make sure you also keep your eyes on Canada as it prints its IVEY PMI, building permits, and trade balance data between Tuesday and Thursday.

We have lots of major comdoll reports this week, so make sure your charts are always ready for possible trade setups!

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0563
1.0017
0.8190
Previous Week High (PWH)
1.0581
1.0085
0.8199
Previous Week Low (PWL)
1.0436
0.9980
0.8087
Top Weekly ATR (tWATR)
1.0673
1.0089
0.8278
Bottom Weekly ATR (bWATR)
1.0454
0.9943
0.8101
Other significant levels
1.0750, 1.0450
1.0075, 0.9900
0.8230, 0.8080

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

Have fun and good luck trading this week, friends!

Happy time

Other Popular Articles:

AUD/USD trade What is the STA strategy? Q2 2012 in Review Comdoll Trading Kit (July 30-August 3, 2012)

2 comments

  1. Tanin Ayabakan

    Dear Happy Pip,
    I do not know whether it is the right place but would there any comments about XAU and XAG comms here? 

    Reply
    • Happy Piphappypip Post author

      Sure! Feel free to share your comments on commodities here as well. After all, they are correlated to the commodity currencies. I’ll try to post my thoughts on gold and silver price action also!

      Reply

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