Comdoll Trading Kit (December 17-21, 2012): Midweek Market Analysis

Aaaand we’re down to our last midweek analysis for the year! If you’re like me and you’re still trading this week, then read up on the top market themes that have been dominating price action lately!

Midweek Market Analysis

Shinzo Abe brings home the bacon! (or sushi?)
Last weekend Shinzo Abe, leader of the Democratic Party of Japan, won his bid as the next Prime Minister. The yen bulls weren’t too excited though, as Abe has always been vocal about his appeals for easier monetary policies and a weaker yen. As a result, the yen got sold there’s no tomorrow and didn’t recover until the next trading sessions.

To fall or not to fall?
I’m not talking about falling in love here! I’m talking about the US Fiscal Cliff that’s been driving traders crazy. Frustrations on the lack of progress weighed on the high-yielding currencies for a while until yesterday when “leaked” reports on the Obama-Boehner meeting circulated the newswires and inspired risk appetite. Will the politicians come up with a realistic solution or will they just kick the debt can farther down the road?

Comdolls trade on domestic concerns
Though the themes above certainly played their part in driving the comdolls’ price action, there wasn’t any lack of market movers in the comdoll lands. Yesterday the RBA revealed its concern for non-mining industries while expressing its belief that the best days of the mining industry are over. Comdolls

Meanwhile, the Loonie received a nice boost when it printed a stronger-than-expected foreign securities purchase report early in the week. The Kiwi got the short end of the stick though, as its current account deficit printed deeper in the red zone.

Right now AUD/USD is dealing with a 0.23% intraweek loss thanks in part to the bearish RBA minutes. NZD/USD isn’t doing better as its current account deficit dragged it to a 0.70% intraweek loss. The Loonie is the only star this week with its 0.12% gain against the dollar. Then again, there’s no telling when sentiment will make another turn this week!

Potential Trade Setups

AUD/USD: Symmetrical Triangle
AUD/USD Symmetrical TriangleWhich way will AUD/USD break out? The pair has been consolidating inside a symmetrical triangle but it looks like Aussie bears could be in control at the moment as stochastic is pointing down. I wouldn’t be so sure though as the bottom of the triangle seems to be holding as support. A straddle setup could work out fine for this one! See the setup

USD/CAD: New Range Forming?
USD/CAD RangeBoy, does USD/CAD sure love to range! The pair is currently moving sideways between the .9830 support and .9880 resistance. Right now, the pair is testing the bottom while stochastic just reached the oversold mark. Does this mean that a rally back to .9880 is in the cards? See the setup

NZD/USD: Mixed Signals!
NZD/USD Mixed SignalsThe Kiwi has been rallying for days on end but I have a good feeling that it might retreat this week. Probably it’s because I’m spotting a bearish divergence on the 4-hour time frame of NZD/USD. I’m not sure though if the pair is also making a bullish pennant, which could mean that the rally would resume pretty soon. See the setup

Comdoll Event Highlights for December 17-21, 2012

Calendar

A quick look at the calendar would reveal that both Australia and New Zealand are busy this week with Australia releasing its leading indices and RBA meeting minutes and as New Zealand prints its GDP, visitor arrivals, and current account data.

Canada isn’t one to be left though, as we’ll also see its wholesale and retail sales and inflation and GDP numbers. And if those still aren’t exciting enough for ya, you can always watch for China’s foreign direct investment numbers and leading index report in the middle of the week.

But hmm, it’s almost the end of the month. Will these potential market movers have as much impact on the comdoll pairs as they usually do now that more and more traders are packing up and closing shop? What do you think?

For now, let’s check out the important chart levels for AUD/USD, USD/CAD, and NZD/USD!

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0554
0.9869
0.8459
Previous Week High (PWH)
1.0586
0.9866
0.8477
Previous Week Low (PWL)
1.0461
0.9856
0.8312
Top Weekly ATR (tWATR)
1.06379920
0.9990
0.8531
Bottom Weekly ATR (bWATR)
1.0472
0.9818
0.8388
Other significant levels
1.0580, 1.0490
0.9930, 0.9875
0.8450, 0.8400

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.

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Have fun and good luck trading this week, friends!

Happy time

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  • Mohammad Reza Abedi

    very good-I sold AUDUSD @ 1.0570-1.0560

    • happypip

      Where is your profit target? Best of luck to ya, mate!

      • Mohammad Reza Abedi

        My first profit target is 1.0380
        and the second is 1.0240- 1.0250 and my first stoploss is 1.0570 and the second is 1.0585.

  • Mohammad Reza Abedi

    Hi HappyPip
    I am buying usdcad . Is this Right?
    link to forums.babypips.com

    • happypip

      I’m seeing USD/CAD hitting potential support also but I think whether it will hold or not largely depends on US Fiscal Cliff negotiations. Good luck on your long trade though and stay on your toes for any changes in sentiment!

  • Mohammad Reza Abedi

    IS GOLD versus AUDUSD?
    link to forums.babypips.com