Comdoll Trading Kit (December 3-7, 2012): Midweek Market Analysis

Midweek Market Analysis

Unbeatable Euro Strength
With the way the euro’s been climbing lately, Draghi could announce his retirement to the Caribbean and the euro would still go up. Spanish unemployment close to 5 million? Meh. Mixed PMI numbers? So what? Unless Draghi drops something game-changing in the ECB rate decision tomorrow, optimism over Spain and Greece’s debt solutions could continue to push the common currency higher.

Fiscal Cliff Talks Weigh on USD
For some reason news on the Fiscal Cliff lately remind me of my nephews trying to talk their way out of doing chores. I see pointing fingers and hear a lot of talking but nothing is getting done. As a result, traders are finding it easy to move out of the dollar and into the higher-yielding currencies. Will the U.S. officials end 2012 with a cliffhanger?

Comdolls Trade on Fundamentals
Thanks to the lack of market-moving from the U.S., comdolls are trading on fundamentals and risk sentiment this week. ComdollsAUD/USD is hanging on to a 0.38% intraweek gain despite Australia’s weaker-than-expected retail sales and GDP report as well as an RBA rate cut.

The Loonie is also in consolidation mode against the Greenback with a 0.17% gain as .9900 continues to hold back the Loonie bulls. Will Canada’s employment numbers break USD/CAD’s intraweek range?

Meanwhile, the Kiwi is the strongest among the major comdolls this week with NZD/USD sporting a 0.50% intraweek gain. Then again, New Zealand had the least to show in economic data so far this week. Let’s see if the currency will keep its gains when the RBNZ releases its interest rate decision tomorrow at 5:00 am GMT.

Potential Trade Setups

AUD/USD: Descending Triangle
AUD/USD Descending TriangleAUD/USD has been making lower highs and finding support near the 1.0200 major psychological handle. The pair just hit the top of the descending triangle that’s forming on the daily time frame and appears to be aiming for the bottom as stochastic just crossed down from the overbought zone. See the setup

USD/CAD: Stuck in a Range!
USD/CAD RangeJust as Big Pippin mentioned in today’s Chart Art, USD/CAD has been moving sideways inside a tight 35-pip range as it found support at .9915 and resistance just a bit above .9950. At the same time, stochastic is pointing down from the overbought region, suggesting that a selloff could be in play. See the setup

NZD/USD: Break and Retest?
NZD/USD Inverse Head and ShouldersNZD/USD just broke above the neckline of the inverse head and shoulders on the 4-hour chart, hinting that it could be ready to trade much higher later on. However, the pair just pulled back to the broken resistance level as bulls try to gather more steam. See the setup

Comdoll Event Highlights for December 3-7, 2012

Calendar

One look at the calendar and we can already tell that we’re in for a VERY VERY busy comdoll week! For one thing, the RBA, BOC, and the RBNZ are ALL scheduled to release their monetary policies for December. Not only that, but Australia will also publish its GDP, employment and trade numbers!

Canada isn’t one to be left behind though, as it will also print its building permits, employment figures, and the IVEY PMI report. Last but not the least, New Zealand is set to announce commodity prices on top of the RBNZ rate decision.

Will this be the week that will break the ranging patterns of many currency pairs? We’re not exactly sure which of these reports will cause the most volatility, so better keep close watch on all of these just in case we miss a good trade opportunity!

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)
1.0437
0.9935
0.8212
Previous Week High (PWH)
1.0490
0.9962
0.8268
Previous Week Low (PWL)
1.0402
0.9906
0.8174
Top Weekly ATR (tWATR)
1.0517
0.9990
0.8282
Bottom Weekly ATR (bWATR)
1.0357
0.9881
0.8141
Other significant levels
1.0440, 1.0400
0.9955, 0.9915
0.8250, 0.8175

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

Other Popular Articles:

What is the STA strategy? Q3 2012 in Review Comdoll Trading Kit (November 19-23, 2012) USD/CAD Trade

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