Comdoll Trading Kit (January 14-18, 2013): Midweek Market Analysis

It’s the middle of the week and you know what that means! It’s time to make sense of the market themes that have been dominating the forex scene so far this week!

Potential Trade Setups

Is the yen weakening too fast?
So far no single economic report has rocked the markets this week. Instead, the yen has the bulls and bears’ attention. The Asian currency plunged deeper against its counterparts on Monday thanks to stimulus expectations. But it reversed some of its losses yesterday when Japan’s Economy Minister Amari warned that the yen’s rapid weakness could cause a strain on imports and consumer spending. Are we seeing the start of a reversal or are we just looking at a retracement?

Comdolls suffer from weak economic data
Comdolls
Too bad China won’t be popping up major reports until later this week! Risk appetite early in the week might have prompted the comdoll traders to overlook Australia’s weak reports, but I guess they got tired of buying yesterday. As a result, AUD/USD’s intraweek gains is cut down to 0.23%, NZD/USD is only up by 0.35%, while USD/CAD is nursing a 0.04% intraweek loss.

Golden Globes: Winners and Losers
Speaking of losses, what do you guys think of the recent Golden Globes night? One look at the winners’ list told me that Les Misérables, Argo, Game Change, and Homeland were big winners. I gotta admit I’m a bit disappointed that The Newsroom and Benedict Cumberbatch didn’t get awards. Ah well, at least Jennifer Lawrence did!

Potential Trade Setups

AUD/USD: Resistance Turned Support
AUD/USD Resistance Turned SupportBased on this 4-hour chart, AUD/USD looks ready to bounce! There’s a former resistance turned support level right around the 1.0525 area while stochastic is crawling close to the oversold territory. Does this mean I should make some adjustments to my current short trade? See the setup

USD/CAD: Bullish Divergence
USD/CAD Bullish DivergencDon’t look now but there’s a bullish divergence forming on USD/CAD’s daily chart! I’m seeing a few indecision candles on the support level too, which means that it could still be a toss up between the bulls and the bears at this point. I’d probably wait for stochastic to cross up before going long. How about you? See the setup

NZD/USD: Rising Channel Forming
NZD/USD Rising ChannelCould this be my chance to jump in the NZD/USD uptrend? It appears that a rising channel is forming on the pair’s 4-hour time frame and it just bounced from the top. I’m thinking the next potential bounce could happen at the channel support, right around the .8350 minor psychological level. See the setup

Comdoll Event Highlights for January 14-18, 2013

Calendar

We started off with some disappointing data from Australia, but it looks like traders are waiting for the U.S. retail sales and NY manufacturing index numbers due in a couple of hours.

Reports from Australia and the U.S. will dominate the week with the Australian inflation and employment numbers scheduled this week while the U.S. will also pop up its Beige Book and housing reports.

China will take center stage at the end of the week though, when it releases a boatload of reports including its GDP, industrial production and retail sales. Make sure you stick around for these numbers as it could set the tone for risk appetite and profit-taking by the end of the week!

Now let’s take a look at the important inflection points for AUD/USD, USD/CAD, and NZD/USD!

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0541
0.9844
0.8379
Previous Week High (PWH)
1.0599
0.9844
0.8461
Previous Week Low (PWL)
1.0467
0.9836
0.8286
Top Weekly ATR (tWATR)
1.0608
0.9890
0.8452
Bottom Weekly ATR (bWATR)
1.0475
0.9799
0.8307
Other significant levels
1.0515, 1.0600
0.9800, 0.9880
0.8450, 0.8375

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.

Chips, dips, and lots and lots of pips!

Happy time

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