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!
U.S. debt ceiling extension
Earlier this week, dollar pairs were rocked by news that U.S. House Republicans voted to extend the debt ceiling deadline, giving the Congress more time to iron out their plans spending cuts and tax hikes. Either this had a positive impact on risk sentiment as it put the U.S. a bit farther away from bankruptcy or the delay had a negative effect on the U.S. dollar. Could it be both?
Mixed performance from comdolls
While AUD and NZD still seem to be hovering close to their week open prices, CAD was in for a world of hurt after the BOC statement came out less hawkish than usual. Australian reports have been a bit on the downside but it seems that the improvement in China's HSBC PMI is keeping both the Aussie and Kiwi afloat for now.
What's up with Beyon-sync?
Unless you've been living under a rock, I'm sure you've heard rumors about Beyonce lip-synching the National Anthem during Obama's inauguration address. So did she or didn't she? And does it really matter? I still think it was a pretty stellar rendition nonetheless!
Potential Trade Setups
AUD/USD: Mid-Channel Support
Remember the rising channel that we saw a couple of days back? Well it's still intact! AUD/USD just bounced at the mid-channel support, which coincided nicely with the 1.0500 major handle. But will the pair rise all the way to the channel's resistance at the 1.0650 area? Be careful with your stop losses on this one! See the setup
USD/CAD: Bullish Pennant in the Works?
If you're not keen on buying USD/JPY, then you could look at the potential bullish pennant on USD/CAD's 1-hour chart. Stochastic is already oversold and it looks like the week's open price is holding up. A stop below the pennant's support is a good idea if you think that the Loonie is headed south against the Greenback. See the setup
NZD/USD: Time for a Retest?
NZD/USD is about to test a resistance area! The BOJ's recent announcement boosted risk appetite, which could send NZD/USD to the .8425 handle. The area has served as a resistance for the pair so far this month. Still, it might be better to wait for Stochastic to turn and cross before we commit to an idea of a reversal. See the setup
Comdoll Event Highlights for January 21-25, 2013
Boy, oh, boy! It looks like this week's gonna be an eventful one for the comdolls, particularly AUD/USD and USD/CAD as Australia and Canada have some top-tier reports on deck.
First up, we have the Canadian retail sales data on Tuesday followed by Australia's quarterly CPI on Wednesday. Later on, the BOC will make its interest rate decision on Wednesday's U.S. session.
On Thursday, China will release its HSBC flash manufacturing PMI, which could have a significant impact on risk sentiment. Last but not least, Canada will print its CPI figures on Friday.
Planning to trade these releases? Let's take a look at the important inflection points for AUD/USD, USD/CAD, and NZD/USD first!
Significant Levels to Watch Out For
|Week Open (WO)|
|Previous Week High (PWH)|
|Previous Week Low (PWL)|
|Top Weekly ATR (tWATR)|
|Bottom Weekly ATR (bWATR)|
|Other significant levels|
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!
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