Comdoll Trading Kit (July 16-20, 2012): Midweek Market Analysis

It’s that time of the week, folks! Let’s take a look at the market themes that have been dominating price action this week:

Midweek Market Analysis

Weak U.S. data and QE3 speculations haunt USD
Worse than expected U.S. retail sales data made the Greenback start the week on a sour note, much to the advantage of the higher-yielding comdolls. U.S. consumer spending saw its third consecutive monthly decline, which brought QE3 talks back on the table prior to Big Ben’s speech yesterday. Although the Fed head didn’t make any specific remarks on further easing, he did mention that he was very worried about the state of the U.S. economy.

Less pessimism from RBA and BOC
Judging from the minutes of the latest RBA meeting and the BOC’s recent rate statement, it looks like these two central banks are no longer so concerned about downside risks to their economies. RBA officials noted that economic activity in the Land Down Under is already picking up while BOC policymakers thought that some “modest withdrawal” of their stimulus might be appropriate.

Comdolls barely affected by euro zone problemsComdolls
Although euro zone debt troubles are still very much present, they seem to have taken the backseat when it comes to driving the commodity currencies. Both AUD and CAD are currently enjoying modest gains against the Greenback while the Kiwi is dealing with a teensy 0.04% loss.

Hit me up on the boxes below if you have questions or something to share!

Potential Trade Setups

AUD/USD: Rising Channel Still Intact!
AUD/USD Rising ChannelAfter breaking above its mid-channel resistance on the 4-hour chart, AUD/USD looks set to test a potential resistance near the 1.0400 handle. Will the pair reach the major psychological handle, or will the overbought Stochastic signal be too much of a temptation for the bears? See the setup

USD/CAD: Will Major Support Hold?
USD/CAD Major Support

The Loonie is testing the 1.0130 handle, an area that had served as a pretty solid support last week. Will the level hold once again, or will QE speculations drag the pair to new intraweek lows? Good luck in trading this one! See the setup

NZD/USD: Testing Trend Line in 3..2..1
NZD/USD Trend LineHere’s one for the comdoll bulls! NZD/USD is chilling on a rising trend line on the 1-hour chart and it looks like it’s about to retest the support. Stochastic is on the overbought territory for now, but do you think there’s more room for the Kiwi to rise? I have a good feeling about this one! See the setup

Comdoll Event Highlights for July 16-20, 2012

Time to mark the important comdoll events and chart levels on AUD/USD, USD/CAD, and NZD/USD!

Calendar

Judging from the lesser-than-usual amount of top-tier reports from Australia, Canada, and New Zealand, it looks like this week could be a quiet one for the comdolls. The BOC rate decision and the CPI releases are the only red flags on tap, but don’t forget that the U.S. has a bunch of hard-hitting reports due this week as well.

Bear in mind that market participants are extra sensitive to U.S. data these days as the slightest bit of negative figures spark QE3 speculations, which could be negative for the Greenback.

Now let’s take a look at the inflection points that we should watch out for:

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0245
1.0136
0.7970
Previous Week High (PWH)
1.0282
1.0250
0.7999
Previous Week Low (PWL)
1.0100
1.0150
0.7862
Top Weekly ATR (tWATR)
1.0358
1.0252
0.8062
Bottom Weekly ATR (bWATR)
1.0135
1.0060
0.7880
Other significant levels
1.0250, 1.0150
1.0250, 1.0100
0.8000, 0.7850

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
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Good luck in your trades this week, buddies!

Happy time

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