Comdoll Trading Kit (July 30-August 3, 2012) – Midweek Market Analysis

Midweek Market Analysis

FOMC and NFP speculations weigh on U.S. dollar?
This first half of the week has been pretty quiet in terms of economic data and price action as the top-tier events are scheduled during the latter half. It seems that market participants are counting on downbeat comments from the FOMC and possibly another weak U.S. jobs figure, which explains why we are seeing limited moves lately.

BOC’s hawkishness being questioned
Although the Canadian dollar is still enjoying its ongoing rally, traders are starting to doubt whether the upbeat BOC rate expectations are warranted or not. The Canadian economy has seen its share of weak data as its monthly GDP came in at 0.1%, below the consensus of 0.2% growth and less than May’s 0.3% expansion.

ComdollsRisk appetite keeps comdolls afloat
At the moment, all three commodity currencies are holding on to decent gains against the U.S. dollar as traders’ appetite for risk hasn’t waned yet. But with plenty of big reports coming up, do you think a reversal could be in the cards?

I’m still trying to look for a trade setup this week so if you have any suggestions, you know where to reach me!

Potential Trade Setups

AUD/USD: Gearing up for 1.0750?
AUD/USD Falling ChannelWondering why AUD/USD is easily breaking above the rising channel on the 4-hour chart? Maybe it’s because some traders are looking at the higher time frames! If we use the weekly chart, then the next possible resistance will be the 1.0750 handle near the top of the falling channel. That’s 200 pips away, folks! See the setup

USD/CAD: Parity play
USD/CAD Parity Play
If you’re planning on shorting the comdolls, then trading USD/CAD’s parity level might be your best bet right now. The major psychological handle is not only a former resistance level on the daily chart, but it’s also the bottom of the falling channel that we’re all watching! See the setup

NZD/USD: Bullish pennant in the works?
NZD/USD Support Turned ResistanceLike the Aussie, there’s no hard resistance level near NZD/USD’s current price. Heck, the pair is even sporting a possible bullish pennant in the 4-hour chart! Will the pair break above the pennant, or test its former support levels near the .8050 area? See the setup

Comdoll Event Highlights for July 30-August 3, 2012

Calendar

It looks like this week will be off to a slow start as only a few medium-tier comdoll reports, namely Australian building approvals and Canadian monthly GDP, are on tap. However, I’m expecting things to heat up towards the middle of the week as China will release a couple of manufacturing PMIs while the U.S. FOMC is set to make its monetary policy statement.

The latter half of the week might prove to be very exciting for AUD/USD as the Land Down Under will release its retail sales data and trade balance. Of course, we just might see some fireworks across all dollar pairs as traders brace themselves for another NFP release on Friday.

Planning to trade any of the comdoll pairs during these releases? Don’t forget to mark these potential inflection points on your charts:

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0475
1.0044
0.8102
Previous Week High (PWH)
1.0487
1.0232
0.8106
Previous Week Low (PWL)
1.0177
1.0034
0.7808
Top Weekly ATR (tWATR)
1.0590
1.0119
0.8195
Bottom Weekly ATR (bWATR)
1.0361
0.9969
0.8014
Other significant levels
1.0250, 1.0500
1.0150, 1.0050
0.8000, 0.8050

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
Playing with Comdolls Facebook page
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MeetPips.com

Have fun and good luck trading this week, friends!

Happy time

Other Popular Articles:

AUD/USD trade What is the STA strategy? Q2 2012 in Review Comdoll Trading Kit (July 23-27, 2012)

  • Arcturis

    Question, are you speculating that aud/usd is going to increase to 1.0750 and usd/cad is going to bounce of parity?

    Wouldn’t that be a very extreme case considering the strong negative correlation between aud/usd and usd/cad? 

    I am saying this beacuse I just had two big trades this past week going short on the usd/cad and going long on the aud/usd. My stops are set to allow for as much retracement as possible and both got hit these past few days, so I predict both pairs to reverse.

    I agree with USD/CAD bouncing off parity but I am predicting AUD/USD to reverse, what do you think about that?