Comdoll Trading Kit (June 18-22, 2012): Midweek Market Analysis

Midweek Market Analysis

Euphoria over Greek elections and G20 summit
The markets seem to be overjoyed about the Greek election results as higher-yielders gapped higher over the weekend and the rallies resumed soon after those gaps were filled. With a new coalition government now in the works and with renewed support from G20 leaders, it seems that Greece is seeing the light at the end of its very dark debt tunnel as they move closer to securing another set of bailout funds.

QE3: Still a possibility?
Thanks to worse than expected U.S. economic data, market participants have revived talks of QE3 from the Fed. Could this be a “buy the rumor, sell the news” phenomenon though? Forex Gump did point out that Bernanke seems to be less inclined towards further easing and that the recently released Beige Book revealed that the situation isn’t as bad as it seems.

Comdolls taking advantage of USD weakness
Comdolls
As I pointed out in my AUD/USD trade idea last week, traders are pricing in expectations of further easing from the U.S. central bank, and this explains why the Greenback has been losing its shine lately. Stay on your toes during the FOMC statement today because that could be a game changer!

For now, it looks like the Aussie is leading the pack when it comes to outpacing the U.S. dollar as it is currently up by 0.83%. Not so far behind is the Kiwi, which is enjoying a 0.53% gain, followed by the Loonie with a 0.22% lead against the Greenback.

Potential Trade Setups

AUD/USD: Bearish Wedge Breakout
AUD/USD Bearish WedgeIs that a bearish wedge I see on the 1-hour chart? It looks like it! After breaking above 1.0100 yesterday, it looks like the bulls are having trouble making new highs. A bearish divergence and an overbought Stochastic signal sure isn’t helping the bulls either. Will the resistance make way for a break below the wedge? See the setup

USD/CAD: Head and… Descending Triangle?
USDCAD Head and ShouldersI know a lot of you are watching a possible head and shoulder break on USD/CAD, but if we look at the 4-hour chart closely, we’ll see that a descending triangle is also forming right where the second shoulder should be. With two patterns signaling a downside move, do you think a bearish trade for the pair is a good idea? See the setup

NZD/USD: Rectangle Play
NZD/USD Rectangle PlayAre the Kiwi bulls taking a breather? On NZD/USD’s 4-hour chart is a rectangle, which, according to the School of Pipsology, is a possible sign for a continuation of a trend. The question is, are the Kiwi bulls done pushing the pair higher, or are they just taking a breather? See the setup.

Comdoll Event Highlights for June 18 to 22, 2012

Calendar

The comdolls have quite a lot on their plate this week as Australia, New Zealand, and Canada are set to release a few top-tier reports. Australia has the RBA minutes due tomorrow, New Zealand has its quarterly GDP figure set for release on Wednesday, and Canada has its CPI and retail sales data scheduled towards the end of the week.

On top of that, let’s not forget that the FOMC policy statement is scheduled midweek and could provide us with opportunities to catch strong moves! Make sure you mark these levels on your charts if you plan to trade the comdolls this week:

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0116
1.0209
0.7915
Previous Week High (PWH)
1.0091
1.0326
0.7902
Previous Week Low (PWL)
0.9851
1.0201
0.7670
Top Weekly ATR (tWATR)
1.0237
1.0291
0.8013
Bottom Weekly ATR (bWATR)
0.9996
1.0127
0.7813
Other significant levels
1.0000, 1.0200
1.0200, 1.0300
0.7800, 0.8000

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
Happy Pip Comdoll Corners
MeetPips.com

Good luck in your trades this week, buddies!

Happy time

Other Popular Articles:

AUD/USD trade What is the STA strategy? Comdoll Trading Kit (June 11-15, 2012) Q1 2012 in Review

  • Igor

    Hello, i’m reading your outlook.
    I’m an investor of comdolls.
    well, i’m investing at NZD/USD but now i noticed that the price is fluctuating. So.. i have sold the pair per .7815 (last week) and now the price reached the resistance level ( .7915). Do you think that we will see the price to match .7670 ? I have my concerns because the last couples of days the price grow a lot. Why do you think that this had happened? 
    Regards,Igor.

    Are you using Technical method?

    • happypip

      Hey Igor! Thanks for checking out my blog. As for NZD/USD, I think the recent speculations on QE3 are driving demand for USD down, which is pushing that pair up. It looks like NZD/USD is ridiculously overbought across most time frames though, so we could be in for a huge retracement or even a drop back down to your target unless the Fed actually announces more easing during their statement this week. Let’s see how it goes!

      Yep, I use technicals for my trade setups as well. Always nice to combine it with fundamental analysis though :)

  • Sunder

    Thank’s for your information. It’s really nice and informative.

    • happypip

      Thanks for checking out my blog and for the kind feedback!