Comdoll Trading Kit (March 19-23, 2012): Midweek Market Analysis

Gather ’round, folks! It’s time for our midweek market review! Which themes have been moving our favorite currency pairs so far this week?

Market Themes

Oil prices continue to rise strongly
Early in the week, WTI crude oil traded at $108 per barrel, driving average oil prices just 6.6% below its record high. Although risk aversion has been in play for the first half of the week, the oil price rally has been providing support for the Canadian dollar. However, market participants now seem to be more concerned about the potential impact of rising oil prices on inflation and overall growth.

RBA unfazed by weaknesses in Australian economy
During their most recent policy decision, the RBA kept rates on hold against widespread expectations of a rate cut. The minutes of their meeting revealed that the policymakers weren’t too worried about the negative figures from Australia since they were mostly relieved by the reduction of downside risks from the euro zone and U.S.

Chinese iron ore demand to slow down?
Just yesterday, an expert from one of the biggest mining companies in the world projected that China’s iron ore needs would slow down to a single-digit pace of growth in the near term. Since Australia is one of the leading exporters of commodities to China, this downbeat forecast weighed on the Australian dollar, which has already been suffering from recent negative reports from both Australia and China. How low can the Aussie go?

Comdoll Review

Comdolls

Looking at the performance of the comdolls this week, it looks like the Aussie is the weakest of the bunch as it fell by more than 1% against its counterparts. The Kiwi is in a close second as it slipped by nearly a hundred pips against the Greenback and close to 1% overall. The Loonie also had its fair share of losses at -0.26% but, as I mentioned, the rally in oil prices is providing the Canadian currency some support.

Make sure you check out the calendar below for the upcoming comdoll events, and don’t forget to watch out for those weekly levels too! Good luck and happy trading this week!

Comdoll Event Highlights for March 19-23, 2012

Calendar

Looks like we’re about to see a lot of housing-related reports from the U.S. this week! Remember, the Fed is closely looking at manufacturing, employment, and housing data to determine if they should continue with their monetary easing programs. If the housing reports this week turn out better than expected, then we might see more dollar-buying from the currency bulls.

Still, this doesn’t mean that we shouldn’t look at comdoll reports. New Zealand is set to release its GDP report, while Canada will also be releasing its retail sales and CPI reports. Last but definitely not the least is China’s HSBC manufacturing data due in a couple of days. If China’s manufacturing PMI pops up above the 50.0 expansionary mark, then the comdoll bulls will most likely take over our favorite comdoll pairs!

Now let’s take a look at the significant inflection points on our comdoll charts:

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0595
0.9913
0.8251
Previous Week High (PWH)
1.0598
0.9949
0.8259
Previous Week Low (PWL)
1.0424
0.9881
0.8061
Top Weekly ATR (tWATR)
1.0718
0.9995
0.8353
Bottom Weekly ATR (bWATR)
1.0473
0.9831
0.8149
Other significant levels
1.0650, 1.0550
0.9940, 0.9885
0.8300

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.

Alright, that’s it for me today! If you want to ask or share anything, just tell me, okay?

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Good luck on your trades this week!

Happy time

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