Comdoll Trading Kit (May 21-25, 2012): Midweek Market Analysis

Midweek Market Analysis

Risk rebound or just a retracement?
Over the weekend, G8 leaders had a quick pow-wow to discuss the state of the global economy and whether Greece should stay in the euro zone or not. Apparently, the leaders believe that keeping Greece in the region was of utmost importance, but they just couldn’t agree on how to keep the country from defaulting on its debt. Higher-yielding currencies initially found assurance from this news but the rallies soon fizzled since there was no resolution in sight.

Weaker inflationary pressures for comdoll economies
Just recently, the RBA reported that annual inflation is still within their 2-3% target range while the RBNZ announced easing pressures in consumer price levels. And do you know what weaker inflation means? That’s right! More room for potential easing! Now that’s something to take note of in case we see their economies slowing down or when a central bank decision is approaching.

Comdolls and commodities slightly weaker… so far.
Comdolls
It looks like risk-taking is still being kept in check by these downbeat reports, as the comdolls and commodities are generally weaker. Both AUD and NZD are currently down by more than 0.5% against the Greenback, while CAD is putting up a strong fight with a mere 0.03% loss.

Potential Trade Setups

USD/CAD: Riding the uptrend
USD/CAD trendTrend traders are gonna love this setup! On USD/CAD’s 4-hour chart is a nice rising trend line that looks like it’s about to be tested. Making the setup even sweeter is the potential 50% Fib retracement line right near the 1.0100 major psychological level. Who’s going long Greenback? Give a holler! See the setup

AUD/USD: Breakout or fakeout?
AUDUSD breakoutA couple of hours ago AUD/USD strongly broke above the falling trend line that’s been holding since early this month. Interestingly, the pair is sporting an evening star-like patter on the 4-hour chart. Is it time to go long on the Aussie, or are we seeing a fakeout? See the setup

NZD/USD: Simple Fibonacci play
NZD/USD FibonacciIt looks like the Kiwi bulls are having a hard time getting past the 38% Fibonacci retracement level on the 4-hour chart. What’s more, Stochastic is in the overbought territory! It hasn’t crossed though. Will we see a continuation of the comdoll rally, or is this the last of a retracement? See the setup

Comdoll Event Highlights for May 21-25, 2012

Calendar

If you’re looking for opportunities to trade the news, you might be a bit disappointed to find out that there are only a few red flags on the comdolls’ schedules this week. Among these are New Zealand‘s inflation expectations report, Canada‘s retail sales figures, and China‘s HSBC flash manufacturing PMI.

With that, risk sentiment could be one of the major driving forces yet again for the next few days so stay on your toes!

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
0.9837
1.0224
0.7560
Previous Week High (PWH)
1.0046
1.0228
0.7863
Previous Week Low (PWL)
0.9795
0.9988
0.7522
Top Weekly ATR (tWATR)
0.9952
1.0303
0.7660
Bottom Weekly ATR (bWATR)
0.9722
1.0145
0.7460
Other significant levels
0.9900, 1.0000
1.0100, 1.0200
0.7550, 0.7650

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

Good luck in your trades this week, buddies!

Happy time

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