Comdoll Trading Kit (November 5-9, 2012): Midweek Market Analysis

Can you believe we’re in the middle of the week already? Let’s look at the market themes dominating price action so far this week and see if they can help us find good trade ideas! Here’s my list:

Midweek Market Analysis

Barack-to-Barack for Obama!
Price action was muted early this week as traders waited for America to decide on who gets to lead the country for the next four years. The high-yielding currencies shot up against the Greenback early today though, when speculations of an Obama win started going around. Will the dollar weakness continue until the end of the week?

Spain still playing the bailout game
Spain has been playing its own waiting game. Spanish officials continue to straddle the bailout fence by simultaneously denying the need for one and announcing its openness to the idea of a bailout. Not surprisingly, traders are showing their impatience by boosting the Spanish bond yields higher. Now that the spotlight is out of the U.S., will frustrations in Spain dictate price action this week?

RBA keeps rates steady at 3.25%
ComdollsThe RBA spread good vibes yesterday when it surprisingly kept its interest rates steady at 3.25%. Apparently, Australia’s climbing inflation rate as well as improved optimism over China’s economic prospects kept the central bank from pulling the rate cut trigger for another month.

With the RBA keeping its rates steady, it’s no surprise that the Aussie is 1.19% ahead of the Greenback so far this week. That’s higher than USD/CAD’s 0.63% intraweek losses, and NZD/USD’s 0.55% gains for the week. The question is, will the comdoll bulls keep up the optimism for the rest of the week? Remember that the comdoll event chart still has a couple of potential game changers on deck!

Potential Trade Setups

AUD/USD: Rising Wedge Breakout!
AUD/USD Rising Wedge BreakoutAre we seeing a potential continuation of AUD/USD’s rally here? The pair just broke above the top of the rising wedge on the 4-hour chart right after the RBA announced that they’d keep rates on hold for now. At the same time, stochastic is pointing upwards, suggesting that the Aussie has more room to climb. See the setup

USD/CAD: Rising Channel Holding
USD/CAD Rising ChannelNow here’s a potential retracement play on USD/CAD. As you can see from the chart, the pair is still moving inside a rising channel on its 4-hour time frame but it appears to be pulling back after finding resistance at the top. The pair could retrace until the 38.2% to 50% Fibs, which are in line with the bottom of the channel. See the setup

NZD/USD: Approaching .8350 Resistance
NZD/USD .8350 ResistanceAfter several unsuccessful attempts at breaking beyond the .8350 minor psychological level, the pair seems ready to test the resistance once more. It still has a long way to go though, so you might have to wait until the middle of the week if you’re planning to short around .8350. See the setup

Comdoll Event Highlights for November 5-9, 2012

Calendar

It’s not hard to see that the comdoll countries are in for big data dumps this week. Australia has already started with its retail sales and trade data, but New Zealand won’t be too far behind with its employment numbers due this week. Canada isn’t also one to get left behind with its IVEY PMI data and trade balance numbers.

But wait, Australia isn’t done yet! It will print its employment numbers later this week after the RBA publishes its interest rate decision. Last but not the least, China will cap the week with its results on industrial production, retail sales, and inflation. Talk about a big week!

Hope you guys are ready for the week ahead! But now that we have taken note of the important comdoll events, it’s time to mark the potential inflection points on your comdoll charts!

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0340
0.9953
0.8241
Previous Week High (PWH)
1.0419
1.0021
0.8289
Previous Week Low (PWL)
1.0325
0.9921
0.8182
Top Weekly ATR (tWATR)
1.0429
1.0013
0.8314
Bottom Weekly ATR (bWATR)
1.0252
0.9893
0.8168
Other significant levels
1.0400, 1.0330
0.9850, 1.0000
0.8270, 0.8200

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.

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Have fun and good luck trading this week, friends!

Happy time

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  • RB

    Great call on the USD/CAD happypip! Caught 50 of the 100 pip move today :)

    • happypip

      Thanks and congratulations! Where you able to enter and exit? It really was a good setup.

      • RB

        I entered half at the Friday low (.9930) and the other half triggered at .9900. Luckily the .9880 support held, my SL was set just below the .9850 (bottom of bull channel).

        I’m debating whether or not to enter another long here at .9965. We’ve had some tight consolidation overnight and we still have room to move up in this channel (profit target would be 1.0065 if we break past the 1.0020 high).

        Thanks again for the set up!

  • Hazwanz Wanz

    hye..

    • happypip

      Hi! Thanks for reading my blog! :)