Comdoll Trading Kit (September 17-21, 2012): Midweek Market Analysis

How are the comdolls faring this week and which themes are moving the markets these days?

Midweek Market Analysis

Falling oil prices hurt CAD
Oil prices plunged sharply a couple of times this week, first by roughly $4 per barrel on Monday and by 3.5% on Wednesday. Analysts pinpointed Saudi Arabia as the reason for the sudden price drop below $100 per barrel, as the country reportedly offered to ramp up oil supply in order to offset rising prices.

Weak Chinese manufacturing activity
Another factor that’s weighing on the comdolls, particularly AUD, these days is news of another contraction in China’s manufacturing sector. Based on the latest HSBC manufacturing PMI, the industry shrank for the 11th consecutive month as it came in at 47.8 for September. Although this is a couple of notches higher than August’s 47.6 reading, AUD/USD sold off right after the release.

Post-QE3 rallies too good to last?Comdolls
Currently, AUD is suffering the largest loss among the comdolls as it is down by more than 1% against the Greenback. The Loonie is also in the red as it lost 0.75% to the U.S. dollar this week while the Kiwi is trying to stay resilient with its mere 0.3% loss.

Do you think there’s still a chance that this could change and the comdolls could bounce back before the weekend? Or will the selloff simply carry on? I’d love to hear what you think!

Potential Trade Setups

AUD/USD: Evening star on the daily chart
AUD/USD Evening StarAs if the evening star pattern alone wasn’t enough to give me the adrenaline rush that I get when I see clothes on sale, I also found that the pattern emerged near the 1.0600 handle. That’s not only a psychological level, but is also AUD/USD’s previous high on the daily chart! See the setup

USD/CAD: Bearish divergence in the works
USD/CAD Bearish Divergence If you think that the Loonie bulls are just biding their time, then this setup is for you. USD/CAD is forming a potential bearish divergence on the 4-hour chart and is supported by a Stochastic signal that looks like it’s about to go down. Will the top weekly ATR serve as a strong resistance this week? See the setup

NZD/USD: Doji at the 38.2% Fib
NZD/USD Fib RetracementNZD/USD just formed a long-legged doji on the 4-hour chart while it’s consolidating near the 38.2% Fibonacci retracement. What’s more, Sotchastic also looks like it’s gunning for the oversold region! Keep a close eye on this one, friends! See the setup

Comdoll Event Highlights for September 17-21, 2012

Calendar

It looks like the comdolls needed to take a breather from the fireworks last week as the economic schedules of Australia, Canada, and New Zealand aren’t so jampacked this week.

The red flags that you definitely need to take note of are the RBA’s monetary policy meeting minutes due tomorrow, New Zealand’s Q2 GDP figure set for release on Wednesday, China’s HSBC flash manufacturing PMI due Thursday, and Canada’s CPI figures set for release on Friday.

Don’t forget that Uncle Sam is also set to release a few top-tier reports, mostly in the form of manufacturing PMIs. Note that the U.S. dollar still seems to be reacting to fundamentals these days, which suggests that stronger than expected U.S. data could trigger dollar-buying while weaker than expected figures could result in a selloff.

Now 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)
1.0550
0.9706
0.8280
Previous Week High (PWH)
1.0626
0.9790
0.8354
Previous Week Low (PWL)
1.0323
0.9633
0.8081
Top Weekly ATR (tWATR)
1.0652
0.9771
0.8366
Bottom Weekly ATR (bWATR)
1.0449
0.9641
0.8195
Other significant levels
1.0500, 1.0600
0.9450, 0.9800
0.8250, 0.8350

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

Other Popular Articles:

NZD/USD trade What is the STA strategy? Q2 2012 in Review Comdoll Trading Kit (September 10-14, 2012)

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