Comdoll Trading Kit (September 3-7, 2012): Midweek Market Analysis

Midweek Market Analysis

Summer is officially over!

Goodbye choppy trading conditions and hello cleaner trends! With higher liquidity expected to return in the coming weeks, comdoll pairs could be in for lower volatility and stronger price action. This suggests that we’d see more extended one-directional moves later on, which could mean swing trades are back in vogue.

Greenback moving to the tune of risk sentiment?

Based on the Greenback’s reaction to yesterday’s U.S. ISM manufacturing PMI release, it seems that we are seeing a shift away from fundamentals and a return to risk sentiment when it comes to the Greenback’s movement. With a couple more top-tier reports on the U.S. calendar for the remaining days of the week, we might just see a similar reaction in case the ISM non-manufacturing PMI and NFP figures come in below expectations.

Aussie and Kiwi in the red… so far

Comdolls
Weaker than expected data from China and Australia have been weighing on both the Aussie and the Kiwi this week as they are currently down by 0.59% and 0.72% against the U.S. dollar respectively. The Loonie, on the other hand, is enjoying a tiny 0.16% gain but it remains to be seen if it can stay in the green until the end of the week.

Potential Trade Setups

AUD/USD: Potential support at 1.0250
AUD/USD RetracementWill the Aussie’s luck turn around at 1.0250? The minor psychological handle is not only near the 38.2% Fib on the daily chart, but it’s also a former support area. Ooh, and Stochastic is in the oversold region too! I can’t wait to see more reversal candles on this one! See the setup

USD/CAD: Triangle breakout in the making?
USD/CAD New Range After testing the .9850 handle twice last month, it looks like the Loonie bulls are ready for another round with the pair forming a descending triangle on the 1-hour chart. Will it finally break below .9850 or will the Loonie bears step in and force an upside breakout? See the setup

NZD/USD: Divergence on the daily chart!
NZD/USD Retracement SetupHere’s one for the Kiwi bulls out there! NZD/USD is not only testing a rising trend line on the daily chart, but is also sporting a bullish divergence just as Stochastic is turning in the oversold region. A tight stop would provide a good R:R, but you can always wait for more signals if you want to jump in! See the setup

Comdoll Event Highlights for August 27-31, 2012

Calendar

It looks like we don’t have a lot of reports due from the comdoll economies this week, but don’t get me wrong – the releases on this week’s schedule could have huge effects on AUD/USD, USD/CAD, and NZD/USD!

First off, we had the Australian retail sales and ANZ job advertisements released a few hours back, and the weaker than expected results triggered an Aussie selloff to start the week. Tomorrow, the Aussie has to deal with the RBA statement before bracing itself for the Australian GDP release on Wednesday.

Canada has its fair share of top-tier reports as the BOC will make its policy statement on Wednesday and possibly keep rates on hold at 1.00%. Canadian jobs data, along with its Ivey PMI, are due on Friday. And did I mention that the U.S. will release its NFP report then?

Although New Zealand doesn’t really have any big reports due this week, the Kiwi could take its cue from Australian releases and risk sentiment from U.S. reports.

Significant Levels to Watch Out For


AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0282
0.9882
0.8007
Previous Week High (PWH)
1.0430
0.9933
0.8128
Previous Week Low (PWL)
1.0276
0.9842
0.7970
Top Weekly ATR (tWATR)
1.0380
0.9941
0.8087
Bottom Weekly ATR (bWATR)
1.0184
0.9813
0.7928
Other significant levels
1.0330, 1.0200
0.9850, 0.9800
0.8030, 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.

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Have fun and good luck trading this week, friends!

Happy time

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