Midweek Market Prep
The chart below is all we need to tell us what happened for the past few days. After sporting huge weekend gaps, the yen crosses fell heavily on the assumption that Abe would nominate a BOJ Governor candidate that is as aggressive as he is. The pound also saw some support despite the Moody’s downgrade and a steady GDP reading in the U.K.
We all know what happened to the comdolls! Thanks to a weak Chinese PMI and falling commodity prices, the Aussie, Kiwi, and Loonie all weakened versus the Greenback. The euro is also deep in the bear lair this week as a successful Italian bond auctions fails to recover the common currency’s sharp losses on Monday.
For the rest of the week I’m only seeing the U.S. and Canada’s GDP reports on tap, as well as manufacturing PMI numbers from the U.K. and China. I’m not feelin’ optimistic on these reports, but who knows? Maybe risk sentiment will continue to drive price action. What do you think?
Potential Trade Setups
AUD/USD: Ready to Bounce?
Is a bounce in the cards for AUD/USD? Looking at the daily chart, it looks like the pair is approaching a significant support zone near the 1.0200 major psychological level. Stochastic has made its way out of the oversold region, suggesting that Aussie bulls might have the upper hand soon. If the pair is able to bounce and sustain its rally, it could even go as high as the 1.0600 handle! See the setup
USD/CAD: Bearish Divergence
When will the Loonie’s selloff end? The pair has been making new highs for the past few trading days! The stochastic on the 4-hour time frame is deep in the overbought region, suggesting that USD/CAD could have trouble sustaining its climb. In addition, a bearish divergence has formed with stochastic making lower highs and the price making higher highs. See the setup
NZD/USD: Will .8300 Hold?
The .8300 major psychological handle has held for the Kiwi for this year and it might do so again. NZD/USD is currently approaching that support zone while stochastic is slowly crawling out of the oversold area. If you’re planning to buy this pair, make sure you set your stops below those previous lows. See the setup
Comdoll Event Highlights for February 25-March 1, 2013
One look at the calendar tells us that there won’t be many major comdoll reports this week. The U.S. is set to dominate the newswires with its consumer confidence and its annualized GDP reports, followed by China’s PMI numbers.
The only comdoll data we’ll see is Canada’s GDP report on Friday at around 1:30 pm GMT. The comdolls might take more clues from the Chinese PMI numbers though, so we better keep our eyes glued to our charts!
Significant Levels to Watch Out For
|Week Open (WO)|
|Previous Week High (PWH)|
|Previous Week Low (PWL)|
|Top Weekly ATR (tWATR)|
|Bottom Weekly ATR (bWATR)|
|Other significant levels|
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.
Chips, dips, and lots and lots of pips!
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