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It’s that time of the week, folks! Let’s take a look at the market themes that have been dominating price action this week:

Midweek Market Analysis

Disappointing NFP = QE3?
With no major data released from the U.S., traders have been obsessing on the disappointing NFP data out last Friday. Is it bad enough to push the Fed into launching QE3? The possibility that it might be sent the Greenback lower against the high-yielding currencies at the start of the week.

German court throws a roadblock on ESM plans
Though the EU finance ministers granted Spain more money and time to save its economy yesterday, traders continued to sell the euro. Apparently, they weren’t happy with the way the German court could delay the passing of the ESM, a tool that’s supposed to enable troubled EZ countries to borrow money easily. Some even say that the stall could last up to a couple of weeks! Unfortunately, time is one of the things that the region can’t afford right now.

China keeps the comdolls afloatComdolls
Chinese reports have been both boon and bane for commodity-producing countries this week. And why not? Softer-than-expected inflation boosted comdolls as it raised expectations of more stimulus from the PBoC, while China’s slowdown in imports seen yesterday suggested that the second-largest economy is scaling back on its overseas purchases. Talk about tossups!

The Aussie is hanging in there with only a 0.05% slip against the dollar, while the Loonie and Kiwi are dealing with 0.21% and 0.20% declines respectively.

Over the next couple of days, we’ll see the BOJ monetary policy, as well as Australia’s employment numbers and even China’s GDP numbers. There’s still a lot of room for volatility, so we better mark our charts carefully!

Hit me up on the boxes below if you have questions or something to share!

Potential Trade Setups

AUD/USD: Downtrend to Resume?
AUD/USD RetracementHas AUD/USD finally found resistance at the 1.0300 major psychological handle? By the looks of that bearish divergence and overbought signal on the daily chart, it sure seems so! On top of that, the 50% Fib coincides with a former support level, which could be holding as strong resistance now. See the setup

USD/CAD: Falling Channel Holding
USD/CAD Falling ChannelThanks to weaker than expected U.S. jobs data, risk aversion pushed USD/CAD up from the bottom of the channel last week. Of course, it also helped that the channel support lined up with 1.0100 and was close to last week’s bottom WATR. It looks like the pair is stalling right in the middle while a bearish divergence already formed. See the setup

NZD/USD: Rising Channel Forming?
NZD/USD Rising ChannelThis could be a make-or-break for the Kiwi! The pair just hit support at the bottom of the rising channel on the 4-hour chart while a bullish divergence seems to be hinting that Kiwi bulls could charge soon. But do fundamentals line up for a Kiwi bounce? Let me know what you think! See the setup

Comdoll Event Highlights for July 9-13, 2012

Time to mark the important comdoll events and chart levels on AUD/USD, USD/CAD, and NZD/USD!


Looks like Australia, Canada, New Zealand, and even the U.S. are taking a back seat against China this week as the world’s second-largest economy releases its inflation, trade, and growth data. However, keep an eye out for Canada’s trade balance report on Wednesday and Australia’s employment figures on Thursday.

No major data is scheduled for release in the US, except perhaps the University of Michigan consumer index on Friday or Ben Bernanke‘s speech sometime this week. But enough about fundamentals. Let’s take a look at the important comdoll chart levels!

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
1.0300, 1.0130
1.0250, 1.0120
0.8050, 0.7850

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!

Good luck in your trades this week, buddies!

Happy time

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.