Not surprisingly, the euro is the weakest major currency against the dollar this week.
Midweek Market Prep
This week our screens are full of news about the loss of confidence in Cyrprus, which has also renewed speculations of debt contagion in the euro region. Also, unlike last week, the pound didn’t receive any support from economic reports released from the U.K.
The bank scare in the euro region also encouraged a lot of investors to put their money outside of the banks. This is probably why the comdolls, which have higher yields and are supported by an upside surprise in China’s manufacturing PMI, have seen heavy gains so far this week.
Will the comdolls continue to strengthen this week? Only Canada has major reports on tap for the remainder of the week so make sure that you keep an eye out for any news that might affect the comdolls’ price action!
Potential Trade Setups
AUD/USD: Rising Wedge
Is a breakdown in the cards for AUD/USD? The 4-hour time frame shows that a rising wedge is currently forming. The question is, where will it go? Stochastic seems to hint that Aussie bears are in control at the moment as the oscillator is crawling down from the overbought region. See the setup
USD/CAD: Descending Triangle
Check out this descending triangle pattern on USD/CAD’s 4-hour time frame! The pair is close to testing the bottom of the triangle, which is just around this week’s bottom WATR and the 1.0200 major psychological support. Will this level still hold? See the setup
NZD/USD: Retracement Play?
After breaking above the .8300 major psychological handle, NZD/USD appears ready to pull back and retest the broken resistance area. Using the Fibs on the 4-hour time frame shows that the 38.2% level is close to the .8300 mark while the 50% Fib is closer to the former resistance zone. See the setup
Comdoll Event Highlights for March 25-29, 2013
Not much on the calendar for the comdolls this week except for the big BOC interest rate decision coming up on Wednesday. To be honest, I don’t really have a clear bias on what the BOC is going to say because Canadian data for the past month has both missed expectations and surprised to the upside.
As for the other reports, we should keep an eye out for the U.S. consumer confidence data as well as the U.K.’s GDP report also due this week. Remember that consumer activity contributed a lot to the dollar’s strength for the past few weeks while MPC members in the U.K. are watching the GDP report closely for clues on how they will vote in the next asset purchases decision.
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.
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