It’s that time of the week, fellow forex fanatics! Let’s take a look at the economic themes that have been dominating markets so far this week.
Market Themes
Big Ben signals possibility of QE3
Ben Bernanke fired up our charts at the start of the week when he hinted that the recent improvement in the jobs sector is still not sustainable and that more stimulus might be necessary. The possibility of QE3 took its toll on the dollar and boosted high-yielding currencies across the board. In fact, this is one of the reasons why my NZD/USD worked out so well! Whoo!
EU officials to increase firewall?
Despite concerns about the region’s rising bond yields, the euro has been resilient against its counterparts thanks to talks of Germany softening its stance on increasing the region’s rescue fund by 200 billion EUR. Will we hear more about this issue in the next couple of days?
U.S. data disappoint expectations
Just when we thought that the U.S. economy is on its way to recovery, disappointing reports like yesterday’s CB consumer confidence, Richmond manufacturing index, and S&P Case-Schiller price index pop up to knock investor confidence back by a few notches. How much disappointment can traders tolerate before we see risk aversion in markets?
Comdoll Review
Enough about the U.S. and the euro, let’s talk about the comdolls!
The high-yielding Aussie, Loonie, and Kiwi enjoyed a nice rally early in the week as the dollar fell on Bernanke’s comments. Unfortunately, a report from China rained on the comdolls’ parade when it showed that company profits fell for the first time since 2009. Yikes!
Right now all of our comdolls are about 20 pips from their respective week open (WO) prices, so it looks like it’s still a fair game over the bulls and bears for the next few days. Which side are you on? Are you projecting a risk-on mode until the end of the week, or will the dollar take back its crown as the king of pips?
That’s it for me today! Please tell me if I missed any major theme, okay? Oh, and while you’re at it, why don’t you share some setups that you’re looking at? Who knows, maybe I’ll have you to thank for if I win my next trade!
Looking forward to hearing from you!
Comdoll Event Highlights for March 26-30, 2012
In terms of economic releases, it looks like the comdolls could be off to a quiet start this week as no top-tier releases are scheduled until Wednesday. Be mindful though that Fed Chairman Ben Bernanke is set to deliver a speech on the recent developments in the U.S. labor market, which could spark some volatility in the charts later today.
The second half of the week could be more exciting for the Aussie, Kiwi, and Loonie as a few medium-tier releases are on tap. If you’re planning to trade the news, the NBNZ business confidence reading and the Canadian monthly GDP release could spur strong moves for NZD/USD and USD/CAD.
Now let’s take a look at the significant inflection points on our comdoll charts:
Significant Levels to Watch Out For
| AUD/USD | USD/CAD | NZD/USD | |
|---|---|---|---|
| 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.
Good luck on your trades this week!
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.
