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After marking the important chart levels and identifying trade setups, it’s time to concentrate on fundamental analysis! What economic themes have been dominating markets so far this week? Here’s my list:

Midweek Market Analysis

New Democracy takes back the lead in Greek polls
Last Monday was one of those days when the word “bailout” actually encouraged risk appetite. New Democracy, a pro-bailout political party in Greece, took the lead back from anti-bailout party Syriza in opinion polls last Sunday. Since a win by ND increases the chances of Greece staying in the euro zone, traders were quick to buy high-risk assets.

Pain in Spain
As if the probability of Spain’s fourth largest bank going bankrupt wasn’t enough, credit rating agency Egan-Jones also decided to downgrade Spain’s rating from BB- to B yesterday. And with Spain’s bond yields slowly inching towards the 7% mark where other countries also asked for bailouts, it’s no wonder traders are back to shorting the euro and other high-yielding currencies.

Comdolls enjoying a breather?
Comdoll traders have largely shrugged off economic reports and are trading on risk sentiment instead. Comdolls Improvement in risk appetite boosted AUD/USD to an intraweek high of .9899 early this week, but contagion concerns in the euro zone and weak economic reports are dragging it back to its open price. We can see the same stories with USD/CAD and NZD/USD where both pairs have tested major psychological levels before going back to their respective open price areas.

Potential Trade Setups

NZD/USD: Rising Channel
NZD/USD ChannelHeads up, folks! NZD/USD seems to be in an uptrend these days as a rising channel formed on its 1-hour time frame. The pair just bounced from the bottom of the channel and appears headed for the top, which is around the .7700 major psychological mark. Do think this this uptrend will continue? See the setup

AUD/USD: Downtrend Over?
AUDUSD Inverse Head and ShouldersTake a look at this inverse head and shoulders pattern that seems to be forming on AUD/USD’s 4-hour chart. Could it mean that the pair’s downtrend is over? After all, we did hear some rumors that China could be mulling further rate cuts, which could eventually provide a boost for Australia’s export sector. See the setup

USD/CAD: Potential Retracement Play
USD/CAD RetracementIf you think the trend is your friend, then you might like this potential retracement play with USD/CAD. There’s a rising trend line connecting the lows of the price on the 4-hour chart, so I used my handy-dandy Fibonacci retracement tool to pinpoint potential entry levels. See the setup.

Comdoll Event Highlights for May 28-June 1, 2012

Calendar

NFP weeks have always been promising and this week is no exception! Aside from employment reports from the U.S., we’ll also see a couple of manufacturing reports from China as well as retail sales and building approvals report from Australia. Meanwhile, Canada is scheduled to release its GDP and current account numbers. Anybody plannin’ on trading any of these comdoll events?

Significant Levels to Watch Out For

AUD/USD USD/CAD NZD/USD
Week Open (WO)
0.9788
1.0280
0.7577
Previous Week High (PWH)
0.9936
1.0306
0.7677
Previous Week Low (PWL)
0.9690
1.0152
0.7458
Top Weekly ATR (tWATR)
0.9952
1.0357
0.7677
Bottom Weekly ATR (bWATR)
0.9673
1.0203
0.7478
Other significant levels
0.9940, 0.9700
1.0250, 1.0300
0.7470, 0.7675

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!

@Happy_pip Twitter
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MeetPips.com

Good luck in your trades this week, buddies!

Happy time

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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.