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What’s been moving the markets these days? And how are the comdolls faring? You’ll find the answers to these questions and more in my midweek market review!

Midweek Market Analysis

Fiscal Cliff Approaching!
Let the countdown begin! No, not for New Year’s Eve, but for the U.S. Fiscal Cliff! As it turns out, Uncle Sam is moving closer to the dreaded cliff unless Obama and Congress don’t act right away. However, this would mean higher taxes and spending cuts for the government, which could shave off nearly 5% of their GDP. Will this continue to be bearish for the Greenback?

New Deadline for Greece
Will the next tranche of Greek bailout funds be released or not? It looks like market watchers will have to stay on their toes until November 20, which is the deadline for the euro zone finance ministers’ decision. Apparently, members of the Troika can’t seem to agree on what to do with Greece’s swelling debt for now, and this indecision could weigh on risk appetite in the coming days.

Comdolls in the green!
ComdollsThanks to positive risk sentiment, the comdolls are enjoying some gains against the U.S. dollar so far. The Aussie has the biggest lead of 0.56% while the Loonie is trailing behind with its teensy 0.01% gain.

The question is, will the comdolls be able to hold on to their wins for the week? Or is there potential for a midweek reversal? Remember that we’ve got a bunch of U.S. data lined up until the end of the week so this could get pretty exciting!

Potential Trade Setups

AUD/USD: Resistance-turned-support at 1.0400?
AUD/USD 1.0400 SupportOne of the reasons why I haven’t closed my AUD/USD trade is that 1.0400 is still holding off the Aussie bulls. Not only that, but the rising trend line that we spotted last week is still valid! Will the 1.0400 handle become a support for the pair or will risk aversion drag the Aussie below the trend line? See the setup

USD/CAD: Bullish pennant vs. Parity
USD/CAD at ParityHmm, I’m having trouble seeing a direction for the Loonie. On the one hand parity is still holding as resistance. On the other hand, the bullish pennant on the 4-hour chart is also looking good for a breakout trade. I’ll probably wait for more news before I pick a direction for this pair. See the setup

NZD/USD: Mid-channel resistance
NZD/USD Mid-channel ResistanceIf you think that the comdolls are headed south, then this setup is for you! Not only is NZD/USD sporting a bearish divergence on the 4-hour chart, but it’s also having trouble breaking above the mid-channel resistance! I might place a stop loss above .8200 if I get more signals for a short trade. See the setup

Comdoll Event Highlights for November 5-9, 2012

Calendar

It’s not hard to see that the comdoll countries are in for big data dumps this week. Australia has already started with its retail sales and trade data, but New Zealand won’t be too far behind with its employment numbers due this week. Canada isn’t also one to get left behind with its IVEY PMI data and trade balance numbers.

But wait, Australia isn’t done yet! It will print its employment numbers later this week after the RBA publishes its interest rate decision. Last but not the least, China will cap the week with its results on industrial production, retail sales, and inflation. Talk about a big week!

Hope you guys are ready for the week ahead! But now that we have taken note of the important comdoll events, it’s time to mark the potential inflection points on your comdoll charts!

Significant Levels to Watch Out For

AUD/USD USD/CAD NZD/USD
Week Open (WO)
1.0340
0.9953
0.8241
Previous Week High (PWH)
1.0419
1.0021
0.8289
Previous Week Low (PWL)
1.0325
0.9921
0.8182
Top Weekly ATR (tWATR)
1.0429
1.0013
0.8314
Bottom Weekly ATR (bWATR)
1.0252
0.9893
0.8168
Other significant levels
1.0400, 1.0330
0.9850, 1.0000
0.8270, 0.8200

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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Have fun and good luck trading this week, friends!

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.