The USD/CHF pair rose on Friday as traders continue to worry about debt issues in the EU, and run to the Dollar. The pair has made a new high, and as a result should move much higher. The breaking of the 0.93 signals a trend change to the upside longer-term if it sticks, and suggests we will see 0.95 and maybe even parity before too long. We like buying the dips as long as we are worrying about the EU – which could be some time. The Swiss will certainly cheer the market along as this pair rises too – so no worries there. Selling isn’t even a thought at this point.
The USD/CAD had a volatile day on Friday as traders first attempted to sell it off, only to turn around and buy it back. The markets nature suggests that the run to safety will continue, which means this pair should continue to rise. The resulting candle is a doji, which suggests that we could see a pullback, but the 1.03 level should continue to be a floor in this pair – meaning that buying the dips should be the way to go going forward.
The NZD/USD pair rose initially during the Friday session only to fall in the end. The resulting candle was a shooting star for the second day in a row, and suggests that lower prices are on the way. With the failure of the rally to hold, we have only become even more convinced that the pair heads lower. The 0.75 should continue to be massively resistant, and we like selling rallies and a break lower of the Friday lows at this point. Buying the Kiwi isn’t even a thought at this point.
GBP/USD fell again on the Friday session after first attempting to rally above the 1.55 level. The pair is in a free fall at this point, although in the middle of a support zone. The 1.53 level is absolutely crucial to the upward bias to come back to this pair. If not, this pair falls much farther. The world’s economies are looking more and more like they are going to go back into recession, and with this in mind, the pair should continue to fall. The bounces in this pair should be treated with suspicion, and should provide selling opportunities. We won’t buy this pair as it is far too bearish at this point.
EUR/USD fell hard during the Friday session as the onslaught continued. The Euro simply has major issues now, with many starting to question its very existence in a few years. The markets are punishing the EU for failed debt auctions, and the close of the session was very close to the bottom of the daily range. With this in mind, the pair will have to break through the 1.31 level to continue downward, but at this point – that looks very possible. The pair could bounce, but that will only bring out more sellers at this point.
EUR/GBP continued to fall on Friday as traders run from the Euro in general. The Pound is also not very liked at the moment, so the down move in this pair is going to be much slower than you would see in other Euro or Pound related crosses. The 0.85 level looks like it will be visited soon, but to be honest – we would rather sell both of these currencies in other crosses until that level gets broken to the downside.
EUR/CHF initially rose during the Friday session as traders reacted to rumors of an SNB announcement of a higher floor in this pair at 16GMT. The announcement never came, and the pair gave back much of its gains for the session. The candle for the day looks a bit like a shooting star, which is quite remarkable as it is a bearish sign – even with the Swiss National Bank sitting below. It looks like the Euro is in massive trouble at this point, but this will not be the pair to get involved in if it falls hard. We would buy on daily closes above 1.25, but don’t see that coming anytime soon.
The AUD/USD pair attempted a rally on Friday only to fail and print a second shooting star in a row. Both of these are at the bottom of a fall, and this shows that the pair may continue its descent lower as the headlines continue to deteriorate in the EU. The run to the US Dollar will continue to fuel the push lower, and the commodities markets falling will help push it lower as well. We don’t but the riskier currencies at this point, including the Aussie.
Light Sweet Crude
The CL contract found support at the $95 level on a very light trading session for Thursday. The Americans were celebrating Thanksgiving, and as such the volume was very anemic. The $95 remains our support level to follow, and we are willing to be long of this market as long as we can hold above it. The $100 level above should be somewhat resistive, as well as the recent highs just above. We think of this market as a scalping one at the moment, due to the lack of room to move.
Brent was very quiet during the Thanksgiving holiday as traders pushed prices slightly higher. The $105 is our support level at the moment, and as long as we are above it, we prefer to be long of the market as the oil markets have indeed been bullish lately. Headline risks out of Europe could push the market lower as the Dollar gains momentum, and because of that – we consider most trades to be of the short-term variety at the moment.
The natural gas markets fell slightly during thin markets on Thursday. The candle shape is a hammer and shows possible support, although we don’t advise buying this market. The trend is decidedly down at the moment, and the recent string of trading sessions has been a bit overdone in our opinions. The bounce that looks to be coming could see higher prices in the area of $3.75 or even as high as $4, but we think this will simply be a selling opportunity going forward.
The gold markets had a very quiet session on holiday traffic as the support area in the $1,700 range. The support goes all the way down to $1,600 – which shows just how bullish the market really is. Because of this, we don’t sell, and look for buying opportunities. The last couple of sessions have been quiet, and this is exactly what we wanted to see. We are buying on bullish action going forward.
USD/JPY fell during the Thanksgiving session as traders continue to buy the Yen against all other major currencies. The pair has been intervened in a couple of times recently, and we think that it is probably going to happen again, but not in this area. The pair is decidedly bearish, but the move down will be very slow at this point as the easy pips from the intervention are already been collected. Selling on rallies is a viable strategy in this pair, and buying at a much lower price such as 75.50 is possible as well – knowing that the BoJ will step back into the markets if the pair falls too far.
USD/CHF had a very quiet session on Thursday as the Americans were out celebrating Thanksgiving. The pair originally fell during the session, but bounced back and remains sitting stubbornly in the 0.92 area. The pair hasn’t done it yet, but a breaking of the 0.93 level suggests a trend change in this pair for the foreseeable future. The Swiss National Bank is currently fighting Franc appreciation, and as a result this pair can’t be sold. The US dollar is the last remaining safe haven currency, and in a world full of bad headlines – it makes sense that this pair could rise going forward. We like buying dips at this point.
The USD/CAD pair fell on Thursday, but bounced towards the end of the light volume session to form a hammer at the top of the recent upward move. The pair is looking to break out of the recent highs, and if it does – it could go much further. It is looking a bit extended at this point, and because of this – we like buying dips as they come. The pair may or may not give us this opportunity, and if it doesn’t we would buy fresh highs as it looks set to go to 1.10 and maybe even beyond. We aren’t selling at the moment – at least until we close on the daily chart below 1.03 or so.
NZD/USD rose slightly during the Thursday session, but confirmed the bearish stance that it has taken recently. The daily candle is a shooting star at the bottom of the down move, and as a result looks like we are heading much lower. We stated yesterday that the 0.70 is probably going to be seen in this pair, and the Thursday action certainly suggests this as well. We like selling rallies in this pair as long as we are under 0.75, and will continue to do so going forward. A break below the lows of Thursday has us getting a bit more aggressive in our selling.
GBP/USD fell again on Thursday as traders continue to sell off other currencies against the US dollar. The 1.55 level is the start of massive support, and goes all the way down to the 1.53 mark. The next 200 pips will be difficult for the bears, but the direction is decidedly down at the moment, and we only sell cable now. Rallies are for selling, and a break of 1.53 has us aggressively short.
EUR/USD rose during the early part of the Thursday session until the PM of Germany was quoted as saying that the Eurobond idea was dead. The idea of having Germany and the core of the EU backstopping all debt was a dream of the markets, and as a result the Euro then sold off. The daily candle looks like a shooting star at the bottom of the fall, and as a result shows more possible selling to come. A break of the bottom of the Thursday session triggers more selling, and will more than likely have the market testing the 1.31 level again. We are selling rallies and a break of the low form Thursday.
EUR/GBP rose during the Thursday session on a bounce from the 0.86 area. The pair looks very bearish though, and because of the 0.8650 level being so important, we aren’t willing to buy at this point. In fact, we are looking for weakness to sell from. The problems in the EU are simply too far along to consider buying the Euro at the moment. The Pound will suffer as a result of the Euro, and as a result this pair is a contest of two ugly currencies at the moment. The direction is down, but it could be a grind instead of a clean break.
The EUR/CHF pair originally popped during the Thursday session, only to give up all of the gains on comments out of Germany that the Eurobond wasn’t an acceptable solution to the debt crisis. There was hope that perhaps the super bonds could be created, but with Germany not participating – they would be worthless. The markets then continued to sell the Euro as a result. The Swiss National Bank is currently ready to defend the 1.20 level to the downside, so any fall is going to be extremely limited at this point. Because of this, we are waiting to see if the 1.20 area can get tested, where we would be willing to buy. The breaking of 1.25 above would be a long-term buy signal.
AUD/USD rose during the session on Thursday as traders started short-covering. The pair is decidedly bearish, and sold back off later in the session. The pair finished the day forming a shooting star at the bottom of the fall, and shows that further weakness is probably in store. The breaking of the bottom of the session’s range would be another sell signal in this pair. The 0.9350 level below seems to be calling and we think that the pair will oblige the markets. The rallies are to be sold, and we don’t buy the Aussie because of the massive amounts of headline risks out there currently.