Gold Technical Analysis October 18, 2011

Gold markets continue the grind that we have seen recently on Monday. The market looks nervous, but it is consolidating in an upward motion as the lows keep getting higher. The market is also being influenced by the fact that all other markets are being sold on Monday, and you should question whether this is a gold negative move, or if it is simply traders having to sell their gold positions that are profitable in order to pay for other positions that aren’t. Either way, we see no reason to sell gold at this point in time, and would prefer to buy it on a pullback. Until we break below the $1,600 level, we are still willing to buy minor dips as the trend is up, and has been for over 10 years.

EUR/USD Technical Analysis October 17, 2011

The EUR/USD pair continues to run rampant and straight up during Friday’s session, proving that the market is certainly running on emotion at the moment. The hope that a solution will come out over the weekend G20 meeting seems to be part of the hope for this pair. However, this is highly unlikely and could set up the market for disappointment at this time.

The 1.40 level is above, and it should be massive resistance. The 1.3850 level was broken to the upside, and this is very important as well. The truth is that this move has been too much too quick, and it could be a short-covering rally….or at least composed of a lot of covering. The light volumes in the stock markets suggest this could be the case.

Also, we did stop at yet another massive resistance area at the close. With this in mind, it doesn’t look like it would take much over the weekend to spook the markets and get the bears back out in force. With this in mind, we are not willing to buy unless we are over the 1.40 level on a daily close. We are selling any signs of weakness at this point.

USD/JPY Technical Analysis October 17, 2011

The USD/JPY pair had another positive day on Friday, as traders decided to take on massive amounts of risk for the weekend. This was led by the belief that the G20 would produce some kind of solution to the EU debt crisis over the weekend. Added to that, the Bank of Japan is actively working against the appreciation of the Yen, and this pair was ready to rise. The consolidation area bordered by 76 and 77.50 as well is holding, and the market did in fact pull back later in the session. This leads us to believe the scalper’s market should continue in the near term.

GBP/USD Technical Analysis October 17, 2011

The GBP/USD pair rose rapidly during the Friday session as traders took on more risk around the world. The 1.58 level was broken, but the later hours of the session saw this pair pullback. The real question now is whether or not the pair can continue. So far, it looks very bullish. With the G20 meeting over the weekend, traders will focus on anything Europe-related coming out, and as the British are so exposed to the EU debt issues, this will certainly have an effect on this pair.

The pair looks strong technically, but is going to be prone to headline risks at this point in time. The issues in Europe are simply far too troublesome for it to be any other way. Because of this, we are still looking for rallies to sell, but this could be some time away. If we see a gap down at the week’s open – this pair falls hard.

USD/CHF Technical Analysis October 17, 2011

USD/CHF fell again on the Friday session, but continues to hang around the recent support level. In fact, it has been somewhat impressive as it simply doesn’t want to give way. Of course the market is being manipulated by the Swiss National Bank currently, as they do not want a stronger Franc than they already have. Because of this, you can only buy this pair, and with the Dollar being sold off against almost anything lately, it will be hard to buy. With this in mind, we are very flat and neutral this pair.

EUR/CHF Technical Analysis October 17, 2011

The EUR/CHF pair rose slightly on Friday as traders continue to buy the Euro. The hope is that there will be some kind of agreement or consensus over the weekend at the G20 summit, and this has had people buying the Euro in droves. However, this pair is remarkably quiet, and this could be a sign of underlying weakness in the Euro. The pair isn’t producing much in the way of tradable actions or signals, but is a study in Euro strength. To see the common currency rise so much in such a short time against the USD, but sit still against the CHF speaks volumes about the validity of buying the Euro for any length of time.

AUD/USD Technical Analysis October 17, 2011

The AUD/USD pair had a wildly bullish session on Friday as traders bought this pair hand over fist. The “risk on” trade was the order of the day, but one cannot help but think this move has been a bit on the parabolic side. With that in mind, we are approaching serious resistance all the way up to the 1.05 mark. We would also be looking at the possibility of headline risk out of the EU and other places, and be a bit concerned about owning the Aussie. Until we can close on the daily chart above the 1.05 mark, we think buying isn’t an option at this point. In fact, we like selling bearish candles under 1.05 if we can get them.

USD/CAD Technical Analysis October 17, 2011

The USD/CAD continued to fall during the Friday session, and now looks set to retest the parity level. The level is massive support, and far too close for comfort to sell at this level, so unless you are already short – it isn’t advised to be so at this point.

The parity level should offer support, and could produce a long position if we get the correct supportive candle. If we can close below the parity level – this pair continues the long down slide that we have seen over the last several years. The pair is in a downtrend, so this wouldn’t be a massive surprise. However, with headline risks out there, it wouldn’t be a stretch to see this pair raise again either. This pair should continue to be very volatile in the near-term, so tight stops are recommended.

NZD/USD Technical Analysis October 17, 2011

The NZD/USD pair finally managed to crack above the all-important 0.8000 level on Friday, as the traders around the world chose to carry risk into the weekend. The G20 meeting is hoped to produce some kind of solution for the EU, and as such – traders sold the Dollar off against almost anything they could.

The Kiwi is highly sensitive to global risk, and will continue to be pushed around by the situation regarding Europe. In fact, at this point the technical analysis is one part charts, one part whatever news flow comes out. The meeting over the weekend is more likely to disappoint, so we aren’t quite comfortable buying this pair quite yet. After Monday, if we have another positive day, we could be buyers. If we open sharply lower on Monday, perhaps gapping – we would be ready to sell again. After all, the trend has been down until just a few short days ago.

Gold Technical Analysis October 17, 2011

Gold markets continued to run in a very tight pattern on Friday as traders are weighing the possibility of a European debt crisis solution over the weekend. Oddly enough, there are several higher ranking officials that have stated not to expect one, including the Canadian Finance Minister. With this in mind, there are some traders that are buying gold as protection from the next round of bad news or disappointment that the markets have certainly set themselves up for over the last couple of weeks.

The consolidation continues to favor buying dips, as the lows are getting higher and higher. Also, even on this “quiet” day – gold rose $14 and some change. This market certainly wants to rise in value, and as such we are still buying it on dips. Selling isn’t even a thought at this point to us.

Oil Technical Analysis October 17, 2011

Light Sweet Crude

The CL had a strong day on Friday, and managed to break the barrier set up by the last few days. The $90 level is more than likely the next massive barrier, and unfortunately we are just below that – so it is hard to buy at this point. We simply need to break above and close over the $90 to get bullish of this market for any real length of time. The highs are still getting lower, and until we break $90 – that will continue to be true. If it does happen though – this would constitute a resumption of the uptrend we saw earlier this year.

Brent

The Brent markets absolutely skyrocketed during the Friday session as traders continue to expect some kind of magic out of Europe over the weekend. The rally in all risky assets has been impressive, and if you happen to be long already, it could be time to take profits. The $110 level has given way, but the $115 and $120 levels are both above and waiting to push prices back down. At this point in time, it looks like we are going to get some long-term answers soon, but we still feel that selling is the way to go if we get some kind of bearish bar to launch shorts. Until we make a fresh new high, about the $116 level – we aren’t ready to fight the trend.

Natural Gas Technical Analysis October 17, 2011

The natural gas markets rose during the Friday session, and on quite large volume. This was predicated on the weakening US Dollar, rather than anything fundamental that was obvious. The bounce was strong, and certainly would set up for a nice rally to sell from. One cannot help but notice that the $3.75 level seems to be acting rather resistive, and the trend is most certainly down at this point. Because of this, we feel that a sell position could be taken in this area. Quite frankly, one would have to believe that the total economic picture would have to have changed overnight to buy into this move. Also, there is that whole “There is enough natural gas in the Midwest to power the US for 300 years” thing too. We are still selling rallies.

Oil Technical Analysis October 14, 2011

Light Sweet Crude

The CL contract had a negative day for the Thursday session as traders took profits after a large move upwards. The market did bounce a bit towards the end of the session though, and this shows how hard this market could fight a fall. However, the highs are getting lower, and this by definition speaks of a downtrend. Keeping this in mind, we are selling on signs of weakness in this market, and aren’t convinced of the bullishness until we can close above the $90 mark on a daily close.

Brent

Brent actually had a positive day on Thursday. The market looks tired, but the fact the green candle was printed is impressive. The market still looks like one we don’t want to be long of, and will look for weakness to sell. The market is going to be influenced by global economies, and with the Chinese announcing a cut of 12% in oil consumption, this is not a good sign. In the mean time, we wait for a sell signal.

Natural Gas Technical Analysis October 14, 2011

The natural gas market rallied on Thursday, despite the fact that the inventory numbers came out much larger than expected. The market is still very bearish, but the pop could continue to rise from the $3.50 level, which is a large psychological number. The area shouldn’t necessarily be a major support area, but every time you approach a “50 cent” level, it is common to be a reaction. However, the consolidation that broke down previously suggested that we could be heading as low as $3 in the end. As a result, we sell rallies, and do not buy this market at all.

Gold Technical Analysis October 14, 2011

Gold markets had a soft day for the session on Thursday as traders continue to go back and forth in this market. The Dollar was bid on Thursday, and this can sometimes push the value of gold down. The action was fairly light, and did in fact turn back around towards the end of the session, showing that there is still an underlying bid in this commodity.

The action shows us that buying on the pullbacks is still the way to go, and that the demand should still come into play. The market looks constructive, especially if we can get a daily close above $1,680 or so, which is where we see the last of the resistance. With so many risks to the global economy out there, we are hesitant to sell this market as it will more than likely continue to get the “safe haven” bid every time bad news hits the wires.

USD/JPY Technical Analysis October 14, 2011

The USD/JPY pair fell from the higher end of its consolidation on Thursday. The pair looks like it is ready to continue the range bound trading, and this latest moves solidifies that appearance. The pair is being held up by the threat of intervention by the Bank of Japan, as the central bank doesn’t want a Yen that appreciates too quickly. The actions have mainly been of the “jawboning” type at the moment, but as recent as August this central bank had intervened. Because of this we don’t sell for any real length of time, and prefer buying at the bottom of the range, given a choice. Buying at 76.25 has worked out quite well for a while, as long as you are willing to take profit at 77 or so. Knowing this, we are going to continue to scalp this market by doing just that.

USD/CHF Technical Analysis October 14, 2011

The USD/CHF pair rose during most of the session on Thursday, only to fall back down. The result is a shooting star at the bottom of a recent fall. The candle could be a launching point for further weakness in this pair, as the USD finds itself on the back foot. The resulting set up is if the bottom of the candle gets broken – it should see lower prices. But with the Swiss National Bank working against the appreciation of the Franc, it is going to be very difficult to short this pair with any real conviction. Alternately, if the market breaks this candle to the upside – it is a very bullish signal, which we would be happy to get long on.

USD/CAD Technical Analysis October 14, 2011

The USD/CAD pair rose during most of the day on Thursday, only to fall late in the session. The result is a shooting star at the bottom of a recent down move. The candle could be the start of further weakness in this pair, as the USD finds itself on the back foot against most other currencies. The resulting set up is if the bottom of the candle gets broken – it should see lower prices. The oil markets have proven especially resilient lately as well, and this could continue to drive demand for the Canadian dollar. The parity level could continue to be very supportive though, and we would expect a bit of a reaction to it. A breaking of the top of this shooting star-shaped candle would be massively bullish.

NZD/USD Technical Analysis October 14, 2011

The NZD/USD pair fell on Thursday, only to bounce in late hours to form a hammer at the top of an up move. The 0.8000 resistance level sits just above, and it looks like the market will try to break through it again. However, until it does – one has to assume it will hold.

With all of the global risk out there, the Kiwi could be susceptible to selling at times as bad news hits the wires. The area looks like a massive resistance zone, and we are not willing to buy into it until it close above it on a daily chart. Until then, we are on the sidelines, unless of course the market breaks the bottom of this candle – which would make it a “hanging man”, which of course is massively bearish.

GBP/USD Technical Analysis October 14, 2011

The GBP/USD pair fell on Thursday, but bounced later in the session as traders continue to go back and forth in the risk trade. Volumes are extremely light in most stock markets, so one can only assume the currency markets are the same. This would explain the whipsaw action we have been seeing lately.

The pair is setting up to print a hammer on the daily, but if we break the bottom of it – it then becomes a hanging man, which is horribly bearish. Because of this, we need to pay attention to the direction that the market breaks, and follow it. To the upside, we see 1.60 as the next massive barrier, and the 1.55 area as support.