The AUD/USD pair initially tried to rally during the course of the day on Wednesday, but turned back around near the 0.71 level in order to fall significantly and form a bit of a shooting star. Because of this, we feel it’s only a matter of time before we break down, and a move below the 0.70 level should be a selling opportunity. We have no interest in buying this market at the moment, and if it rallies we will simply look for resistive candles above to start selling again. We believe the US dollar will continue to be favored overall, and that of course will have a massive effect on this market.
The USD/CAD pair had a very neutral day on Wednesday as the market didn’t get much in the way of news to push it around. With the oil markets being so quiet, there is little to push the Loonie around. The pair continues to be a scalper’s market until it breaks above the parity level, or below the 0.98 level. Until then, we can only take small positions with small trades.
The NZD/USD pair fell slightly on Wednesday as the pair continues to consolidate just under the 0.83 level. The area is a minor support and resistance area, and until we get some clear indication out of the Federal Reserve on any future QE3 plans on Friday – we may see very little action in this pair. The Kiwi dollar being a commodity currency will be directly affected by the plans of the Fed for the Dollar. Any hint of QE3 sends this pair much higher on Friday, but until that announcement, it might be a quiet market.
EUR/USD rose on Tuesday as traders bought stocks and risk-related assets around the world. The candle that was formed rose all the way to 1.45, but was sold aggressively as the level hold again. The close is just below the downtrend line that we have also drawn on the chart as well. Because of this, even with the massive bullish action during the session, we feel that this pair isn’t’ quite ready to launch just yet. The pair would have to close above the 1.45 level on the daily chart first for us to get in on the long side. A break below the lows on Tuesday would signal selling for us in this pair.
For the last 5 sessions, the GBP/USD has tried to break through the 1.65 level. While it can do that, it simply cannot stay above that level. Tuesday saw a shooting star form from this level, and the technical set up is certainly to the downside. The breaking of the bottom of the Tuesday candle signals selling, and this could lead to the lower levels of the recent consolidation area, which would have us looking for 1.61 roughly. A break to the upside would have to break the Friday highs in order to get us bullish of this pair.
The USD/CHF continued to be the “place were money goes to die” on Tuesday. The market is in a very tight range, and it appears that it is “stuck” at this time. The 0.8000 level is massive resistance, and the Swiss National Bank is willing to step in and keep this market up. This will make for very difficult trading conditions for the foreseeable future. The pair needs a large red or green candle to make us get involved. The trend is down – so we prefer that candle to be red.
The EUR/CHF pair rose on Tuesday, but managed to fall short of breaking above the 1.15 level again. The 1.15 level is a massive resistance area, and it seems that the pair simply cannot break it. If it ever does – this would be a massive buy signal. However, we are looking for sell signals as the trend is without a doubt to the downside overall. With the Swiss National Bank willing to step in to get this pair afloat, we might be waiting for that sell signal for a while. Until then, we sit on our hands and let the market tell us what to do. And at this point – it isn’t telling us to buy or sell.
The AUD/USD shot straight up on Tuesday, and jumped over the 1.05 level. This resistance level keeps getting in the way, and it should be noted that the candle did stop once it broke through. However, the trend overall is up and that makes us bullish overall. The breaking of 1.06 has us buying this pair. If we break 1.03, we are ready to short as well, possibly going down to the 1.01 level.
The USD/CAD pair fell during the Tuesday session, but only slightly. This might be because of the uncertainty involving the Jackson Hole meeting of central bankers this week. On Friday, Ben Bernanke, the Federal Reserve Chairman, will give a speech. This speech is becoming more and more important as traders convince themselves that the Fed is going to step in and bail them out again. If there is no quantitative easing to be found, the USD should gain as the market has been selling it on the whole, and with these two currencies being so interconnected, there is a real chance to see this pair shoot straight up if he doesn’t offer QE3. However, the parity level needs to be broken above, or the 0.98 needs to be broken below in order to finally get a signal as to the direction of this pair.
The NZD/USD pair rose on the Tuesday session, and ended at the top of the candle. The candle did stop at the 0.8350 resistance level, which has been tough lately. The pair could react by falling a bit, but it should also me mentioned that the level isn’t a major one. More than likely, the pair continues to rise, and any fall from this level should have the prudent trader watching for bullish and supportive candles – especially around the 0.8000 to 0.8100 levels. The market isn’t sellable until we close below the 0.8000 area. With the especially strong candle on Tuesday, it looks as if this pair is finally ready to move – to the upside.
The EUR/USD pair rose on Monday, but pulled back to form a shooting star. This is an especially bearish signal as it not only shows a lack of follow through, but the top of a downward channel as well. This shows that the pair is very weak, and a break below the 1.4350 level looks like a trigger to fall again, perhaps down to 1.41 or so as it is the bottom of the most recent consolidation area. We will not go long until we break above the 1.4525 level or so. With all of the European debt issues, it is very difficult to own the Euro in this environment.
USD/JPY had a wild run on Monday, as it was both bullish and bearish at times, eventually forming a long-legged doji at the end of the session. The market wants to short this pair, but the Bank of Japan is making it obvious that the falling of this pair will no longer be tolerated. The 77 level seems to be a bit of a battleground at this point and as such makes a natural magnet for the currency pair. The pair is impossible to short safely, but a move above the highs on Monday’s session could be a good buying signal for the next 2-300 pips.
The GBP/USD pair attempted to break above the 1.65 level again on Monday, but was pushed back as traders sold the Pound at this massive resistance level. The stock markets found themselves selling off later in the day, and this in turn became a reason to sell risk-related things such as the Pound. The 1.65 level represents the top of the recent trading range, and it seems that it will remain in place for the short-term. A break below the lows on Monday would be a sell signal for a few hundred pips, as we should run to about 1.61 or so if we do break that level.
With the Swiss National Bank artificially lifting this pair, the Monday session saw very little action in the USD/CHF pair. The Swiss Franc has been abandoned by the average trader, and is starting to sit still because of it. The central bank has all but killed trading in this market, and most traders will find it of no interest. However, it is important to pay attention to this kind of market because when it moves – it will move quickly and with certainty. The breaking of 0.8000 to the upside has us racing towards the 0.83000 level, and a break of the recent lows over the last few weeks will have us trading down towards 0.7500 or so. The trend is down, so we prefer a short set up.
The EUR/CHF is essentially a dead market at this point. The Monday action was virtually non-existent, and will more than likely remain so as the Swiss National Bank has been active in trying to push this currency pair up. The pair seems to want to fall, but with the central bank meddling in this market it will be tough for it to do so. The 1.15 level certainly is resistance, but if we can break above it – we will run to 1.18 or so. If we can get a larger red candle, we go to 1.10 and eventually parity. Until we get one of these signals, we are sitting tight.
The AUD/USD pair had a bullish day, but fell late in the session to form a shooting star just below the 1.05 level – a major area of resistance. Because of this, it appears this pair will fall from here, but it must be known that the 1.05 to 1.01 area seems to be the recent consolidation range, and we feel that it will remain so. The “risk off” trade seems to be coming into vogue at the moment, so it appears that selling a break below the Monday low should be a decent short signal for the short-term.
The NZD/USD pair rose on Monday, and seems to have found a bit of support at the 0.82 level. The pair is decidedly bullish, but the latest action is somewhat contradictory. The 0.8000 level below here is major support, and if it gets broken – we will go much lower. A break to the upside of 0.85 would be massively bullish. Until then, we are likely to meander around these levels.