The USD/CHF pair rose on Friday, and continues to hover above the 200-day moving average. Most traders recognize a breaking of the 200-day moving average as a trend change, and we certainly noticed the breaking of the weekly trend line a few sessions ago. Now we simply are waiting to get that pullback that allows the rest of us to get in. The pair has moved over 1,000 pips in the past couple of days, so that pullback is highly likely. If we get it – we would love to buy between 0.83 and 0.85.
The EUR/CHF pair fell on Friday, but still remains above the Swiss National Bank’s official line in the sand at 1.20. The 200-day moving average did repel this pair, so unlike the USD/CHF – this pair is still technically in an adown trend according to some schools of technical analysis. The pair looks like it wants to fall, but the biggest thing you can learn from this chart is just how weak the Euro really is, as it is one of the few currencies to lose value against the Franc. We want to buy, but until Europe can get through the debt crisis – this pair is better left alone.
The AUD/USD fell on Friday, as did all risk-related currencies. However, the AUD is a bit insulated as there is massive demand for gold at the moment, and Australia has plenty of it. The area just below the close is full of choppiness and supportive action, so it is likely that any falls we see from here will be of the slow grinding kind, if we see them at all. As a rule, if the stock markets rise globally, this pair will as well. Keep one eye on the NASDAQ, NYSE, FTSE and DAX in order to know whether or not to buy this pair. With the recent gloom and doom in the air, this pair will difficult to own for any long periods of time.
USD/CAD rose on Friday as traders sold off the risk currencies around the world. The oil markets dipped as well, and this always spells trouble for the Loonie. The pair remains below the parity level however, (a major resistance area) and as a result – we aren’t ready to buy just yet. In fact, our signals have been coming from the CL and COIL contracts lately. If the CL (Light Sweet Crude) can break above the $90 mark, this pair falls hard. If it cannot, and breaks below the $80 mark – this pair becomes a buy, and will more than likely rally somewhat significantly.
NZD/USD fell hard on Friday, just as we suggested it would. The breaking of the bottom of Thursdays candle was the signal, and we fell fairly hard as a result. The 0.81 – 0.80 support zone is just below, and it appears that we are going to test it. However, we do expect a lot of support in that area. As a result, we aren’t suggesting selling this pair to our readers at this point. In fact, we would like to own this pair, but only if we see support hold. If not – we will wait to see a daily close below 0.80 in order to sell aggressively.
EUR/USD fell apart this past week, and more specifically on Friday as there are many rumors as to whether or not the Greeks were preparing to default on their debts or not. Adding to the confusion, one of the members of the European Central Bank committee resigned as differences are boiling over in the central bank. We are ready to sell any and all rallies as the 1.40 level, the 1.3850 recent low, and several pieces of bad news such as a failed Greek bond auction on Friday have all culminated into very, very bad news for the common currency.
USD/JPY rose during the previous week as the 77 level seems to be a “line in the sand” for the Bank of Japan. The area has held up extraordinarily well in the face of serious risk off type of trading environment globally. The 80 mark above looks to be very strong resistance, and as such, we find this trade a little difficult to hang onto. If we can clear the 80 level – this pair goes up and much higher than most people will expect. We don’t’ short this pair, as it invites the Bank of Japan to intervene.
The GBP/USD pair fell hard this past week, and is approaching the recent low in the 1.5750 area. The bottom of the hammer for that week will serve as a trigger for selling this pair for the longer-term. The cable pair is very sensitive to the risk environment in the global markets, and as such we feel there is much more risk to the downside as opposed to the upside. The area could be supportive, but this chart almost looks doomed to fail. We are selling a break below that level.
USD/CHF shot straight up this previous week after the Swiss National Bank announced it “could no longer tolerate a EUR/CHF cross rate below 1.20”. Because of this, the CHF lost massive amounts of value as the SNB pushed the markets into selling them. The USD is being bought hand over fist, and as such – this move supercharged this pair, causing it to gain 1,000+ pips for the week. Because of this, we cannot sell this pair – we can only buy it. We are waiting to see a bit of a pullback in order to join this move up.
EUR/CHF shot straight up during the week as the Swiss National Bank decided that it “can no longer tolerate the EUR/CHF being below 1.20”. This is unheard of for a central bank to come straight out and say this, and it even went so far as to say it would be willing to buy “unlimited” amounts of foreign currency to defend this level. Because of this, we aren’t willing to fight them. We are looking to buy this pair, perhaps near the 1.20 level, but must give the stop loss some range, perhaps below the 1.15 area.
The AUD/USD pair fell during the previous week, as we suggested could happen based upon the shooting star formed the week before. However, there is massive support below this level as represented by the massive hammer from 5 weeks ago. The area should be massively supportive, even if we are starting to show a bearish bias in the global markets. Because of this, the pair will be hard to sell until we clear the parity level. At that point, we are short for the long-term.
USD/CAD had a bullish week as the oil markets sold off. The parity level just above is massively resistive, and kept prices down. However, we saw that there was a hammer printed the week before, so this bullish move isn’t overly surprising. The pair has been stuck in a 300 pip range over the last couple of weeks, and a move is certainly about to happen. We like buying on a break above the parity level, perhaps a daily close above it, and we like selling on a break below the 0.98 level under the same circumstances.
The NZD/USD pair fell after forming a shooting star the previous week. We stated that we expected this pair to fall, but only as a sign of consolidation. The markets have fallen, and we still feel that this pair could consolidate as opposed to melting down. If you are in the trade, there is probably a little more in the short position. However, if you haven’t shorted this pair yet, you are better off waiting to see if the 0.8000 level gives way. If it does, we are massively short.
Light Sweet Crude
The CL contract had a neutral week during the last 5 sessions, but remains in an uptrend as of late. The pair is forming a triangle that is ascending, and that is a bullish sign if we get above the $90 mark. With all of the headwinds out there for the financial world, it is hard to believe – but this is what the charts say at the moment. We don’t sell, we buy above $90.
The Brent markets have had a whippy week over the same time frame, and looks like it might be trying to break down a bit. If it does – this could be a move to retest the $100 mark. However, there is a couple of places that need to be broken through before we can sell. The $105 and $100 levels must be overcome before we sell. Because of this – we are flat of this market until we get more clarit
The natural gas markets had a slightly bullish week during the last 5 sessions, but are also printing a shooting star on the weekly chart. This shows that we could be winding up for another leg down in this market, and since it is with the trend – we welcome that. We are aggressively selling this market on a break below the $3.80 level. The market cannot be bought as it is simply far too bearish.
The gold markets were fairly flat at the close of the week, after spending the week going back in forth in a rapid manner. This is becoming the norm for this market, so smaller positions are the order of the day if you are going to be trading longer-term positions. The market is still a buy only market, although it does look slightly toppy at these levels. We are avid buyers on pullbacks, especially to the $1,700 area which we feel is the floor presently.
Light Sweet Crude
The CL contract fell on Friday, but rose in the later hours during US trading. The resulting candle is a hammer, and it should be noted that the low is high than the previous low. With this in mind, we feel that the pressure is still mounting to the upside, and $90 is still absolutely vital to break above in order to get serious traction forward. The bias is to the upside, and we continue to buy dips.
The Brent markets fell significantly during the Friday session, but managed to find buyers at the $110 level. Because of this, we are still in an upward channel, and still prefer going long of Brent as opposed to shorting it. In fact, we buy dips until we break below the $100 area. We are looking for supportive looking candle in this area in order to buy the market.
The natural gas markets fell on Friday, as most commodities did. The market is still in our recent range from $4.10 to $3.80, but the latest highs are lower than the previous ones. This suggests that perhaps the market is winding up for its next fall. A new low would have us selling aggressively. We cannot be bothered to buy, as the natural gas supply is simply far too expansive in relation to demand.
Gold markets fell on Friday as traders sold off everything they owned. The market did make a comeback later in the day, and it appears that many traders and funds were forced to liquidate their gold positions in order to cover other losses. (This happens quite often, and explains days like this, when the market is full of fear, yet gold falls. There is almost always a snap back like we had in the US session as well.) The resulting candle is a hammer, and the market looks very bullish at this point. However, this bullishness does produce whipsaw trading, and wide stops are needed. If you want to go long, it is probably the right direction, (It has been for 10 years) but be aware that the market is getting comfortable with $50 swings everyday.
Light Sweet Crude
The CL contract pulled back on Thursday, but only slightly so as the $90 resistance level came into play. The market has had a bullish bias over the last few weeks, and we feel as long as it stays above the $80 mark – we should only buy. The pullback on Thursday wasn’t really significant enough to buy into, so we will wait for lower levels. If not, a daily close above $90 is good enough for us to buy as well.
The Brent markets fell on Thursday as the $115 area held firmly as resistance. The market has been rising over the last few weeks, and every time it has pulled back – there has been an opportunity to buy. The $112.50 area is support, and of course the $110 area is as well. If we can get some supportive action like a hammer on the smaller times frames – we would be buyers of this market. We won’t sell, as the move has been significant. If it falls, we simply wait for that support candle at lower levels.