USD/CAD Technical Analysis August 18, 2011

The USD/CAD pair fell below the all-important 0.98 level on Wednesday, only to bounce back up and above it. The resulting candle looks a lot like a hammer and as such, we think this pair could consolidate in the 0.98 to 0.99 level yet again. The oil markets are vital to this pair, and they are going to have to overtake the $90 level in the CL contract in order to push this pair lower.

However, we should note that the trend is certainly down, and a bounce from here has a long way to go before that changes. Because of this, we like selling on a close below 0.98 or a failure to break above parity.

NZD/USD Technical Analysis August 18, 2011

The NZD/USD pair rose on Wednesday, but managed to fall slightly at the end of the session. The pair is decidedly bullish, and it appears we could be building a bit of a base between 0.80 and 0.83 from which to launch the next bullish move. However, is also should be said that the pair looks like it might take a while to do this.

The NZD/USD has a long history of going nowhere for a long period of time, and then exploding in one direction or another. This is because the market for the Kiwi is relatively small, and as such – the moves become a bit more explosive. We recommend buying on the dips in anticipation of a large move to the upside.

EUR/USD Technical Analysis August 17, 2011

The EUR/USD held up surprisingly well on Tuesday, even though French leader Sarkozy and German leader Merkel didn’t accomplish much with their meeting. One would have thought with the debt crisis taking center stage that the meeting would have been more important. However, the idea of a Euro bond has already been scoffed at by the Germans, so that did let some of the air out of the meeting.

The pair still looks like it wants to break to the upside as it fell on Tuesday, only to rise again to form a hammer. The breaking of the 1.45 level on a daily chart confirms that we are header much higher. Otherwise, a break of the low on Tuesday sends this pair back towards 1.40 or so.

USD/JPY Technical Analysis August 17, 2011

The USD/JPY pair continues to sit in a stagnant fashion as the psychological game between the trading world and the Bank of Japan continues. The threat of intervention by the BoJ continues to keep this pair from falling much farther than the 76 handle, but few are willing to buy the Dollar against the Yen either. Because of this, the pair looks “stuck” to us as the traders have simply left this market. Because of this, we are waiting for a large candle in order to pick a direction. Until then, there are going to be better pairs to trade.

GBP/USD Technical Analysis August 17, 2011

The GBP/USD pair continued to climb on Tuesday as traders were pleasantly surprised by a slightly higher than expected inflation report out of the UK this week. The pair still is stuck between the 1.65 and 1.60 levels, but pressure is increasing to the upside in general, and it might only be a matter of time before the level gives way. The real fight then would be fought between 1.65 and 1.70, which is a much more formidable area to deal with. We would advise letting the Wednesday candle print before making any decisions in this pair although it looks like 1.65 would more than likely hold, it has to be noted the latest fall only went as low as 1.61, and not the bottom of the range. This can often signal a break out coming. At the close on Wednesday, we should have more clarity.

USD/CHF Technical Analysis August 17, 2011

The USD/CHF pair had a bullish day on Tuesday as session saw a retest of the bullishness on Monday. The Swiss National Bank is set to make an announcement on Wednesday as to their intentions to devalue the Franc. This has the markets on edge, and traders are simply not willing to buy the Franc because of this. The truth is that this pair needed a pullback from the massive downtrend, and this move makes a lot of sense. Of course, the announcement on Wednesday will be crucial, so any positions before seeing that and more importantly the reaction – would be foolish as this is likely to rock the markets back and forth.

EUR/CHF Technical Analysis August 17, 2011

The EUR/CHF pair is without a doubt one of the most interesting pairs in the FX markets right now. Tuesday saw this pair fall slightly, but rise in the end, testing the 1.15 area again. The 1.15 area seems to be relatively resistive, and might be the key for further upside.

The Swiss National Bank is expected to announce measures to stem the rise of the Franc against the Euro (and other currencies) on Wednesday, and as such – we think this market will be very volatile and dangerous during the Wednesday session. If the announcement is made, and the pair cannot rally above 1.15 for any significant amount of time – this becomes a screaming sell. If it does rise above that level – the pair is best left alone in our opinion.

AUD/USD Technical Analysis August 17, 2011

The AUD/USD pair fell on Tuesday as the markets in general did, but then found a bid late in the day to form a bit of a hammer. Although it is at the top of the recent range, the candle means the same thing – potential bullishness. One of two things can happen here: Either the candle breaks to the upside, and we see that as a bullish move up to about 1.0750 or so, or we get a break to the downside, making that candle a “hanging man”, a very bearish signal indeed. The trend is up, so knowing that – you know which direction is more likely. However, waiting until one of the ends of the candle gets broken is the wise thing to do.

USD/CAD Technical Analysis August 17, 2011

The USD/CAD pair initially rose during the Tuesday session, but then fell to form a shooting star of sorts just above the 0.98 level. This crucial support level needs to give way for this candle to be a confirmed sell signal, but the trend is in that direction so one has to like the odds. However, we are waiting to see if the pair can close below that level on the 4 hour chart before committing to new shorts. Buying isn’t an option until we break well above parity at this point. Watching oil markets will be crucial as it will more than likely be the catalyst to push this pair. If oil rises, the CAD will strengthen, driving this pair lower.

NZD/USD Technical Analysis August 17, 2011

NZD/USD had a slightly confusing day on Tuesday as traders shunned risk for a large part of the session. However, the pair did manage a bounce in the latter hours to form a hammer. This is the second one in a row from the minor area at 0.83, and this could signal further strength ahead – at least until we see 0.85, which is the next major resistance area. We are buyers on a break of the Monday and Tuesday highs. We don’t sell this pair as the Kiwi has been far too bullish lately.

EUR/USD Technical Analysis August 16, 2011

The EUR/USD pair continues to rise on Monday as the possibility of a bullish flag being formed is still contemplated. The flag look like the final target would be as high as 1.65, based upon the “pole” of the pattern. Also, there is the possibility that we are not in a flag pattern, but rather a downward channel. Either way, this pair will be beholden to the Tuesday meeting between Sarkozy and Merkel. The reaction to that meeting could be the key for the destination for the pair in the long-term. If the EU cannot come to some kind of solution to the debt crisis, this pair will sink like a stone. In the meantime, the top of the flag is roughly 1.45, and if we can close above that level on the daily chart, we will be long this pair for several weeks if not months or years. Tuesday really could be that important. A failure to come to terms will be a simple sell and watch it fall scenario. In the interim, we are sitting still in this pair.

USD/JPY Technical Analysis August 16, 2011

The USD/JPY pair did very little on Monday as traders have learned that the Bank of Japan isn’t very amused by the attempts to push this pair below 77. The last several candles do in fact make several hammers, and this looks very supportive. We have been looking for that thrust upwards in which to join in. Until that happens, we can only watch. The entry point for us is the 77.60 mark – this is to give us a move above not only the 77 level, but the .50 level that often produces reactions in price as well. We won’t sell – the Bank of Japan won’t let us.

GBP/USD Technical Analysis August 16, 2011

The GBP/USD pair found itself rallying on Monday as traders took on more risk around the world. The pair has been bouncing between 1.60 and 1.65 or so for some time now, but it should be noted that the pair wasn’t able to reach the 1.60 on the last move down. This can be a sign of a failed run by the bears, and that the pair could rise once it breaks above the 1.65 level.

The Bank of England puts out the Inflation Letter on Tuesday, and the CPI also comes out. If either of these looks bullish or surprise to the upside, this pair will certainly break above that resistance area. However, the consensus is that they won’t, and if that is the case we might still be consolidating for a while.

USD/CHF Technical Analysis August 16, 2011

The USD/CHF has risen quite rapidly on Monday, as well as over the last few days as the Swiss National Bank looks like it wants to attempt a peg to the Euro in order to stem its rise. The conversation has scared a lot of the weaker players out of the markets, and we have shot straight up to the 0.8000 level. As you can see on the chart, it appears that we have failed to break above that level so far, and that we could get another leg down.

Any confirmation or refusal to peg this currency will have massive effects on the future of the Franc. The action on the Monday candle looks somewhat exhaustive, and as such – we are willing to step in on the short side if we can break the bottom of the Monday range. The pair certainly looks vulnerable suddenly, and this latest spike might just be another selling opportunity after all. We would have to close above 0.8000 on the daily chart to consider going long of this pair.

EUR/CHF Technical Analysis August 16, 2011

Threats of a currency peg continued to drive the price of EUR/CHF higher on Monday as traders have been running from the CHF in droves. However, at the end of the session, we have seen that the pair has failed at the 1.15 level, and is forming a shooting star. The trend is down, and as such – we like sell signals. The word is that if a peg is done, it will be to the 1.10 level, and that would mean that the market has to fall from here. We like the candle shape, the location, and the trend being part of this potential move. We are sellers if the bottom of the Monday range gives way to the downside. A break above this candle sends this pair looking for 1.18 and 1.20 respectively.

AUD/USD Technical Analysis August 16, 2011

AUD/USD rose again on Monday as traders took on more risk around the world. The pair has slammed into the 1.05 area, which is an area that once served as support. Because of this, we would assume that it serves as resistance in the near-term. Even with the massive fall last week, the trend is still most definitely up, and we would expect that level to give way eventually. In the meantime, we want to see a pullback in order to go long. The 1.04 could be supportive as well, based upon recent action.

USD/CAD Technical Analysis August 16, 2011

The USD/CAD pair fell fairly hard as oil markets rallied on Monday, pushing demand for the Loonie higher. If should be noted that this is with the trend, and as such – we expected this move. We had told you that the oil markets would hold the key for this pair, and this has proven true. The 0.98 level will be somewhat supportive as all round numbers tend to be, but in reality – this pair going down is natural as it is with the overall trend.

If oil can break above the $90 mark, you can pretty much bet that this pair falls hard in reaction. The 0.9450 level would be inviting as traders know that the situation in this pair is decidedly down. If economic numbers out of the US are good this week, (CPI on Thursday as well as Philly Fed numbers) this could accelerate the down move as traders will certainly buy oil, and then buy the CAD in turn.

NZD/USD Technical Analysis August 16, 2011

NZD/USD had a very quiet day as traders embraced all things risk-related on Monday. This is particularly odd as the Kiwi is considered a massive “risk on” play. The pair has gravitated towards the 0.83 level, even if it is somewhat minor in its importance. The upcoming PPI Input number on Tuesday could move this pair a bit, but in the meantime, we see this as being in a “holding pattern”. If the PPI Input number comes in higher than expected, ( > 1.2%) we could see a surge back to 0.85 in short order. If not, we think this pair wants to meander around the current level.

EUR/USD Technical Analysis August 15, 2011

EUR/USD rose slightly during an uninspired session on Friday. The pair continues to drift within the downward channel, and traders are currently trading as if the market wants to figure out which currency is worse. The current action seems to be “stuck” between the 1.40 and 1.45 areas. Because of this, we are waiting to see a move above 1.45, or a mover below 1.40 in order to buy or sell, depending on the direction.

USD/JPY Technical Analysis August 15, 2011

USD/JPY fell again on Friday as traders attempted to push prices lower, but as with the last several days, found themselves wanting. The BoJ intervened at this level recently, and there are indications that they may be thinking about doing it again. The markets know this, and as such – are not will to push the issue much farther. We see three hammers in a row, there is a good chance that we see a bounce from this area sooner or later.