Trade Week Analysis (brief): 08/07/13

This coming week: 
  • I’m still away for another week so this is just a brief update noting key levels on a few pairs.
  • The USD still seems to be driving all the action at the moment. Continued bullish moves on the USD will continue to spell bad news for the E/U, A/U, G/U and Kiwi etc. The current ‘risk on’ approach with stocks is at odds with this though and is the ‘conundrum’ I’ve been talking about. I’ll be watching the USD to see what it does and, thus, be guided to possible moves on the currencies.
  • Check your trading calendar before placing any trades.

EUR/USD: This is looking very bearish. Price has broken through a weekly support trend line as seen on the weekly and monthly charts. The 1.28 level now looks to be a better ‘neckline’ for the H&S pattern and will be the level to watch next week. Price is now below the Ichimoku Cloud on the daily and 4hr chart which is bearish. The open signal on this pair is now up over 160 pips. Any continued bullish outlook on stocks and the US economy might help to hold this pair up a bit but I’ll be watching the 1.28 level:

AUD/USD: This is hovering above the support of the 0.90 level. I’ll be watching this level over the coming week to see if it can hold price. If not, then I think the 0.83 level (monthly 200 EMA) and then the 80 level (area of 61.8% fib from the last swing high) might be visited. Price is below the Ichimoku Cloud on the daily and 4hr time frame which is bearish.  Note the trading channel on the weekly chart! Two cautionary points to note here though. 
  • the weekly chart does have a bit of a bullish ‘inverted hammer’ to the last weekly candle.
  • any continued bullish moves with stocks might help to support the Aussie ( an old correlation and, hopefully, a good one!)

EUR/AUD: I’m still watching the 1.40 level on this pair. A daily support trend line is still in place BUT the weekly candle closed as a bearish engulfing candle. Price is above the Cloud on the daily BUT in the Cloud on the 4hr suggesting further choppiness. I’m watching to see if the 1.40 level holds:

GBP/USD: Price is down below the 1.50 level which is quite bearish. A major monthly support line is trying to hold price but is struggling. The open TS signal here is up 200 pips. The weekly candle was a large bearish candle. Price is below the Ichimoku Cloud on the daily and 4 hr charts which is bearish. I would expect the 1.50 level to be tested again before it falls further so people might want to try getting in short there. I’d be a bit cautious though as price is near the lows from back in March and this may act as some support and promote a possible double bottom (see daily chart):


S&P500:  Stocks are looking bullish on the weekly chart as price still seems to be trading in a bull flag pattern;

S&P500 Ichimoku: price is back in the Cloud so stocks may be a bit choppy. The top of the Cloud might be a bit of resistance but I’d watch out if they break free of the Cloud:
S&P500: still under the daily trend line but watch out if they close above this level as that would be a bullish signal: