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EUR/AUD is a great barometer for global risk, and as it falls - it shows that traders are getting rid of the Euro for the more risky Australian dollar. The gap that was formed a couple of weeks ago is being retested, and we think a break below the 1.36 level should be a signal that this pair falls much farther. The EUR/NZD pair looks like the 1.75 level has repelled the bullish action as the world is feeling better about taking risk, and therefore wants to take on the Kiwi dollar. The 1.70 level is one that could be supportive, and if it gives way - we fall down to 1.60 before it is all said and done. Play video >>
The NZD/USD pair had a very bullish day on Tuesday, as traders around the world anticipate the Federal Reserve announcing QE3 on Friday. Because of this, most commodities are being bid and risk currencies like the Kiwi are being embraced. It should be noted that the minor resistance level of 0.8350 did stop the surge, and might offer some trouble until we get that announcement (or not) on Friday. NZD/CHF is an excellent barometer of global risk. The pair rose again, but still seems like the 0,67 level is going to hold this pair in check until we get the above mentioned announcement. Because of this, we feel that this pair could consolidate between 0.64 and 0.67 in the next couple of days. If QE doesn't happen - this pair will fall hard. If it does......we can only watch to see how the rest of the world feels via this classic "risk barometer". Play video >>
CAD/JPY had another quiet day on Monday, but one cannot help but notice the 77 level acting as a "line in the sand" of sorts as the Bank of Japan is very verbal about the markets lately. The BoJ threatening intervention should keep this pair afloat for the short-term. What we want to see is a supportive candle at 77 in order to buy. The pair remains to be held hostage to the BoJ and the oil markets as well. The EUR/CAD pair has formed a hammer on Monday, and it is reaching the 1.43 level again. The 1.43 gives way - and this pair could shoot straight up as we are in the middle of a massive ascending triangle. A break of the 1.44 level, or the break of the 1.43, with a pullback and retest of it being support would be massively bullish for this pair. This will more than likely coincide with a sell off in the oil markets. Play video >>
The AUD/NZD pair has pulled back after breaking recent resistance at the 1.26 level. This pair does look set to try and find support at this area, and a move upwards would be a continuation of the longer-term uptrend. The pair looks like a solid buy if we find this area as supportive on the daily chart. The AUD/USD pair has tried to break above the 1.05 level for the last couple of sessions, and Monday saw a repeat of this. The resulting candle at the end of the session ended up being a shooting star, and as such is showing us potential weakness. If we sell off in this pair - we should run to 1.01 or even parity in fairly short order. Play video >>
AUD/JPY has settled down a bit on Friday, and sits just above the last cluster of support. With the Bank of Japan looking to intervene in the near future, we feel that a buying opportunity may present itself if we break the highs of Friday's session. The AUD/USD pair looks like it failed at the 1.05 resistance area. The pair could become choppy as it bangs around between 1.03 and 1.06, as well as 1.01 and 1.03. These two areas should keep Aussie trading in a tight range. Play video >>
The EUR/CHF pair continues to sit just under the 1.15 area, and is now looking a little weak. However, we haven't gotten a large candle or shooting star or the like to sell - but we are watching at this level as the situation in the EU is getting more and more bleak. Even with the SNB working to lift this pair, the weight of the market will more than likely be too much in the end - just like it was when they intervened around the 1.38 handle. The EUR/AUD pair is a great barometer of risk aversion in the markets. While there is a trade here - if we break below the gap, the reality is that this pair will tilt towards the EUR when the world is nervous, and towards the AUD when the markets are in bull mode. Because of this - it's an important pair to watch. Play video >>
The USD/JPY pair has formed a hammer on the weekly time frame as traders pushed the pair down through the 76 handle, only to back away in the end. With the Bank of Japan looking like they are ready to intervene, this is probably wise. If we can get above 77.50 - we would actually buy it. The USD/CHF pair managed to break the top of the previous week's hammer, but then just simply sat there. This shows 0.8000 to be massive resistance, and as a result could lead to more weakness when the eventual move does happen. The USD/CAD pair had a wild week, and simply seems to be a slave to the whims of the oil markets. We are watching parity and 0.98 for our next move. We think that if oil (CL) gives up the 80 USD mark to the downside, parity will be hopped over in this pair. Alternately, if the $90 mark gets broken to the upside in CL, this pair runs back towards the 0.9450 area. Play video >>
EUR/NZD rose on Thursday as fear crept back into the markets. The global sell off was swift and brutal on Thursday, and we saw many of the European indices shed over 5%. The pair shows how the world feels about risk, with the NZD gaining, or this pair falling, when traders feel better about taking risk in the markets. With the 1.75 area approaching, we feel that this pair should be watched for any signs of weakness on Friday - perhaps in the form of a shooting star or long red candle. If we get that, we won't hesitate to sell this pair. If we close above this level on the daily chart, we could see 1.80 for it is all said and done. The EUR/JPY pair fell on Thursday, but the Bank of Japan is sitting below and waiting for the markets to make a move. Because of this, the fall was a little more muted than one would have expected during a massive sell off like we had on Thursday. We think this pair can be shorted - as the Bank of Japan doesn't worry so much about it, but if you choose to do this - you MUST keep an eye on USD/JPY. If it fall s too fast, the BoJ will get involved. If they do that, the Yen will get sold off against the major currencies. It is a dangerous cross to play at the moment, but watching it can give you a great barometer of the world's risk appetite. If we get a supportive candle at the close on Friday - we will not hesitate to buy as well. 110 is a MASSIVE area that should be watched. Depending on the Friday close, we could get a longer-term signal. Play video >>
The USD/CHF pair has formed yet another tight-ranged candle on Thursday, as the 0.8000 level seems to be a bit of a cap on the SNB related bounce from the last week or so. The area is a massive psychologically important level, and as such we will see major things being decided here. The outlook for this pair is simple: wait for the large candle on the daily chart - and you will know the future direction of the pair for at least the next several handles. USD/CAD found itself rising during the session as the oil markets sold off in a harsh manner. The oil markets falling often reduce desire to own the CAD, and this chart shows that in spades. The oil markets simply must hold above the $80 mark if we are to see the downtrend continue. A break below the level could send this pair far above parity. Play video >>
The USD/JPY pair did something on Wednesday that it hasn't done lately - it stayed down. The previous candles have all bounced slightly to form hammers. This could signal that the pair is ready to fall again, but this isn't a free market presently. The Bank of Japan looks to intervene (in our opinion) if the pair falls below 76. The EUR/JPY formed a doji just above the 110 level on Wednesday, and gives us an easy signal to follow.....if we break above the range of the Wednesday candle - we buy. If we break below - we sell. Of course, if the BoJ intervenes it will be a direct result of the USD/JPY falling, so make sure it isn't melting down when you put a position on. Play video >>
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