Trade Spotting: Trade Week Analysis 19/11/12

Last week: It was a rather choppy week but there were some TS signals around. The E/J gave up to 200 pips, albeit this was helped by news, and the EUR/AUD ended up giving 150 pips. The total, all around, ended up being 425 but it was not an easy week at all. There were ‘risk off’ and ‘risk on’ signals occurring together and this made confidence in any of them quite difficult to achieve.

This week: ‘Fiscal Cliff’ discussion will most likely continue to dictate risk appetite this week and, indeed, until this is resolved. There is also still the ongoing saga that is Europe. The USDX is marching slowly up towards the 81.70 S/R level and still looks bullish. Many stocks are poised at significant support levels with the S&P500 and Dow trading just above their weekly support trend lines. Trading might be a bit thin this week given ongoing uncertainty about the US 'Fiscal Cliff ' and also due to the US Thanksgiving holiday. Whilst it seems more sensible to wait until after the Fiscal Cliff matter is dealt with before trading further this may take a few more weeks yet.

BTW: I have updated my 'Stocks:Nov' page.

E/U: The monthly bullish inverse H&S pattern is still valid. Price also seems to be forming a bullish inverse H&S pattern on the weekly chart! Price is trading in a trend channel on the 4hr chart that is set within a larger trend channel on the daily chart. The 1.2622 level is major support that can be best seen on the weekly and monthly chart and is just below current price action. Price is below the Cloud on the 4hr and almost below the Cloud on the daily Ichimoku charts.

I will look to SHORT the E/U on any new TS signal, if ‘risk off’ remains and if price breaks closes and holds below the 1.2622 level.
I will look to LONG the E/U on a new TS signal, if ‘risk on’ returns and if price breaks out and up from the smaller trading channel.

E/J: This pair is starting to look quite bullish and was helped along this week by talk of further Japanese Yen easing! Price looks set to try for another break of the monthly bear trend line. Price is trading above the Cloud on the daily and the 4hr chart which is bullish.

I will look to LONG the E/J on a new TS signal, if ‘risk on’ returns and if price breaks out and up from the triangle pattern.
I STILL WON’T SHORT the E/J this week given all the persistent rumours about possible BoJ stimulus.

A/U: Price has broken down from trading within the smaller of the two symmetrical triangles. The monthly pivot and the daily 200 EMA held up price late last week though. Price action is still printing a bull flag pattern on the monthly chart. Price is trading within the Cloud on daily and below the Cloud on the 4hr chart.

I will look to SHORT the A/U on a new TS signal, if ‘risk off’ returns and if price breaks down below the daily 200 EMA and the monthly pivot.
I will look to LONG the A/U on any new TS signal.

A/J: Price has been bullish most of the week and this pair was also helped by the talk of further Yen easing. I suspect that this pair might stay buoyant again this week due to this easing. This pair finished the week at the psychological number of 84 and this is also a major S/R level best seen on the weekly chart. Price is trading above the Cloud on the daily and on the 4hr chart which is bullish.

I WON’T SHORT the A/J this week given continued talk about Yen easing.
I will look to LONG the A/J on any new TS signal.

G/U: Price is still trading within a bullish descending broadening wedge pattern on the daily chart and within a bullish descending wedge on the 4hr chart. Price is trying to form a TS ‘LONG’ signal on the 4hr chart and to break up and out of the 4hr wedge pattern and above the daily 200 EMA. It is looking bullish but the weekly pivot might give any bullish move some grief. The 1.58 level is a bit below current price but is a major S/R level that can be best seen on the weekly chart. Price is trading below the Cloud on the daily and 4hr chart which is bearish so it has its work cut out ahead of it.

I will look to LONG the G/U on any new TS signal, if ‘risk on’ returns and if price breaks up and out of the wedge pattern and above the daily 200 EMA.
I will look to the SHORT the G/U on any new TS signal and if price breaks down from the wedge pattern. This would be near the 1.58 level which is a major S/R level for this pair.

USD/SGD: Price has continued to be fairly choppy on this pair again this week. Price rallied this week but without the USD. Price is trading below the Cloud on the daily chart and above the Cloud on the 4hr chart so, is divergent which spells ‘potentially choppy’. This is exactly what we've had!

I will look to LONG the USD/SGD on a new TS signal, if ‘risk off’ remains and if price closes above the Clouds on the Ichimoku charts.
I will look to SHORT the USD/SGD on a new TS signal and if ‘risk on’ returns.

Swissie USD/CHF: Price has also continued to be very choppy on this pair! That’s the Cloud divergence for you. Price is now trading in the Cloud on daily but just above the Cloud on the 4hr chart, so, is divergent which spells ‘continued choppy’. Price is trading within a symmetrical triangle on the daily chart but working its way closer towards the apex.

I will look to LONG the USD/CHF on a new TS signal, if ‘risk off’ remains and if price closes above the Clouds on both of the Ichimoku charts.
I will look to SHORT the USD/CHF on a new TS signal and if ‘risk on’ returns.

Loonie: USD/CAD: Price action has continued to be rather choppy on this pair last week as it tries to cope with the parity level on the USD. Price is trading within a symmetrical triangle on the weekly chart. There is also a support trend line is in place on the daily chart and this helps form a wedge pattern on the 4hr chart. Price is trading above the Cloud on the 4hr and the daily chart which is bullish.

I MIGHT look to LONG the USD/CAD on a new TS signal, if ‘risk off’ remains, if prices holds above parity and breaks out and up from the wedge pattern.
I MIGHT look to SHORT the USD/CAD on any new TS signal and if ‘risk on’ returns.

Kiwi: NZD/USD: I’m not a huge fan of this pair but I’m watching it too anyway. It’s too choppy at the moment though. Price is trying to hold above the daily 200 EMA. A break below this level might offer a good short opportunity though if 'risk off' continues to grip the markets. It is trading below the Cloud on both the daily and 4hr chart which is bearish.

I MIGHT look to LONG the Kiwi on a new TS signal, if ‘risk on’ returns and if price breaks out and up above the bear trend line
I MIGHT look to SHORT the Kiwi on any new TS signal and if ‘risk off’ remains and if price breaks below the daily 200 EMA.

EUR/AUD: I started watching this pair again recently. Price is trading within the Cloud on the daily and on the 4hr which means this pair might be choppy this week. This pair gave 150 pips last week on the second of two TS signals. I took the first short signal though for a whole 3 pips profit and missed the second signal!

I will look to SHORT the EUR/AUD on any new TS signal.
I will look to LONG the EUR/AUD on any new TS signal.

Gold/Silver: Both Gold and Silver look to be forming bullish ‘Cup and Handle’ patterns on the weekly charts. The theory is that the breakout target is equivalent to the depth of the cup. The 'handle' patterns can be seen on the daily charts and this is the area where one needs to watch for a potential bullish breakout.

'Cup and Handle' Pattern: