December Market Update (Week 1)

This was a steady and slow week for the currency market. The major events came from the apparent dollar renewed strength that finally pushed the EURUSD below the 1.2360 level. After a drop to the 1.2280 level, price is now retesting 1.24 after very hawkish projections from the ECB on the 4th.

Yen crosses are continuing to show increasingly higher highs as the American Indices also continue to rise – Nasdaq, Dow and S&P continuing to break all time records.

On the 1st, the market opened with a  major reaction to the no vote on the Swiss referendum on Sunday as we saw Gold and Silver rejecting the break of previous lows.

Best Trades This Week

  1. USDCAD (4h Chart) – Trend Continuation Long – 27.11.2014 – a very technical breakout of a clear triangle that breaks the channel on the 4h chart after a bounce off the moving averages on the Daily chart. A perfect beginning of Phase 1 on as price went straight up to the previous resistance level at the previous high also at a +2% target. Price is now at a +1% profit.
  2. USDJPY (Daily Chart) – Trend Continuation Long – 27.10.2014 – Again, a small pullback on the Daily chart and the right price action was the perfect technical setup for a new entry or scaling in on previous trades. Triggered on the 28th the trend resumed its ‘usual’ behaviour and kept going long. Now at a +3% profit there is no way of knowing when this trend will stop as the first level in sight is around the 124 level.
  3. AUDUSD (Daily Chart) – Trend continuation/Breakout Short – 27.10.2014 – After a ‘fake’ break of the previous low on the 26th, the one bar pullback was yet another reason to take the short side on the ‘Aussie’. Moving averages proved the overall trend and, after the break of the 0.8650 level, retested on the 17th, price just kept moving south. Now at a respectable +1,5% profit, the next significant level can be seen at 0.80.

EFFECT OF THE NEWS LOOKING FORWARD

Next week we expect to see the last few moves of the market this year…

EURUSD is now at strong decision point as its not resuming the short trend but there is no clear reversal indication either.

On the Commodities side – Gold, Silver and Oil – they are neither breaking nor rejecting the present levels so the next few days should show some signal of future direction for 2015.

Regarding the news:

Wednesday the 10th will be the cash rate announcement from the Reserve Bank of New Zealand – no change is expected but this is usually a moment where the ‘kiwi’ crosses tend to become really volatile, so act accordingly.

On the 11th, we will also have the definition of the Long Term rates for commercial banks which could be one of the last big moves of the year as it is always a major indication of the overall long term economic policies from the ECB.

Also remember that this is Non Farm Employment announcement week so be extra protective with the open trades and extra careful on any new ones.