December Market Update (Week 2)

As predicted, this was another slow week for the currency market. EURUSD pushed down again this time to the 1,22 level and (again) became an apparent retest… After an optimum result for the American employment numbers, dollar strength was seen against Canadian dollar and Australian dollar with the latest showing previous lows from 2010. The CAD also showing recent highs not seen for the last 2 years.

After a strong end of last week, the Yen weakness started to slow down as some of the crosses are even breaking recent lows and proving a potential end of the strong uptrend from August although small signals of a renewed weakness starting to become visible (?)…

The American Indices also continued to break record after record until this week some significant pullbacks reopened the advocates of the ‘big bend in the end’. As price and trend followers, we should wait for extra signals.

On the metals side, Gold and Silver continue to show higher highs and higher lows while on the energy market there doesn’t seem to be a support level strong enough to stop the Oil price from dropping even further week after week.

Best Trades this week

  1. USDCAD (4h Chart) – Trend Continuation Long – 02.12.2014 – Relying on the overall trend from the Daily chart, and scaling in on the previous trade from last week, this 3 bar – double inside – pattern on the 4h chart was enough for a great trade with the trend. After the cross of the ‘usual’ eMAs, the trade is now at a very interesting +7% profit.
  2. AUDNZD (Daily Chart) – Trend continuation/Breakout Short – 10.12.2014 – After the break of previous level at 1.09, the consolidation period between the 1st and the 9th, was the return to the now overall short trend. Now at a respectable +1,5% profit, the next significant level was hit at 1.06 – extra caution recommended now…

EFFECT OF THE NEWS LOOKING FORWARD

As the ‘final’ trading week, and according to the current price action, it should be a traditional slow one although the big warning signals regarding the upcoming news might dictate otherwise. The approach of the end of the year is also known as the period where most of the big players close some long term trades. The charts will tell us what to do and whether to trade or not. As always – follow your rules.

USDollar showing new yet shy signals of strength that might trigger the beginning of Phase 1 for a new test of lower lows on EURUSD s well as a visible influence on the other majors and minors.

Gold and Silver are at a point where they will make it or break it as if new higher highs and higher lows are seen, they will know also break the 100 moving average which is known to be one of the indicators that the big players in the market are always paying attention to. Close attention to this one as it might be the final confirmation of the end of the short trend.

Oil continues to be the short trade of the year as there is neither signal nor end in sight for the drop that started in June.