This week was all about the Crude price. As expected the downtrend continued and we made the most of it by looking into the highly correlated currency pairs. All the major exporters suffered from this increasingly lower price – or should it be decreasingly? Anyway, the Australian, the New Zealand and the Canadian Dollars showed its weakness and the trends immediately followed, or continued.
As for the stock market, more panic from Asia made these last couple of weeks a potential ‘tipping point’ as the indices dropped even further. DAX, S&P and others now breaking and closing below several years trendlines and currently holding at recent support levels. The next week should clarify the overall direction – if there is still room for doubt.
On the commodities side, Crude still going and finally breaking below 30 USD and showing no signal of slowing down. As for Gold, after breaking to the upside last week, price is now retesting the 1080 level. It will be very interesting to watch the usual correlation between the stock market and this ‘safe haven’…
Best Trades this week
1. AUDJPY (Daily Chart) – Continuation Short – 13.01.2015 – A pullback to the moving averages and previous support level now acting as resistance was exactly what we werre waiting for. Taken on the high test test bar this trade is currently at +1% in profit and looking very good for a longer run…
EFFECT OF THE NEWS LOOKING FORWARD
This should be another slow start of the week with the Bank Holiday in the US.
On Tuesday we are expecting some volatility around the Inflation numbers from both UK and Europe on the following the same numbers from US should also show some increased price action. Also on Wednesday, the conference from the bank of Canada will be the event of the day with all investors looking forward for any news that might influence the consistent weakening of the Canadian Dollar and consequent correlation with the Oil price.
Thursday the focus will be once again on the European Central Bank conference as the week ends on Friday with the World Economic Forum which might include some ‘coffee break’ announcements that we will be keeping an eye on.
As the trends continue we are expecting the market to allow us to add even more positions to the already winning trades as ‘the trend is our friend’ and we see no reasons for ‘the bend in the end’.