May (WK3) Market Update

This week the currency market showed us the expected signals from the USDollar weakness but after a few continuation signals, the Dollar regained its lost power and the bigger Time Frame trends started to announce again. All EUR crosses as well as most of the other most correlated pairs, started to drop consistently and closed in a surprising but convincing way.

On the Indices this was a positive week for the European markets with CAC and DAX moving further up almost every day although the all time high is yet to be broken as price did not show the decision from the 1st trimester of the year. On the American side, price actually broke the all time highs – DOW and S&P – but is still testing them as we cannot see a major decisive breakthrough yet. In Asia, Nikkei continues its unstoppable uptrend now at 20373 while Hang Seng closed the week with another jump to the upside and is currently approaching the all time highs once again.

Gold and Silver didn’t follow through on the apparent break last week and pulled back into the (usual) range. As for Oil it remained in a very indecisive pattern stuck in a 400 point range all week.

 

Best Trades this week

  1. NZDUSD (Daily Chart) – Continuation short – 14.05.2015 – After being stuch in a range for the last few weeks, the overall downtrend started again. The signal came from a clear high test bar bouncing of all the moving averages that wre already announcing the beginning of the move. Currently at around +2% we can see the next support level at 0.7180.

 

20150522_NZD

EFFECT OF THE NEWS LOOKING FORWARD

This week should only start on Tuesday after the Bank Holidays. Regarding the news, all the attention will be focused on the G8 meetings starting Wednesday.

On the currency market, we are now looking forward to see if the major drop at the end of last week will become a definite move to the downside on the EUR crosses. As this drop was also spotted on most majors and minors, we are guessing that this is a renewed USDollar strength. Looking at the bigger picture, it is looking more and more like the overall trends on Euro, Sterling, Australian, New Zealand and the Canadian Dollar, and even the Swiss Franc, against the American currency, are all setting up for a comeback. As for the USDJPY, although it finally broke the tight range from the previous couple of weeks, we are still waiting to see the price reaction to the major 122 resistance level.

Regarding the Indices we are waiting for price action to break the levels of resistance before starting to look for the signals to join the uptrends. We will be paying attention mostly to: CAC, DAX, Hang Seng, and the 3 American Indices. Nikkei is obviously on our watchlist as well as the uptrend seems to be in an never stopping decisive move.

As for the commodities, we are definitely holding all calls on Gold, Silver and Oil until the market shows some signal of breaking the very indecisive patterns that are starting to become a habit for the last weeks.