November Market Update (Week 3)

Last Friday, after the Prelim UoM Consumer Sentiment on the US, EUR:USD proved the recent indecision and is still bouncing between the 1.23 and the 1.26 levels.

Not much else going on this week as most of the currency pairs are in a consolidation/phase 2 stage.

JPY crosses still on the rally even after the statement on Wednesday from the Japanese Prime Minister in reply to the apparent failure of the economical measures adopted after 2 quarters of contraction.

The American indices are still breaking new all time record highs and the European relatives also showing some recovery after the dip in September and October.

Gold is still fighting against the support level at 1180. Price action proved some heavy buying seen on both the Daily and Weekly charts. Oil price is now at 75 and showing no signals of stopping.

Best Trades This Week

1. GBPJPY (Daily Chart) –Trend Continuation Long – 17.11.2014 – Once again, as both the ‘Technicals’ and the ‘Fundamentals’ are on the same side, all the Yen crosses keep rallying. This time, an opportunity presented itself after the apparent rejection on the 17th. This was the perfect excuse to scale in on this trade. At a +1% profit right now it is strongly advised to protect your capital and maybe take some profits.

2. AUDNZD (Daily Chart) – Range Short Trade – 03.11.2014 – a follow up on last week range trade – it reached the support level and our +4% target. Make sure to do all the analysis before deciding to take the long trade. It is looking attractive in terms of Price action although the RSI Oscillator does not confirm it. In the end – follow your rules.

3. EUR:GBP (Weekly chart) – Long – 13.11.2014 – a perfect technical setup supported by the similarity on both the EURUSD and the GBPUSD charts proving the dollar strength. Perfect level at 0.7750 and Divergence on the Stochastic showed the clues we needed and when price action confirmed it we had to take it. Now at +2% profit whilst touching the recent range upper level. Two options – considering a range based trade it is now successful. As a trend reversal it looks like a potential new long trend… Act accordingly.

EFFECT OF THE NEWS LOOKING FORWARD

President Draghi will speak this Friday and at the European Banking Congress on the 24th which is always a concern for traders and open trades. On the other hand, the US bank holiday promises a slow end of the week.

There’s also concern regarding the Australian dollar on the 27th. The Mid-Year Economic and Fiscal Outlook next week might dictate the breakout of the 85.60 level that is holding for so long. As always, we’ll let price show us what to do and how to do it.

As expected we can now see some buying orders getting triggered on Gold. As previously advised, we should be very careful as the Swiss referendum on the 30th might dictate the price for the next months.

Oil is now at the 75 level. This steep trend is supported by the heavy production from the US and is now reaching a point where the Oil price needs to react. As oil production price is around 70, we should expect to see some reaction from price around that fundamental level.