After a strong performance for European and US Equity markets we have Asian equities off to a strong start though from the currency side we have an anemic start for the Asian market as majors for the most part remain range bound much as the latter half of the New York session. For now we have Chinese Trade figures at the top of the hour (0300GMT) with surplus for May expected at $18.6 Billion. Note this will likely have a bullish impact for the comodity currencies keep a close eye on the Aussy and Kiwi.
Aussy saw a false break of its daily congestion floor at 1.0592 closing Thursday well inside the markets range for the last two weeks with a long tail from the daily candle. Indicators remain bearish with daily stochastic dropping and macd’s crossing lower. Intraday we have a macd poised for a bullish crossover in 4H charts while stochastic is pushing for overbought levels. Hourly indicator also see a confluence of buys. Look for a close above 1.0663 to trigger a surge for the 1.0756 key resistance area or use a bounce off 1.0618 for a bullish entry.
We continue to see new highs in kiwi with the move for the most part driven by ‘hot money’ flows. Stochastic is now overbought in the daily level while macd continues to push up. In 4H charts we have a spinning top for the previous candle that saw a pullback to 38.2 Fib of the latest upswing, 0.8241. Stochastic is coming off overbought levels while macd is rising. Hourly indicators are mixed with stochastic rising and macd dropping. With the close of the week consider shorts from the new historic highs at 0.8301 with tight stops just above 0.8329 for 0.8241 and a possible double top.
At the close USDCAD again found itself inside the trading range for the week though daily indicators continue to be bearish with macd’s opening lower and stochastic under its signal line. Note we currently have USDCAD below the congestion floor of 0.9742 though this support has been porous with multiple intraday violations. Intraday we have 4H stochastic oversold and macd dropping along with the current candle to negate a previous morning star. Hourly indicators are showing a new confluence of bears. Given the small average daily range we prefer avoiding breakout trades. Consider shorts from just under 0.9751 with stops at 0.9775 for 0.9722 then on to 0.9665.
Despite the equity rally EURUSD at the closed still ended below the earlier congestion floor for the first half of the week with prices at one point seeing an intraday break of the 1.4516 region. Daily indicators now see our stochastic headed for oversold levels while macd is topping off. In 4H charts we have a confluence of bears for the moment though stochastic risks crossover. Hourly indicators for the most part are bullish with stochastic heading for the 80 level while macd is seeing a new bullish cross. Given the SHS breakout in the 4H charts we are looking for prices to pullback to the neckline currently around 1.4569 for new shorts from the region targets at 1.4516 then on to 1.4437 the pattern objective.
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