I will not be posting on Wednesday-Friday since I will be out of town, and seeing how this is the most traveled holiday (yes even more than Christmas), I am expecting a rather low volume of traders during these days. I highly advise that you take a vacation from trading and enjoy the time off. If you're outside of the US, use this time to maybe re-focus. Review your past trades. Review your current trading systems. Just take a few days to analyze yourself as a trader. This is the perfect time to do so!
My Bias-O-Meter is once again telling me that the dollar is poised for a sell-off. I've been seeing a downtrend for the dollar across the majors for about 3 weeks now. This doesn't necessarily mean that the dollar will be bearish from now on, but it does give me some indication as to where the dollar may be headed in the medium term.
Weekly Bias-O-Meter:
EUR/USD; GBP/USD= Bullish
USD/CHF; USD/JPY= Bearish
Coming Up:
Absolutely nothing! Well not really, but there isn't anything major coming out. The BOJ minutes will be released so you might want to go over that but I don't see anything major coming out tomorrow.
Chart Analysis:
EUR/USD
Am I good or am I great? I said on Thursday that I felt 2800 was a good support and that if the price dipped it would find support at around 2770 which was where the 100 SMA was approaching. I also said that I felt the price would move back to 2850. Like magic, the pair did exactly that and I once again have a big head. I apologize and hope you can bare with me! Deep breath......ok back to reality. After all the bouncing the 2800 is giving us, I think we're going to see a stronger push down this time. With the lack of fundamental reports this week mixed with the Thanksgiving holidays I'm not sure if we'll see that push this week. However, my next target for the Euro is 2750. Stochastics on the 4hr has plenty of room to fall but depending on the movement the pair may just bounce off of 2770 again. We'll have to wait and see.
GBP/USD
Well my trade never got triggered but my thinking was correct. There were a lot of signs pointing towards a reversal to the upside and 8850 looked to be the bottom of before the reversal. The pair has moved nicely and is currently around 8970. My next guess would be for the Cable to retrace down to around 8900 as the 4hr stochastics is showing an extended overbought signal. The 50 SMA on the daily chart is also approaching 8900 so that should be a good support area. Look for a move towards 8900 before another bounce back up.
USD/CHF
I said on Thursday that I felt that 2500 would hold as a good resistance level and after a brief spike, the pair ended up closing back below 2500 on Friday. I targeted 2400 and the pair hit that level today. From the 4hr stochastics point of view it looks like a move up is the next play. However the pair faces resistance at the 50 and 100 SMA on the 4 hr chart which is hovering right above the price at around 2460. Not really sure where this is going.
USD/JPY
Woooweee the Yen is trading tighter than the Ohio State vs. Michigan game was! From my vantage point I'm seeing an ascending triangle on the daily chart. I think a breakout is going to happen soon but it may not happen until after this week. 118.50 will be the level to break. If we see this broken, look for a move to at least 119.00 and maybe even 119.50.
Conclusion:
It's a short week with very few fundamental reports. Look for a lot of spikes and range trading. Be very careful if you trade this week.
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