FX Analysis October 22



It’s been a while since I have made a post here, so I thought time was due.  In addition, I have enjoyed posting videos on Chart.ly, but the video recording applet has been giving me issues, so I will best posting my thoughts here on 3 major pairs I am monitoring this morning.

EURUSD

Daily chart only needed, since the short-term charts look very ugly (imo, for me liking).  Look at this ugly action this week… yuck!  Those violent swings can signal a topping pattern after a big fierce move upward.  In addition, it is at the 61.8 retracement from 2009 highs/2010 lows.  There is also talk of a head & shoulders pattern on the 1-hour chart.  It just looks very ugly imo.  Regardless, I am fully convinced this will go lower.  The question is when & its catalyst.

GBPUSD

3 technical reasons to seek opportunities to short the pound.

  1. Double top
  2. Trendline break
  3. RSI not a concern at the moment

Fundamentally speaking, the United Kingdom announced austerity this week (aka major budget cuts).  Some economists think it will drive the UK into a double dip recession.

Down to the short term, 15-minute chart.  There is a bear flag, selling at the break, plan to hold all morning (watch out, it’s Friday, liquidity dries up end of London session). Face it, there is plenty of room on the downside, which also means to watch out for whipsaws.

On the flip side of things, it is at an upper trendline.  If it breaks above, buying opportunity. Trade what you see, not rely on fundamentals for 100% of your trades.

AUDUSD

Australia is the only developed country/monetary union that has a robust economy, thus has a strong currency.

  • They did all the right things to prevent themselves from going downward.
  • There was no housing bubble.
  • There was no subprime (which started this worldwide mess with the housing prices downfall in the US) They have the highest interest rates out of any developed country.
  • Commodities (especially gold) is dependent on the country & it’s currency (which has skyrocketed due to the falling dollar & a flight to safety).

Things to watch out for for it to go against the currency:

  • Falling gold (has fallen past week)
  • Slowing economy in China (geographic implications)

On to the daily chart! AUDUSD hit parity for “a minute” for the first time last week & has since fallen.  The price action also shows it could be a topping pattern as well.

On the short term (1-hour chart). It is pretty simple, there is some solid support at 0.9764, plenty of downside from there (watch out for whipsaws!).

Advertisements

About Clair Wyant

I am a foreign exchange & stock/ETF trader in Boston, MA. This blog will be dedicated to my out look in the economy, the financial markets, with an emphasis in foreign exchange. When I am not working, I enjoy watching sports, participating in recreational sports leagues, travel & spend good times with my friends.
This entry was posted in FX, US Dollar. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s