Weekly update week 10

It has been an interesting week last week. With Big Ben testifying, what resulted in a sell-off in gold and other commodities.


I am not going to say that I foresaw such a big  drop in gold, but reaching the 1800 level was a potential resistance, as price already once before bounced of this level. So there was no need to be long gold last week.


So let us start with what is on the charts for the coming week.


I will talk about the following instruments:

• EURUSD
• AUDJPY
• USDJPY
• Gold 
• Silver
• WTI

EURUSD

EURUSD - weekly

Last week the EURUSD gave back all of its gains it accumulated the week before that and bounced of nicely from the 50% fibonacci retracement and hence continued its downtrend.

Also the EMA is confirming the downtrend, only MACD is not convinced yet.

When the downtrend is indeed continuing we have a price target of 1.1620, levels we haven't seen since 2003.

This target is based on the fact that very often when price retraces 50% it will then extend to the 1.618% fib level, which in our case is this bespoken 1.1640.

Before it reaches that point we probably have some months to go and break the following supports:

1.3120, 1.2860, the recent low @1.2620

Just as a remainder, as always, these levels are to be understood as zones and not the precise support to the pip.

To the upside we still have the 50% fib as resistance @1.3435, the 61.8% fib level @1.3626 and of course the 1.3500 area.

This brings us to the daily chart.

EURUSD - daily

This chart is actually confirming the downtrend, the EMA is pointing down and the MACD went through the 0-line into the negative area. Stochastics is reaching oversold, so a short-term upwards movement in EURUSD could bring us good opportunities to short.

AUDJPY

AUDJPY -  weekly

This week the JPY weakness continued, with the result that it took only three days to take the resistance of 87.20 out, of which I spoke last week.

Judged by the long lower wicks, the bears are trying all they can to pull the pair down, but the bulls are just to strong to let tat happen.

This week price might come down a little bit, as it is currently trying to take out the 87.80 ~ 88.00 level. But once that level is taken, the way is clear for the 89.00 and up.

USDJPY

USDJPY - weekly

Due to the JPY weakness mentioned above this pair had no real difficulties pushing to the top level of the resistance zone drawn on the chart @81.80.

As with AUDJPY bears tried to hold the pair back but in vain.

Next resistance on the weekly chart is at 83.20 and once USDJPY steers clear of 81.80 it will head for that one.

When 81.80 is to big a resistance, price will probably start to range a little bit between 81.30 and 81.80, or fall back to 80.25

Gold

In the introduction I already spoke about the sell-off in gold, but the damage should have been limited, because there was no real reason to be long gold at that moment.

Gold - weekly

At the moment there is not much to tell about the shiny metal. The EMA went flat and the MACD turned down, so the trend is neutral, slightly bearish.

Gold - daily

The daily chart is bearish with EMA and MACD down. Stochastics is reaching oversold.

I am not very inclined to trade gold at this point and would rather want to see gold come back to the EMA and decide by then whether gold is offering a good trading opportunity.

Silver

Silver - weekly

Silver tried to break through the trend line I talked about last week, but it was then caught in the sell-off and force back between the 33.80 ~ 34.80 levels so nicely drawn on my charts last week.

Technically the trend is still up though with MACD being green and the EMA very slightly pointing up. Not very convincing though.

Silver - daily

Sentiment on the daily is down where silver found resistance on the EMA. When the MACD rejects zero and price still to the EMA, I might want to go long silver, but I am not too sure yet considering the trend line that is still in the way.

I'll keep you posted on this one.

WTI - CLJ2

WTI - CLJ2 - weekly

The 1.10 level was a bridge too far last week and in the sell-off in commodities last week crude was not spared either.

Sentiment is still up though, as seen by green MACD and EMA pointing up. So we might be still willing to buy crude from the daily chart.

WTI - CLJ2 - daily

And indeed the daily chart might be offering a good buy. At the moment the EMA is holding as support. It is pointing up (a little) so that is a bullish sign. The MACD is red however, which will hold us from going long just now. When it however decided to reject the zero line our buy signal is there.


Resistance on the way up would be at: 108.50, 110.00, 111.00
To the downside we see following support levels: 105.00, 103.20, 102.20

Natural gas - trade closed

Last Monday I have posted a trade idea for a short in natural gas. Today I closed the trade because the price almost reached the target price.


I closed the trade because we were only 30 ticks short of the target and the price had moved down significantly due to disappointing natural gas storage numbers announced today.


All in all I made a nice profit of 182 ticks.

Natural gas future - daily

Natural gas - trade idea

Looking at this weeks natural gas graph a trade idea stand out to me.

Provided that we are in a longer term down trend on the weekly natural gas tends to range on the daily chart.

Now that the stochastics has turned below the 80 line and MACD is also lower on the daily chart, we could try to ride it down to the bottom of the range at 2.43

We need to be careful at the 2.50 handle as it is the current inner channel boundary and a major psych level. So at that point look what the chart is telling and reconsider whether it is worthwhile to get  the extra points.

The stop loss will be at 2.87 a few points above the current top of the range.

Nat gas - daily

Weekly outlook week 9 2012

After last weeks fail to put up a weekly outlook I am resuming this week again. It just a matter of getting into the routine I suppose of putting up the things I do anyway in the blog.


In this week blog:

• EURUSD
• AUDJPY
• USDJPY
• Gold
• Silver
• WTI

Let start with the EUR/USD.


EURUSD


Two weeks ago I told you that because of the divergence I was bullish EURUSD and that panned out well. This week EUR/USD has to make a decision whether it was 'just' a correction or whether it will be a reversal altogether.

EURUSD - Weekly

As you can see we are at a cross roads on the weekly chart. The 50% retracement from the last down move has been reached, we have crossed the EMA and the EMA has gone flat.


This 50% fib by the way coincides roughly with the 38.2% retracement of the complete move from the 1.50000 levels.


This means that at this moment I am rather neutral on EURUSD. For me to become bullish again we have to break the 61.8% fib level and the EMA should turn up.


When on the other hand the 50% fib is holding and EMA will go down I will change to become a bear.


But what is the daily chart telling us?

EURUSD - Daily

On the daily chart we see a MACD that has just crossed the zero line and is bullish, the stochastics is in overbought area but has not crossed back yet, still this is bearish.


Furthermore EURUSD is traiding near the inner envelope of the EMA which also indicates that sentiment may start to shift downwards. The EMA itself is pointing up however indicating an upwards trend.


All in all it is rather mixed slightly biased towards bearish, as price will always try to get back to the EMA.


From this I might want to go short later this week, when both stochastics and the MACD turn around and there is still room between price and EMA, becuase when MACD turns around we will have a divergence set-up.


AUDJPY


I figure that most of the move is over reaching a major resistance at 87.20. Also the MACD has reached a level where I would be very hesitant to open new positions.


When AUDJPY is able to break through the 87.20 level  the next big resistance is at 89.60.

AUDJPY - Weekly

USDJPY


The USDJPY awoke from hibernation and took off. Gained 350 pips in two weeks where it has been ranging in a 150 pip band for nearly 14 weeks.




Without hesitation it took out the resistance at 80.35 and stopped short of the 81.30 - 81.80 resistance zone.

USDJPY - Weekly

Looking at MACD I can imagine that the thrust is exhausting and USDJPY  is taking a breath and move on to the 83.00 levels where the 38.2% fib level from the down move starting from May 2010 lies.




When this pair is not able to break through 81.30 right away it might fall back to 80.35.




As I probably will not trade this pair, you might want to look for some counter trend trades on the lower time frames <1h as I can see this pair falling back a little the coming week.


Gold


It seems as if gold has reestablished its uptrend as it broke through the trend line that was formed off the peak of 1900 in September last year.




Also the EMA turned up again and MACD is confirming it.

Gold - weekly

There is resistance at 1800, as there normally is at such round numbers and when gold is able to tackle this I can see it move up and challenge the all time high of $1912 per troy ounce.

Gold - daily

The daily chart looks a bit exhausted, the stochastics being in the overbought region and price at the boundary of the inner channel. MACD seems not be able to take off.


So although in an uptrend there might be some good counter trend possibilities on the lower time frames <1h this week.




Silver


Where as gold managed to break the trend line and so technically ended the correction, didn't silver manage to break through. It touch the downwards trend line but it held.

Silver - weekly

This is indeed very interesting as it can bring a nice trading opportunity in silver. When gold is continuing its uptrend, I cannot see silver staying at the same levels or below as it is trading right now.


As soon as silver leaves the down trend, the next resistance will be at 38 and 41. On the down side the support levels are 34 and 31.




WTI - CLJ2


The MACD of crude nicely rejected the 0-line of the MACD as talked about in then last weekly update two weeks ago.


When that happened it was a strong bullish signal and indeed it was. Crude is now heading to its recent high at 114 which also happens to be the 1.382 fib extension.

WTI - CLJ2 - Weekly

This 1.382 fib is so important because the correction in December last went to the 38.2 fib level. When price retraces to that level than more often than not a trend continuation will go to the 1.382 level.


Personally I think we will see a crude go straight to the 114 and then take a rest to decide to go on to the all time high at 140.


When it will fall back from this levels the next support is at the 108.50 and 103.30 levels.

Inflation rising exponentionally

Unfortunately I didn't manage to put my weekly outlook online. Today I also haven't found the time and it makes no sense to put it on in the middle of the week. So it stays with the gold outlook.

I hope that next Saturday/Sunday I can do it again.

As constellation I have found a graph made a few weeks ago showing you how our government with the help of the central banks are actually killing our currencies. It is a kind of a gold index. I took the price of Gold in February 2002 and normalized it to 100. This factor was then applied to the gold graph.

When you take gold as the only stable currency in the world, this would show the relative inflation factor of the currencies among each other. You can clearly see that the Australian dollar suffered the least from inflation against gold.

You can also see that the euro, the whole world seems to bash nowadays, does actually quite well. From the majors only AUD, JPY, NZD and CHF are doing better, leaving EUR in the middle of the leaugue (JPY, NZD and CHF are not shown).

I must admit that the graph is a little bit exaggerated due to the fact that there is also a bit of 'gold rush' going on, meaning that the price of gold might be a little overvalued (when that would be possible).


Judge for yourself.

Week 8 - Weekly outlook

First of all let's look at the AUDJPY which I past on last Tuesday. Well I can be short about it I should have taken it, it would even have reached my target profit on Wednesday.

Gold - bullish


It looks as if gold is resuming it's uptrend. The MACD crossed zero and the EMA is pointing up. You can however argue that the downwards channel is still intact. Also the very small candles during the last month do not express overwhelming strength.

I am bullish gold, but a sign of more strength is highly welcome

Gold - weekly

-- to be continued

Week 7 - To trade or not to trade

In my outlook this Sunday I stated that I would watch the AUDJPY for longs.

One could say that the signal I have been waiting for just came. Still I decided to not to take it. Why?

AUDJPY - Daily

The EMA is indicating a nice steady uptrend and the price just broke through resistance at 83.75. This would call for a trade. Looking at the MACD and the stochastics in particular made me decide to pass. The MACD is not really supporting the move and is 'recovering' from a bearish divergence, and might even make tripple bearish divergence.

The stochastics just turned back to the overbought area and although currencies can stay oversold for quite a longtime and still go up, I rather wait for it to be in healthier regions.

A wise decision? Only time will tell.