Monday, November 3, 2008

forecast for week Nov 3 - 7

weekly candle 27-31 Oct, usd/chf.

A long lower shadow and a small real body forms at the top of an up move, this is the hanging man, a weak bearish signal.

CHF has been trending up since March and this pattern signals that the bears may be taking the initiative. I'd be cautious here until we see a definite direction. Resistance at 1.1750 and support at 1.1380

My forecast: it's touch and go whether the franc will regain its safe-haven status.

weekly candles long black 20-24 Oct; long white 27-31 Oct, usd/jpy.

A long white closes more than half way up the previous longer black, this is piercing lines, a bullish reversal pattern.
This week price will first encounter support at 95.70 and if this breaks down, the next target is 92.00. However, the pattern is bullish and we see a break out of 100 giving us a target of 103.30.

My forecast: watch the dollar reach for the stars

weekly candle 27-31 Oct, eur/usd.

Long shadows, small body, this is a spinning top, a sign of uncertainty. The long upper shadow gives the pattern a bearish tone and the long term trend is bearish too. The lower shadow is testing support at 1.25 and if this level breaks down, my next target is 1.20. Resistance at 1.3275.

My forecast: euro will weaken against the buck

weekly candles, long black 20-24 Oct; short white 27-31 Oct , gbp/usd.
Short white body, long shadows of equal length, this is a spinning top with neither a bearish not a bullish tone. Lower shadow forms tweezers with previous week's candle: signalling strong support at 1.5280. We see resistance at 1.6670, just above the evening doji star formed two weeks ago.

My forecast: watch sterling stumble against the greenback

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