Sunday, December 7, 2008

can i get there by candlelight? (calls on CHF, JPY & GBP

...as a retired policeman said to me this week these are indeed interesting times and maybe the candles can add a little clarity. however, the candles are challenging me at the moment, they are making me question how much I am queering their pitch :- just how much my perceptions are affecting what I was hoping to be a dispasionate analysis. of course, any pretensions to objectivity must been seen as naive, even hard scientists like physicists accept that and it follows then that something like candlestick analysis must be as subjective as they come. with this in mind, I am ready to grasp the nettle.


let's start with the least controversial:
eur/usd (dec 1-5) a pretty eventful week in the eurozone as jean-claude trichet broke with tradition by cutting interest rates by more than the expected amount. however, eur/usd was unmoved and closed the week to form a small simple doji which offered no confirmation for last week's hanging man.

forecast: i'm still waiting (respect to Diana Ross) as this pair stays resolutely in an ever-tightening range. when it breaks it could well be a big one!
support: 1.2390, resistance: 1.3090




usd/jpy (nov24-28 & dec 1-5) the previous week's spinning top was confirmed bearish by last week's long black. in normal circumstances this would be a 'go for it'. however, just pause for thought and consider the length of the lower shadow, there was a great deal of support for this pair below 93. more worringly, the pair is entering the territory where the bank of japan could well start weakening the yen - so procede with caution.

forecast: i'm with the bears here, but if the BoJ steps in all bets are off (as is the negative forecast rating!).
support: 90.90, resistance: 97


usd/chf (nov 24-28 & dec 1-5) my favourite this week. the previous week's black hanging man was followed by the same fruit of a different colour. what to do? i'm going to blend the candles (following Greg Morris, Candlestick Charting Explained) which will give us the open of the black and the close of the white. in otherwords a dragonfly (a 'T' with a long tail) and confirmation of the uptrend. i'm also heartened by the fact that the white body engulfs the black another bullish pointer. there is a lot of 'me' in this forecast and i'd welcome any comments/criticism.

forecast: i'm still a dollar bull when it comes to the franc.
support: 1.21, resistance: 1.2470


gbp/usd (nov 24-28 & dec 1-5) weird one this. the previous week's bullish confirmation went all bearish on me and wiped out almost 50% of the candles +ve running total. what we're left with is what i was taught was called penetrating lines, a bearish signal. however a quick scan of the internet revealed no such pattern. still, i'm ready to rank my memory over the internet and be bearish on cable.

forecast: the candles are telling me sterling is going down. however, they may be telling you something else!
support: after 1.45, 1.4130 , resistance: 1.50

1 comment:

Mike G said...

I wouldn't be discouraged by the candlestick results. I believe they provide a great starting point. In the absence of other significant data, they are the among strongest of technical indicators. However, significant fundamental changes will probably trump most technical indicators. I think the technicals follow significant fundamental changes and help us to measure the impact. Currently, fundamental changes to monetary policies are being made without regard to precedent and often without warning

 
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