Monday, December 22, 2008

shadowing christmas

...the candles [or at least their shadows] have something to say about all four majors this week. however, anyone who is trading this week should take extra care to tighten their stops and be
rigorous with their risk management. this is what the candles are telling me for this week:

eur/usd (dec 15-19): the euro's rise and fall last week has been well-chronicled. that long upper shadow points to bearish pressure and its length suggests to me that the euro will more probably fall this week than rise.

forecast: as long as resistance holds at 1.4180, usd should prevail over eur.

support: 1.3500
resistance: 1.4180

usd/chf (dec 15-19): as is so oten the case the swissy is a mirror-image of eur. however, note that this move had more vigour.

forecast: that long lower shadow makes dollar strength against chf more likely than dollar weakness.

support: 1.0696
resistance: 1.1420

...if I were to make a choice between these two signals, I'd go for the eur call.

gbp/usd (dec 15-19): this week's doji shows that the ugly contest I wrote of last week ended with the dollar coming out less repulsive.

forecast: that long upper shadow signals more winter darkness for poor old sterling

support: 1.4470
resistance: 1.5250

usd/jpy (dec 15-19): although this lower shadow is the weakest of the four, the odds are that an upmove is on the cards.

forecast: if it's touch and go and the yen continues to strengthen, the BoJ might well help us out. we see some improvement for usd/jpy

support: 88.30
resistance: 92.50

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