Saturday, January 3, 2009

following the candles into 2009

...the new year opens to the first full trading week of the year and the candles shine out against the gloom predicted by pundits in all camps. the events of the coming year are way beyond the scope of this blog, however, the candles do have something to say about the coming week. i spy dollar bulls on eur and jpy, while the candles flag caution on chf and gbp.

let's take a closer look:
usd/jpy (dec 15-19; dec 22-26 & dec 29-jan 2) that long lower shadow on the black adds strength to the harami reversal signal from the black and the following white. last week's white adds further confirmation.

forecast: these three candles point to further yen weakness. however, I'll be waiting for a clean breakout of 92.60 before making a move.
support: 90.85
: 94.40

eur/usd (dec 22-26 & dec 29-jan 2) this bearish engulfing could well spell a euro reversal around the key psychological level of 1.40 and the black candle's long upper shadow brings more force to the argument.

the candles are telling me to sell the euro.
resistance: 1.4080
support: 1.3570

usd/chf (dec 15-19; dec 22-26 & dec 29-jan 2) the two long lower shadows of the first and third candles form tweezers (or as near as dammit!) testing support at around 1.0500. last week's dollar up-move against the franc wasn't strong enough to anticipate more dollar strength this week. I shall sit tight and wait for a breakout of the range of the dec 15-19 candle.

forecast: wait-and-see: the swissy is taking a breather.
support: 1.0500
resistance: 1.1200

gbp/usd (dec 29-jan 2) although sterling seems set for more weakness in the coming weeks this spinning top at the key psych level 0f 1.45 is giving me food for thought.

forecast: spinning top signals uncertainty so there's no call on cable this week.
support: after 1.45, look for 1.40 and then down to 1.3330
resistance: 1.4930

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