the candles continue to edge ahead

...another positive week for our calls. the dollar gained against the euro as concerns for the integrity of the 16-nation unit grew as Greece's credit rating was downgraded and Portugal, Ireland and (most worryingly) Spain said to be on the watch list. The ECB cut rates by the anticipated 50 bps to 2.00%. this precipitated further euro weakness perhaps because it's seen as too little too late or because Jean-Claude Trichet cued up another round of cuts for his March rendezvous. eur/usd recovered somewhat on Friday when the Bank of America was thrown another US government lifeline, bringing some much needed optimism to the markets.
With eur/usd opening the week at 1.3455 and closing on Friday at 1.3288, our short call brought in 167 pips. This gives us a forecast rating of +1.26%

Our buy call for usd/chf saw modest success with the pair opening at 1.1135 and closing at 1.1170. This brought a princely 35 pips into the pot. 35 pip is 0.31% of the closing price and thus gives us a forecast rating of +0.31%

All in all, the week's forecast total is +1.57%

Bringing our running total to +14.98%

Next week will be a difficult one to call with the Martin Luther King Day holiday and Barack Obama's inauguration bringing uncertainty to the markets. I'll be posting the candle signals tomorrow - until then, have a good weekend.

candle calls for this week (calls on eur & chf)

...this week is the last full trading week of 2008 and should prove to be full of interest. the fed are ensconced behind closed doors as I write and will announce their interest rate tomorrow, 19:15 gmt. the consensus is for a further 50bps cut to 0.50%.
the other big story this week will no doubt be the US Treasury's move to save the US auto industry from collapse. it's all very vague at the moment and this week should see the answers to the main questions:
how much?
from where? (george w said that using the tarp funds was a 'possibility')
and for how long? (most likely until obama takes the helm)

...as I was saying yesterday we've two calls:
eur/usd (dec 1-5 & dec 8-12): last week's long white confirmed the doji of the week before and could possibly mark the breakout of the narrowing range that eur/usd has been trading in for the last 6 0r so weeks.

forecast: the euro looks set to continue its recovery.
support: 1.3290
resistance: 1.3645




usd/chf (dec 8-12): the franc woke up and last week's impressive long black leads us to expect more downside action this week.

forecast: the candles remind us that december is often difficult for the dollar.

support: 1.1605
resistance: 1.1920




usd/jpy (dec 8-12) last week's long spinning top charts downside pressure as traders ran for cover. However, the dollar rally at the end of the week marked speculation that the BoJ would intervene to weaken the yen. Japan's finance minister left me no wiser on friday and that long lower shadow on the candle bodes caution.

forecast: the candles caution against pitting your account against the BoJ!
support: 89.0
resistance: 93.0


gbp/usd (dec 1-5 & dec 8-12): sterling tried to strengthen but couldn't break resistance at 1.50 and spent the week inside the previous week's range. Although the bias seems to be on the downside, the candles are holding their horses.

forecast: the candles are watching this ugly-contest with interest
support: 1.4660
resistance: 1.5150