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

the candles splutter as the franc freefalls

...not a great week for the candles, however the lion's share of the blame must be placed on my broad shoulders.
I mentioned last week that there was a lot of 'me' in the usd/chf forecast and the market rapped my knuckles as the dollar lost ground in the safe-haven stakes to the tune of 424 pips over the week. that's a forecast rating of -3.6%
gbp/usd fared a little better (if not much) as the dollar weakened acoss the board. sterling saw a 205 pip gain against the greenback (forecast rating: -1.37%). however, sterling's failure to break resistance at 1.50 in a week of particular dollar weakness must point to a weaker pound in the coming weeks.
usd/jpy moved in our direction with the dollar hitting 13-yaer lows against the yen on Friday. I expressed concern over possible Bank of Japan intervention which were not calmed when BoJ governor Masaaki Shirakawa said on Wednesday that he was watching the forex market carefully. By Friday the bank was playing down such speculation when Japanese finance minister, Shoichi Nakagawa said that the country wasn't considering intervention. usd/jpy fell 176 pips, that's +1.93%

This leaves our running total further diminished (but still in positive territory!) at +1.97%

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