eur/gbp's doji may well be signalling a pause.

Thursday looks like it's closing as a doji, perhaps signaling a correction for Friday. I'm raising my stop loss to 0.9200, meaning I'll be left with 150 pips in the bag if I get stopped out.

doji on eur; spinning tops for the franc and the yen; downside action for cable.

Last week's calls:
The week left eur/usd sporting a doji, a classic sign of uncertainty. Price never rose high enough to hit my trigger at 1.2850, though you could have tried shorting the gap at 1.2696. Wednesday's 01:00 long black saw the next 11 hours or so trade inside and going long on the upside breakout would have been a good move.
My swissy forecast fared well, my first short at 1.18 broke even, while the second took me all the way down to 1.15 as predicted.
I didn't catch usd/jpy on the way up from 97. But as I said in last week's call, I expected the pair to encounter strong resistance at 100 and I sold the buck on the breakdown of 99 on Thursday morning to close the position at 97.
Left cable alone last week when it failed to hit my target to short.

Patterns line up on the chunnel:
On an aside (charting rather than candles), I am watching for an upside breakout on eur/gbp at around 0.9000. The level has been offering strong resistance for weeks now (this is most clear on the day chart), while the pressure has been ratcheting up in the shape of an ascending triangle. Over on the pair's hourly chart, we've had a descending wedge forming since January and price is closing in and could test the wedges resistance soon. A true breakout of of both resistance lines will find me buying the euro against sterling with a target in the region of 500 pips. There's some background on how the Lloyds TSB bailout could make the upside breakout a more likely event here.
Charts to follow if requested.

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