Kiwi Dollars

A$ on track to dip below parity with New Zealand

By Stephan Cauchi

The Australian dollar is on the verge of a historic low against the New Zealand dollar and could even go below parity next year, according to foreign exchange broker ThinkForex.

Currently, one Australian dollar buys $1.049 New Zealand dollars – just above the $1.042 low reached in 2006.

“The currencies have always traded above parity since being floated so this will be an historic event,” said ThinkForex senior market analyst Matt Simpson.

The Aussie hold above parity was looking “increasingly tenuous,” he said.

View original post on Sydney Morning Herald

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USING FX FUTURES CHARTS TO ANALYSE THE FOREX MARKETS

If you’re short of time or struggle to analyse 30+ Forex Markets regularly then here is a way to quickly filter through to the high probability charts. By using Currency Futures charts we can very quickly look for relative strength of Currencies to help pair the strong against the weak. We can do so by using traditional Technical Analysis to identify trends, patterns or even trade signals, before pairing the strongest currencies with the weakest. The free www.finviz.com charts below consist of daily: AUD, CAD, CHF, EUR, GBP, JPY, NZD, USD.

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USDCHF – Swing Trade

– A potential short swing trade has been filtered today on USDCHF
– The set-up is almost identical to the GBPCHF trade posted recently.
– A Spinning Top Doji has formed at the descending trendline, 61.8% retracement level and 261.8% expansion level
– An alternative scenario is for a bullish falling wedge pattern to be forming, but this could still allow for losses before the pattern completes (and would require a swing high to be broken to confirm)
– Entry beneath the low of today’s candle, stop above the trendline and 1st target the swing lows (or beyond… see how price develops)

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GBPAUD – Swing Trade

– This swing trade will (hopefully) be short and sweet, although quite risky as we’re trading within a range
– The main reason for the trade is the bearish engulfing pattern and swing trade pattern – so I’ll be targeting the 1.46 area to take a quick profit
– To increase the reward/risk ratio I’ll set up a sell-limit order around the 38.2% fibs level (from the daily range)
– I risk not getting filled at all, but if I entered beneath the low of the candle it would only be a 1:1 which I’ve never been comfortable with anyway
– Although all charts agree to being bearish they leave a lot of room for any price gains before changing to a more bullish view – if in doubt, go without!
* Swing Trade rules have been taken from Marc Rivalland on Swing Trading where he combines Dow theory with his modified Gann Swing chart.

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$INDEX – Rolling Correlations

Out of curiosity I’ve compared the $Index against several markets to see current and past correlations between them.
2 things I notice about these correlations:
– How cyclical they appear – so there do seem to be cycles present between which markets correlate
– How the Euro (despite accounting for 60% of $Index weightings) still oscillates between being correlated, uncorrelated, inverted and back again.

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AUDUSD – Re-Entry

I’m currently long on AUDUSD and questioning whether to close my position after a day of consolidating.
– Overall I’m still bullish as I cannot see any concerning bearish divergences forming on RSI
– However RSI does seem to have formed cycle peaks on several timeframes so it is making me consider a pullback
– If a pullback is to occur I have included potential stalling points where I will consider ‘buying dips’
– The resistance area is clearly around 1.038-39 but if broken we may possibly retest the high around 1.07              
So I’m favouring buying any dips, or resetting my entry to enter above the 1.039 area with my stop beneath the congestion zone – whichever happens first! 
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“Trade what you see, not what you think…”

Follow @cLeverEdge

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AUDNZD vs Copper

Comparing Copper ETF to AUDNZD suggests Copper could be a viable leading indicator for this Commodity FX pair on a longer-term basis (weeks or months). The lead time varies between 1-3 months but so far has produced 3 reliable signals, warning of a trend reversal or continuation on AUDNZD. Also interesting to note is the correlation between Copper and AUDNZD as being generally low (between 0 and 0.4) so these 2 markets could even be traded alongside each other without worrying too much about the markets mirroring each other on a longer-term basis.

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TRADE: AUDNZD

By monitoring 3 crosses you can start to build up a game plan
AUDNZD has been forming a pennant/flag for a few weeks now which once confirmed is a continuation pattern.
For extra confluences we can look at other AUD/NZD crosses…
– GBPAUD has hit a resistance level –  if this hold then this confirms weakness on GBP and strength to AUD
– GBPNZD I’m still long on this after taking partial profit to let the trade ride. However a retracement is likely after an extended daily bar which also hints at GBP weakness (short-term) but overall NZD is weaker than AUD and NZD. This provides a clue to take AUDNZD long if it confirms the pennant.

USDCHF

FOREX: USDCHF

USDCHF weekly chart produced  a bearish engulfing candle and recent gains were rejected around a fibonacci cluster.

I’m currently short on this pair and posted a set-up recently on the TradeSecret forum and will continue to short any pullbacks.

The daily candle on Friday produced a hammer (bullish) so I expect a retracement before losses resume to test historical lows… and possibly beyond!

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“Trade what you see, not what you think…”

Follow @cLeverEdge