Strategy: Bullish against 0.8683, Targeting 0.9350
The bullish engulfing candle on the weekly charts flashes a strong buy signal for the AUD/USD. This represents a major shift in trend and tells me that we could head back to the currency pair’s multi-decade high of 0.9400. My trading buddies who follow fundamentals say that Australia has been reporting strong economic numbers which backs my call for further gains.
Find out where the Candlestick Warrior thinks currencies are headed this week.
Let me know what you think my analysis on the Candlestick forum, which I will be monitoring from time to time.
Strategy: Flat.
The candlestick outlook for the EURUSD is unclear. On the weekly chart, which is shown below, there is a potential hammer, but this is the third week of the advance and the two candlesticks show weakening upside drive. The daily charts show a strong bullish engulfing candle formed this past Thursday. The relatively small body of the Friday candle indicates that for the time being, the EUR/USD is holding onto its strength. Therefore I’m flat on the EUR/USD and will update the pattern next week if a more constructive opportunity reveals itself.
Strategy: Cautiously bullish GBP/USD against 1.9483, targeting 1.9766
The GBPUSD continues to decline strongly through recent trade, but GBP bulls can see a glimmer of hope on a makeshift daily hammer candlestick. The bullish reversal pattern signals that we could see GBPUSD rallies in the days ahead, and gives us reason to get long the currency pair. A more recent GBP pullback gives me pause, but I think that the recent selloff has grown a bit too extreme and we may see a worthwhile rally before new lows.
Strategy: Flat.
The candlestick outlook for the USDCHF is somewhat mixed, but it seems as though the weekly candle will close as an inverted hammer after several weeks of sizeable declines—a signal that price could reverse through the near-term. I hesitate to advocate a bullish position after such a strongly bearish engulfing candle just a week ago and prefer to stay to the sidelines on the USDCHF; price has fallen far too fast to make for an attractive short, but the long likewise looks perilous.
Strategy: Cautiously bullish USD/JPY against 108.39, target 110.13
The USDJPY continues to tumble, but its hold of a key price floor at 108.00 and an inverted hammer on the weekly chart suggest that there could be a short-term rally. As such, I’m cautiously bullish the pair, but will be watching for any close below the 108.39 mark. This is somewhat of a “punt” trade, but it seems as though increasingly overstretched Yen bullishness will show signs of waning in the week ahead—providing an optimal opportunity to go long the USD against the JPY. Longer-term, however, the prognosis remains bearish for the pair.
Strategy: Bullish against 0.9757, Target to be Determined
USDCAD has finally shown willingness to rally after remaining relatively rangebound through the past several weeks of trading, and the current candle formation is flashing a solid buy opportunity. After a strongly bullish engulfing candle in November, the USDCAD subsequently saw a doji through December and remains solidly positive to start 2008. Though I don’t like to admit it, I will look at trendlines from time to time as well, and the USDCAD’s break of a multi-month downtrend certainly reinforces my bullishness.
Strategy: Bullish against 0.8683, Targeting 0.9350
The bullish engulfing candle on the weekly charts flashes a strong buy signal for the AUD/USD. This represents a major shift in trend and tells me that we could head back to the currency pair’s multi-decade high of 0.9400. My trading buddies who follow fundamentals say that Australia has been reporting strong economic numbers which backs my call for further gains.
Strategy: Cautiously bullish against 0.7600, Targeting 0.8100
Like the AUD/USD, on the weekly charts, there is a nice long green body in the NZD/USD. I’m not as bullish the NZD/USD as I am the AUD/USD because in the AUD/USD, we are coming off 3 months of weakness. The NZD/USD however has been stuck in a range since November.
