Texas Trade Forex Report For the Week of 12-1-2014 thru 18-1-2014

Good Morning, Good Afternoon or Good Evening where ever you are in the world. This is the Sunday and Weekend Edition of Texas Trade Report reporting for the week of 12-1-2013 thru 18-1-2014. I am Liz S, your currency analyst for this edition. I will be talking about the EUR/JPY, AUD/USD, and NZD/USD currency pairs, gold and oil in these week report. This is sole focus of this report.  Before I can go any further, here is the risk disclaimer.

Risk Disclaimer:
  Trading Forex is a risky business and sometimes you will lose the money that you traded. You are leveraged 50:1 or even more. There is the risk of loss of the money have invested. Never invest money that you are not committed losing. There is a possibility of losing your original investment. If you are not sure about investing, seek the help of a registered investment adviser.

Also, the purpose of this trading lesson is education. This does not constitute trading advice. Nor do I give out trading signals. All opinions are my own and not Blogger.com nor Google.com.

EUR/JPY Daily Chart

Onto the focus of this week’s report, EUR/JPY is the first pair that I will be looking at for this report., we close at 142.08 on Friday and is at 142.35. the high on Friday. This pair had been trending up since the last part of October. Here are the fib levels. The key fib level for 23.6% are 129.823 and at the 38.2% fib level is 132.93. At the 50.0% fib level, it is 135.31. and at the 61.8% fib level 137.74. This pair was in a rising wedge last month. We are now seeing it break down. Draghi stated the EBC does intend to do more stimulus. However, we have the BOJ on tap wanting to continue their stimulus program. This has been hard to trade because of the actions of EBC and further actions by the BOJ. Now, we do see some progress on this pair. I do hold the view that this pair will hit 61.8% fib level. I do expect some pressure to the downside. Because technically we can see the actions of the BOJ and having the Yen very much oversold. You can see this on the weekly chart and the monthly chart. I am very firmly bearish at this point.

 

AUD/USD Daily Chart

Onto the AUD/USD, we close at 0.9000 on Friday and made a high of 0.9000 on Friday. This pair has been trending down for some time. Here are the fib levels. The key fib level for 23.6% is 0.9034 and at the 38.2% fib level is 0.9169. At the 50.0% fib level, it is 0.9281 and at the 61.8% fib level 0.9395. This has been oversold for some time.  The NFP did not help the USD gain traction as many had hoped. The sell-off in the USD was the product of poor NFP results. Investors were not convinced and sold it. There is on Thursday, 16 January the unemployment reports for Australia at 00:30 GMT. We should see to what extent the Australia economy is recovering or not. I am very convinced is this pair gaining traction for the short and medium term.

NZD/USD Daily Chart

Onto the NZD/USD, this pair has been trending upward of late and is currently trading at 0.8324. This pair made a high of 0.8303. The fib levels are for 23.6% at 0.7884 and 38.2% fib level at 0.8008 on the daily chart. At 50.0% fib level is 0.8109 and at 61.8% fib level at 0.8214. The Kiwi did follow the same path as the Aussie from the NFP report. We do see some continuation of this trend for a bit longer. I do expect that there will be time to digest the data and get a better picture. I am not expecting overall USD bullish yet. The last NFP report in December did show improvement. The 74K jobs that were created for the month of December does reflect the reality the US economy has not really recovered. We did see a lowering of unemployment to 6.7%. It is still too early at this point to say the US economy is recovering. The ADP report did not reflect a good measure of employment for this period. We did see the Kiwi rise because of the poor on Friday. I am still bullish on the Kiwi for the time being.

 

Gold Daily Chart

Onto gold, it is up about $3.50, which about +0.25%. It is currently trading at $1250.00. The fib levels on the daily chart are $1252.02 at the 23.6, $1268.13 at the 38.2% fib level, $1292.50 at the 50% level, at $1331.23 at 61.8 fib level on the daily chart. After dismal NFP results on Friday, it still does look bullish. It does appear that is trying piece the 38.2% fib level. My bias is that will break that level. It does appear that it will and hold above it We do see evidence that very strong right to suggest it. I do expect the downtrend we did see all of last to end soon. I am cautiously bullish for now.

Silver Daily Chart

Onto silver, it is currently trading at $20.16 and is down a little. It is not down by much. It is down by 0.27%. The key fib levels for silver at 50.0% at $20.94 and $21.45 at the 61.8 fib level on the daily chart.   We still see the consolidation pattern that it is locked at. It does want to break out of it. I do believe it happen. This pattern is not permanent. I am longer term bullish on silver.

 

Oil Daily Chart

Onto oil, it is currently trading at $92.67 a barrel and is down by 0.28 cents. It is not down a lot and is staying pretty much in the range of Friday’s trading. The fib levels for oil at 50.0% market are $97.96 per barrel and $99.44 at the 61.8 fib level on the daily chart.  With oil, I would have to see support hold. It could still pierce it. This is still short term possibility. I am very cautious oil. I am not ready to call a bottom on oil, yet. I am remaining neutral at this point on oil.

Clearly, we do see the market is pricing the parts of the taper. We can see it happening. The markets like S & P are still relatively overbought. It is starting to price in the taper and has the expectation of it happening. We saw in the past week BOE kept interest rates the same. EBC kept rates the same and left the door open for more dovish signs. The EBC is still expecting to continue their monetary policy of more stimulus. We can still it. NFP results did surprise a lot of analysts that had the expectation of better job numbers. We have to hold back our expectations so the reality does match them.  We do see low levels of volatility. The lower levels of volatility do send signal that we could be in greater levels of volatility. We can see the VIX showing this.  With this measure of low levels of risk, we can expect higher volume in the volatility later and use it as a sign of reversal.

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