On Friday, while equities gapped down, they did finish higher than their open (though still quite below Thursday’s close). Premarket, it looks like they’re up today (and USD is already down considerably today, JPY is showing some indecision). The market’s opening as I type this, so I’ll just take a beat, see what it’s actually doing this morning and if any of the currencies are correlated. At this point, I’m going to take the baskets at face value
USD [N] – I’m almost bearish here, but to say that right now would be a bit premature. It’s still somewhat in that high-base pattern, but Friday, it pushed above and below the highs/lows of the base, and today it’s pushed higher than the base (but not as high as Friday’s high) and lower than the base, pushing lower than Friday’s low. The difference between today and Friday, though is that today this is still looking weak, and Friday, price closed near the open (I’m not sure if it pushed higher or lower first). This looks like it could be running out of momentum, and heading down, which is why I was initially bearish, but since nothing is really confirmed yet (and it’s Monday) I’ll hold off on this
Today’s Pairs
EUR/GBP – Long
GBP/CHF – Short
CAD [N] – CAD is looking really weird right now. After a couple of large down-days last week, it finished the week technically up, but with some long shadows on either side. Today’s candle gapped down and also has very long shadows (though it’s upper shadow is longer), but is sitting near the open. This looks bearish to me, but it’s also not a candle formation I’ve seen very often. I’m going to wait a day or so on this to see what it does, and if it forms something more convincing in one direction or the other
EUR [L] – This was strong last week, it gapped up over the weekend, and seems to be holding on to that strength. I like this to the upside
GBP [S] – This is on it’s 4th down-day in a row, and while it is sitting at some support again, it’s pushed through the previous 2 levels that made up it’s base. I’d ideally like this to push through today’s lows before I was super convinced of the downtrend, but I still think I’d be comfortable shorting this
JPY [N] – 15 min. into the trading day, there’s a lot of indecision in equities, and that looks to be happening in JPY as well. That said, there appears to be a lot of strength behind JPY. On the other hand, while this is up today, it is so only slightly (sitting right near the open) and today’s candle has a long upper and lower wick. Actually, I’m going to hold off on this, too, until it has more confirmation of being bullish (I’ll have to revisit, and reanalyze if it turns bearish)
AUD [N] – While this has a lot of strength today, it’s still overall downtrending, and looking weak. I’m going to leave this alone for now until it either confirms a trend reversal, or continues to the downside
NZD [N] – Same as AUD
CHF [L] – This is still showing signs of strength, I’d be comfortable taking this long