Forex Trading: Eyes On USD/CHF And AUD/USD This Coming Week

Another solid week in the currency world in my opinion when you compare it to the violet swings of the US stock market and all that is going on in the financial world. We saw the $580 billion dollar Chinese bailout plan, the coming of the G20 meeting today in Brazil, and a proposed major bailout for US automakers. But how did the currency markets fair through all of this?

On the Menu Last Week

This week was a bit more calm than the previous week, which usually bodes better for long term traders. While the EUR/USD only ended with an 11 pip loss, the trading range was larger and created an indecisive doji candle. I’m not sure where this will be going for the next week, but it should be more apparent after the Sunday trading session. Here are the total pip movements for the majors:

Majors
• EUR/USD | -267 pips
• USD/JPY | -171 pips
• GBP/USD | -1089 pips
• USD/CHF | +218 pips
• AUD/USD | -368 pips
• USD/CAD | +579 pips

Looking at what the majors did during the week, one has to wonder when the beating of the GBP/USD is going to end. Folks, this is a brutal run for this pair, with a loss of -2812 pips since October 13th! Well for all of you who were short, make sure you buy the rest of us dinner if we ever meet. Looking at the technicals of this pair, the 1 day charts show that we could possibly see a short term bounce off of these lows, but I’m not convinced that the fundamentals will warrant much more than a dead cat bounce. In my mind, I’m not touching this play; at least until it figures out where it wants to go.

Next Week’s Specials

Here’s what I think will shape the coming week:

• USD/CHF will have trouble breaking 1.2000

At the end of the week, two huge bull candles for the USD/CHF were accompanied by a swift pull back from resistance seen at 1.2000 that was tested on Thursday. Look for a double top and a possible signal sent out by me for a quick pullback. If this pair is able to break this level, it is likely going to have to wait to push much higher because the 1 day charts are oversold. I really like the pullback at 1.2000.

• AUD/USD could trend down to 0.6340

Right now the AUD/USD pair is in a bit of a downward spiral. After retracting from a pseudo double-top on the 1hr candles on Thursday and Friday, two large bear candles immediately occured. Resistance levels are a big factor for this pair, and I see it sliding to 0.6340 where it will possibly form a triple-bottom from the November 12th and 13th levels. The perfect storm awaits us here.

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