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EURUSD - holding on
The pair has had two downside rejections to break the weekly Kumo but yet upside price action has yet to become strong enough to make a case for a real reversal being attempted.  This could either be some profit taking in the short term before new positions build to the downside, or the bulls not really having enough strength to overwhelm the bears.

Either case, the pair remains in the Kumo so the picture will be a bit cloudy until we exit on either side.  The Tenkan suggests momentum is still down but slowed a bit and the Kijun has gone flat in the near term.  If they have their way, price should bounce around the Kumo but the pressure to the downside should still remain.  Watch for a weekly close below the Kumo and 1.3500 to strengthen shorts resolve.  A break above the 10ema will give bulls some short term hope.

GBPUSD - mixed salad but downside favored
Posting a mild gain last week, the pair has yet to produce any meaningful upside price action.  Last weeks gains were smaller than the last 11x the pair had a weekly gain so it suggests this is not due to bulls taking over by any means.  Its lackluster effort will need to be doubled before the bulls can gain some steam.  All the lines are relatively flat so their is no current momentum but the remaining downside inertia which will still have an effect on price.  The Kumo is week for the next month or so until April so it will not provide much of a challenge for either camp.  Its a mixed salad but more of the goodies appear to be towards downside plays.  Need more evidence this week to see where the bulls and bears hearts are.

AUDUSD - Impressive climb and now breaking above the 20ema
Forming an almost outside reversal bar, this is one of the pairs that may challenge USD strength.  Not surprising its a commodity pair and the AUD ta’ boot.

The pair held at the lows from two weeks ago and closed knocking on the 20ema’s door.  Since then it has virtually climbed today and is about to surpass the Tenkan line.  However, all three lines are flat so they are not offering too much of a fight for either camp and are remaining relatively neutral like Switzerland.  Should the pair close above all three lines, it could make a challenge for the 9300/9400 highs from 09′ and 10′.  However a close below the Kijun would challenge the previous lows just below .8600.  Need to see how the DOW does this week to see if the current strength will hold up.

USDCAD - Just not ready for higher levels
Close to making a case for some higher ground, the pair faltered last week and slammed below forming an evening star pattern of sorts but more importantly, last weeks losses took out the last two weeks of gains.  If the pair should continue to sell-off, we feel the next buy level will be just above 1.0200 which has held the last two attempts.  There is not much reason to be bullish in the short term but the bears appear to have some sort of near term control so its the only valid play out there - just not our favorite at current levels.  We’d rather be shorting closer to the 20ema so will wait for price to reach 1.0200 before we consider any real move.

NZDUSD - pulling up the rear
The underperformer for the commodity pairs, the kiwi reversed some of its losses for its first weekly gain in 4 weeks but it has yet to touch or breach the 20ema which is currently the lowest of the three lines which are currently all flat.  The pair appears to be caught up in a downward sloping channel which could be part of a bull flag in the larger scheme of things.  The pair has upside resistance in the three lines and the channel top so selling at the top of the channel seems the current viable option.  Not our favorite scenario so we will play the channel but this week has opened bullish as if it wants to challenge the 20ema.

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He has built Ichimoku Systems for Institutions and has an Advanced Ichimoku Course for further training.  For more information about his services or his company, visit http://2ndskiesforex.com

EURUSD - Only the Bottom of the Kumo
As stated last week;

The pair fell as expected to 1.3850 just 75pips above the weekly Kumo.  Although we feel the pair needs to correct a little bit, we ultimately feel any rallies are just opportunities to sell the pair higher.

Just as we wrote, the pair rallied to the big figure of 1.4000 and then dropped 350pips closed in the mid 1.36’s.  Posting its 4th weekly decline in a row, the pair only has the bottom of the Kumo to take out before a large drop should manifest.  Should we have a weekly close below the kumo, we are expecting a dive to the 1.2900 and longer term forecast could send the pair to 1.2400 by year end.  Outlook for the bulls on the EURUSD do not look good as the last bastion of Ichimoku support is the bottom of the kumo and beyond that the atmosphere is thin.

GBPUSD - Look out below…
Posting its largest weekly decline since sept. last year, the pair did two things which added to the bearish taste for the pair; 1) closed below the kumo for the first time in 6mos and 2) crashed below the major support at 1.5700 which was the last double bottom support for this pair in the last 10mos.  Ichimoku analysis suggests unless a rally happens in the next month or so, this pair could easily be headed for 1.4900 with 2nd targets at 1.4500 and possibly a full reversal of the 09′gains back to 1.3500.  Look out below as there is not much to help this pair.

AUDUSD - Cuidado as we are below the Kijun
For the first time since March of last year, we had our 1st weekly close below the Kijun.  We expect this along with the 20ema and Tenkan now to act as strong resistance so the line of least resistance has clearly formed to the downside and the bearish prospects have become attractive - especially with the RBA not raising rates last month and further concerns about inflation and a weakening labor market.  The kumo does not come in till about 8000 so there is plenty of room for this pair to drop.  Any rallies to the Kijun are likely good selling opportunities.

USDCAD - Working hard for its money
One of the few USD pairs having to work hard for its money, this pair had a doji week but nevertheless closed above the kijun and 20ema.  This week it used it as support and should it have a weekly close above 1.0800, we feel the pair could likely be headed towards 1.1250 which is where the Senkou Span A comes in (kumo bottom).  At that point it will have to work hard for its gains but for now, outlook is good for USDCAD bulls and as long as the dips are corrective in nature, the 20ema should hold as support for a good long base to form.

NZDUSD - Likely first to the weekly Kumo
With its 5th weekly down close and now 2nd below the Kijun, the pair is likely headed for further losses towards 6500 as it spiked up to the Kijun only to get smacked back down 300pips lower.  The 20ema has now gotten below the Tenkan and Kijun so this should reject any upside plays.  The line of least resistance is clearly to the downside and we would not feel good about buying this pair anytime soon.

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He has built Ichimoku Systems for Institutions and has an Advanced Ichimoku Course for further training.  For more information about his services or his company, visit http://2ndskiesforex.com

EURUSD - Kumo Below, but nothing special

As stated last week;
The problem for the EURUSD is more about a lack of support combined with clear lines of resistance.  This along with the Kumo now way below at 1.3770 suggests the first major attempts to support this pair will not come for another 275pips below or more.

The pair fell as expected to 1.3850 just 75pips above the weekly Kumo.  Although we feel the pair needs to correct a little bit, we ultimately feel any rallies are just opportunities to sell the pair higher.

For now, the lines of least resistance are still to the downside and with the pair posting its 2nd largest weekly decline in the last 9mos, we feel this selling pressure should continue till the end of Feb.

GBPUSD - About to be…
Who really wants to be buying the pound now?  We really cannot find any reason to buy it both technically or fundamentally.  From an Ichimoku perspective, the pair is threatening to spill out to the downside of the Kumo and we feel with the likely USD strength to come, the pair will eventually submit.  The Tenkan is diving like a shark smelling blood below and the 20ema is also resistance above so the line of least resistance is still to the downside.  Should the pair remain below the Kumo till early April, the prospects for a serious dive below 1.5300 becomes more likely as time goes on with the Kumo getting thick and strong to the downside with a flat bottom below at 1.5300.

Until then, the twisted thin Kumo does not offer much for support or resistance so we feel the lines will have the most influence over the pair.

AUDUSD - Only one more to go
Selling off about 250pips last week, closing towards the lows and breaking below the 20ema, the pair now only has one more major downside support-line and price to go before a strong fall can begin.  Opening off the Kijun (red line) the pair has found some strength and is checking the 20ema for legitimacy.  Should it break this, the Tenkan will come under threat so the pair is in between two opposing forces.  Unless the pair gets really strong this week, we feel another challenge of the Kijun will be in order this week or next.  Should the pair break this and the .8733 support base (previous bottom), then we feel the pair is headed south for a while, likely towards the Kumo top before finding any support which will likely not come in till .8250-ish.

USDCAD - Doing an About-Face
After having its 2nd largest weekly gain in the last 7mos, the pair closed above the 20ema and Kijun.  However, USD selling this week has brought the pair below both lines and we feel dips will likely find support at the Tenkan line.  This could where the bulls re-enter to make a second skirmish towards the 20ema and Kijun.  Should we have a 2nd weekly close above these lines, we feel technical buyers will come in to launch the pair up towards the Senkou Span A which should not come until after 1.1000.  We are liking dips on this pair as buying opportunities.

NZDUSD - Next to the EURO…
This pair looks like its in 2nd to last place against the USD with only the EURUSD looking worse.  Why?  The pair has sold off for 3 straight weeks but just closed below the Kijun and 20ema for the first time in over 6mos.  Now all three lines will act as resistance so the line of least resistance is clearly to the downside.  Ultimately, unless the .6969 support base holds (should the pair fall further), we feel the pair is headed for a much lower value, possibly to .6500 before finding any major buyers.  There have been some bullish statements by Bollard (Head of RBNZ) which may give the pair a lift but we feel it has more work finding higher ground than lower pasteurs.  The only thing which would change our bearish view is a weekly close above the Tenkan.

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He has built Ichimoku Systems for Institutions and has an Advanced Ichimoku Course for further training.  For more information about his services or his company, visit http://2ndskiesforex.com

EURUSD
Showing an inability to have a weekly close above the 1.5000 barrier, the pair has had now 4 rejections on a weekly basis here.  We feel this week or next is the decider for the next leg on this pair.  A close above 1.5000 increases prospects for a year end push while a close below the weekly Tenkan (has not happened since April) would likely send the pair towards the 20ema just above 1.4500 where a decent base resides just below.  The Kijun is climbing fast which will also come to support the 20ema if price should fall.  The Tenkan is current flat and on par with the current price which has trotted in place with only feints to the upside but nothing connecting on the chin.

We feel if you want an aggressive long, a touch of the weekly Kijun is workable or a sell just above 1.5000 but we are waiting to see the pair show the next card in its hand.  We like the close below the weekly Tenkan because this would likely result in a stronger price move down since the bulls have been in control for some time.  Taking out stops has always produced stronger price fluctuations than profit taking and the majority of stops are building below the Tenkan and 20ema as most of the barriers and shorts at 1.5000 have been taken out for now.

GBPUSD
Coming off a three week climb, the pair was working an honest effort to break above the weekly Kumo only to get rejected and close down 360pips from the high and about 200pips from the open.  Ironically, the last time the pair attempted and pierced the weekly Kumo, it was also coming off a three week climb ending up in failure.  There is hope for the bulls as the Kijun is just below at 1.6373 while the Tenkan and 20ema hover just below at 1.6272 so there is a lot of tough hurdles for the bears to clear before they could wrestle control since there is both a price base and Tenkan/20ema/Kijun supports just below in the 1.6300 region.  Should the pair eclipse these major hurdles, we would likely see a strong unwinding of price taking on 1.6000 and the summer lows of 1.5700 which launching price upward 1100pips in 5 weeks.

The Kumo is rather thick so a clearing on both sides in this year could set the tone for next year but the cloud gets increasingly more complex, twisted and contracted in the first months of 2010 so unless the pair makes up its mind soon, we expect a complex and inconsistent directional structure to start off the year with direction only getting more clear around April or May.  Light longs can be attempted around the low 1.6300’s with stops just below 1.6200 and targets set to 1.65 and 1.68 while moderate sells just above 1.6875 with stops above 1.7050 targeting the 1.6500 region.

AUDUSD
Forming its first outside reversal and bearish engulfing pattern for the 2nd time this year, we are expecting two scenarios for this week; 1) a violent sell off first being tested by the weekly Tenkan, or 2) a mild retracement back towards the highs.  If scenario 1 happens, the pair will have to close below the all important Tenkan line - something only done 1x since March of this year.  If it were to do this, we feel price would fall rapidly as the first layers of the long term bulls would be reducing positions.  From here, there is about a 75% chance price would touch the 20ema before testing the real resolve of the bulls.  Any close below this leaves only the archers at the walls for defense - meaning theKijun will have to do most of the work.  The good thing is the 50% fib level of the last swing up (from 7700 - 9400) resides here so if bulls wanted to add on to their positions for a cheaper AUD, this would be a good place to do it.  Beyond this, we feel price would fall until it reached the Kumo where we feel price will likely find support and start to build another run up in 2010.  We actually hope the AUD gets this cheap as we’d love to buy around 8000 using the kumo for support to run prices up to 8754 before taking a short breather before going for 9400 and possibly parity next year.  Any rate hikes would likely put some wind in the sails but don’t expect the RBA to increase rates in Dec. as they’ve already stated this is not a likely option.

USDCAD
Forming a piercing pattern last week, the pair found support at last weeks lows and used that to climb for pretty much the entire week.  We feel this short term momentum will likely see the pair this week gun for another attempt at the stifling weekly 20ema which has kept price under water since April this year over 1300pips ago.  Every major approach or testing of it has resulted in price selling off a minimum of 450+ pips each time so anyone thinking of going short on this pair has their location.  Be cautioned as momentum has been diverging for some time now and looks like its priming for an upmove and possible break of the 20ema.  If this were to happen, the last upside test would likely be the Kijun but beyond that, there is smooth sailing for this pair up till 1.1500.  We expect a mild dip in price for this week, likely in the first few days of trading but then for price to climb and make an attempt to take out the 20ema.

One important technical event to note is on the daily time compression.  The pair has had its first daily close above the Kumo in over 7 months.  The combination of the flat top plus the break could spur some technical buying if the flat top does gravitate price back towards it.  If it does and price still closes above it or at it, we feel this could be another buying opportunity and springboard for a decent upside leg for the pair.

NZDUSD
Once the strongest against the USD, now looking like the first to go, the pair failed at making a same or higher high and actually failed quite miserably 110h shy of the yearly highs to produce its 3nd largest weekly sell-off since January of this year.  The 2nd largest sell-off for the year was only 4 weeks ago.  With the pair now having its 3rd close below the weekly Tenkan, we feel the short term support between 7086 - 7158 will be under pressure soon.  There may be a mild pull back early in the week but ultimately we feel the pair should be finding lower ground soon and testing the short term base.  The 20ema is currently clocking in around 7000 which would be an interesting place to add longs but the momentum is showing signs of failure like it wants to take this pair down.  Any breaks and closes below the 20ema or Kijun would likely result in a sell-off towards the 6300 region before finding any major support for the pair.  7000 and 6900 offer a good support zone but we feel beyond this the 61.8% fib would not offer much of a fight to prop up the current bull run.

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in  using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He is considered to be at the cutting edge of Ichimoku analysis along with building trading systems and Risk Reduction in trading applications. For more information about his services or his company, visit http://2ndskiesforex.com

EURUSD
The armor has been dented.  The first signs of damage to the upward assault have been marked on the shield and the first wound delivered.  Why?

Since the pair broke above the weekly 20ema and the Kumo, there has not been one weekly loss this heavy on a closing basis.  On top of that, in the last 33 weeks, we’ve only had two other closes (on a weekly basis) this strong or more.  On top of this, in comparison to the other two candles of this magnitude, this one opened closer to its high and closed closer to its low so the selling pressure this week was most consistent.

Does this mean I want to be short EURUSD yet?  Not necessarily.  Being long USD is not my favorite prospect at the moment and needs more confirmation.  Am I open to being short now?  Yes, with more confirmation since the armor has been weakened.

Some options for shorting would either be towards the previous yearly highs or on a weekly close below the Tenkan (has not happened in 27 weeks).  Options for going long would be on a bounce off the weekly Tenkan or on the 20ema.

Overall Kumo structure suggests medium to long term the trend should remain up.  But there the price action suggests a short term correction could be underway.  Be warned as overall prospects for being bullish are not as golden as they were before.

GBPUSD
The picture for this pair did not get any clearer after last weeks close.  If anything, it made it more annoying as it posted an inside week.  The good thing about this is probabilities suggest this week will be an outside one.  Themalo thing about this is the direction of which the break will occur is less clear from the price action.  The Tenkan, 20ema and Kijun are coming closer suggesting decision has yet ot really manifest itself so building heavy positions is not recommended until we have a solid break, particularly above 1.6750ish or below 1.6200.

Price is still inside the kumo and if we do not get a close outside of it on either side by year end, the beginning of the next year should get messy till early summer.  Overall, until a break of the aforementioned levels, we recommend shorter day trades on this while not holding any positions beyond an intraday session.

AUDUSD
The outlook on this pair is similar than the EURUSD except the pair had its strongest open-close loss in the last 33 weeks so the stakes areup’d a bit.  The pair has found buyers at the weekly Tenkan so this should inspire bulls for now.  Pero, another failure at the yearly top made two weeks ago, or at a fib level from that top (.9326) to the current tenkan reading would strengthen the bears claws.

Our strategy for this is the same as the EURUSD on both sides of the market along with the overall medium/longer term outlook.  The only thing which would change our long term view would be a weekly close below theKumo but we place this at about a <20% chance of happening and feel overall any strong dips are opportunities to buy AUDUSD for another run up to an eventual parity which we feel will happen in 1st or 2nd Q of 2010 since the overall weekly kumo is building over time.

USDCAD
Producing back to back weekly gains - something it has done only 3x in the last 34 weeks the next test for the bulls is the weekly 20ema, an entity which strongly rejected it the last time.  The difference this time is a major fib for the swing move down from 1.3000 was right there at the 20ema when it happened.  On top of this, the weekly advance prior to attacking the 20ema the last time was smaller in nature than the current week that just closed suggesting there is more power behind this move than the last.  This is also represented mathematically in the last major attack on the 20ema was 580pips over 4weeks while this last advance was roughly 580 pips over two weeks - an important fact to be considered.

One other important note was the kumo wherein last time it was much thicker and in the zone of the 20ema whereas now its further away from price (less of a threat) and thinner in nature so a reversal is much more likely to happen now than ever.  If it does not break the kumo to the upside between now and end of March next year, chances for bulls to establish control weaken.

NZDUSD
The funny thing about last week was that the pairs that were doing the best against the USD suffered the most while the pairs doing the worst endured the least amount of torture.  Not really funny as it makes sense from an order flow perspective, pero - the kiwi really took one on the chin uppercut style.  In fact, it was the only trending pair which closed below the weekly tenkan which is the most damaging to the bulls technically.  So far, the pair has now treated the tenkan as resistance while making modest gains.  If the current model plays itself out with the pairs that had done the best against the USD are now going to fare the worst, the kiwi is in for a larger fall.

Downside tests are the 20ema, something not seen since the first week in may so any test if this should be very interesting with a close below likely resulting in a drastic and quick fall to the kijun causing a technical event to force bulls to exit most of their positions.  Overall, we feel the medium to longer term bullish structure is in place as the kumo is lo mismo to the AUDUSD and supports an upside advance as long as no weekly close below the kumo happens between now and early March 2010.  Dips that travel to the south will likely return north for an attack upon 82 cents (the high from 2008).

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in the technical aspects of trading particularly using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He is considered to be at the cutting edge of Technical Analysis and is well regarded for his Ichimoku Analysis, along with building trading systems and Risk Reduction in trading applications. For more information about his services or his company, visit http://2ndskiesforex.com

EURUSD

Threatening to take out the 2009 highs (only 3 weeks ago so not that dramatic), the EURUSD is nothing but bullish as it remains above the Tenkan and has not posted a close below the line on the weekly charts since late April this year. The only way you do that is with continual steady buying for the pair. Dips have been minor and the bears have at best posted two weeks of declines in a row while bulls have been winning the fight once it cleared the Kumo. The challenging part about this pair is on a weekly basis, there are wicks on both sides of the fence so dips and rejections are all over the place. Anyone holding the pair more than a day is likely to get whipsawed so for medium term swing players, buying on a dip during the week or for sellers, selling on a rejection is your best bet however with the overall play above the Tenkan line being so consistent, bears have probably been vomiting losses like the girl in exorcist (the original) so unless you got the stomach for it (or vomiting losses), we suggest buying.

If the technical tooth fairy comes, then a dip or pong off the Tenkan is the play. Breaks have only worked out 2 weeks out of the last 24 so the Vegas odds are not in your favor buying breaks.

GBPUSD
Selling off for the last 4 weeks on a closing basis, again more downside is envisioned (without the use of a crystal ball) should the pair break the weekly Kijun (red line). If that happens, we expect technical selling on the pair to increase and like selling off the 20ema as a rejection play (weekly chart).

As time goes on, the GBPUSD is getting replaced by the EURUSD 2.0 which is outpacing it in beating up the USD. In fact, the GBP and USD are in an almost deadlock as to who is going to win this contest of horns. Ultimately, we do not favor the USD against much, except perhaps the Iraqi Dinar and the Indian Rupee for the rest of this year, but I digress.

Getting back to the Ichimoku, the lines are becoming more flat and compressed but still sloping downward showing the pressure to the downside has not abated. The flat Kumo top could act as the rear guard for this pair should it break the 20ema and Tenkan to the upside. Another failed attempt here would intimate the pair will likely head back down and stay inside the cloud for the remainder of the year. The Kumo has a thick hide so should a break and close occur on either side, we expect the following move to be strong.

Based on this kumo formation, we would be surprised if the pair breaks the 1.6850 (kumo top) to 1.45 range for the rest of the year. If I were a betting man (only am in Vegas - blackjack or roulette), then I’d lay more chips on this pair breaking the lower belly of the kumo. Regardless, for this week you have the key levels to watch.

AUDUSD
A simpleton these days, the AUDUSD has been relentless in its attack on the greenback climbing 15 of the last 23 weeks (65.7% kill ratio) and only posting one close below the Tenkan in the same amount of time. Anyone looking to sell this pair at any time soon should be questioned to see if they recently suffered any head trauma or were hit by a truck. The pair has only mounted a total of 8 selling weeks since the uptrend started back in march (32weeks ago) and has climbed for a consecutive 8.5months (including this month). How could you not be making money on this trend?

Since we have quickly concluded with any selling notions, the question comes as to where/how to buy into this trend. Options:

1) dips to the 20ema (daily chart)

2) touch of the tenkan (weekly chart)

3) any weekly retracement to the 38.2% or 50% fibs of the prior weeks price action with stops below the previous weekly lows (a strategy that has worked 9 out of 11x)

Kumo formations like this suggest continued uptrend and likely for the rest of the year.

As long as the tenkan/20ema/kijun lines hold this relative structure, the AUD will keep punishing the USD. Add in the surprise rate hike by the RBA and you have all the spices for more upside.

USDCAD
Finally doing something interesting, the pair broke below the slow downward dribble it was in and in one week, posted its largest open/close drop since July while taking out barriers at 1.0500. Although the Momentum is wanting to disagree with this downtrend, we do not see much reprieve for bulls until a close above the 20ema (weekly charts) prints. In fact, any attacks at the 20ema (as long as they are engulfing the previous candle) could be treated as a rejection play for more downside.

The kumo is sloping downward at an aggressive angle and unless this pair starts to ravage the upside (which we put those odds around the same as getting hit by lightning twice, or the Chicago Cubs winning a World Series in the next 3 years – no offense to Cubs fans, I’m from Chicago and would love them to win, just being realistic), then the pair should likely close below 1.1500 for the year and the 1Q outlook for this pair suggests bulls will have a tough time making any headway until mid 2010.

Riddle me this: Which pair has climbed for the last 12 out of 13 weeks against the USD?
If you answered with an Antipodean pair like the NZDUSD, you guessed right. Yep, 12 out of 13 weeks. Not even Tiger Woods has won that many tournaments in a row. Under the radar while the AUDUSD has been making all the headlines, this pair has posted an impressive 25 out of 33 weekly up-closes and only lost ground 4 weeks in the last 20. The trend is so strong it cannot even touch its twinkle-toes on the Tenkan line. In fact, it has not touched it since July 17^th (ironically my birthday) which is awefully impressive. Unless someone comes in with a Trump size account, we could not be paid to sell this pair for any ransom.

This is one of the few pairs where buying on breaks has worked out as long as you can hold till the end of the week. Buying on the weekly open has also worked well (remember the 12/13 stat?) but small to medium retracements have been offered every week save 2 in the last 13 so we’ll look for the dip as a buying opportunity. Unless this pair runs into King Leonidus and the Spartans at Thermopylae, this trend should continue rolling.

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Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in the technical aspects of trading particularly using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He is considered to be at the cutting edge of Technical Analysis and is well regarded for his Ichimoku Analysis, along with building trading systems and Risk Reduction in trading applications. For more information about his services or his company, visit http://2ndskiesforex.com

In case you were kidnapped, heavily inebriated or on prescription drugs for the last, oh say 33 weeks, the AUDUSD has been in an uptrend.  On top of that, they recently did something no other central bank has done lately - raise their interest rates.  This has separated them from the rest of them and added nitro to the trend.  But, the question has to be asked, is there more to this uptrend?  If so, should be buying into the rest of the week now that we have hit hump day?

Statistically speaking - No!

Lets get into the numbers which suggest why we should not be buying.

Since March 6th of this year, the pair has had 31 weeks of price action behind it

7 losers

24 winners

Do we want to be buying as our general approach to the AUDUSD?
Verdict = Yes

Average weekly range (high to low) for those 31 weeks = 341pips

High value = 452

Low value = 135

# of weeks it has closed above the 341 avg. = 20 (65%)
Current weekly range = 314pips

Difference to the avg. = 27pips

Difference to the High = 138pips
Thus, if we were to this week hit or equal the weekly high, there is a potential for 138pips of profit…not bad, but downside risk is well over 200pips.

What is more interesting is how price has been behaving as of late.  Thus, we present exhibit A which is the weekly chart on the AUDUSD

Notice how the pair has behaved in the beginning of the uptrend.  The candles were closer towards the highs and much larger in high/low range.
However as of late, the closes have been much closer to the opens with the open/close gains being smaller (current week excluded).  Also, there are

wicks or retracements on every single week (except one on sept. 11th week) since the week ending July 31st (over 9 weeks ago).  Thus, statistically,

88% of the time the pair has retraced on any given week suggesting waiting for a pullback before entering has been the way to play.

Now take a look at exhibit B, a graphical representation of how many pips the pair has averaged (weekly basis) outside or above the 341pip avg. and how much below.

The weeks of the trend are from left to right with week 1 being March 6th.  The numbers on the y-axis represent in 10s of pips (.001 = 10 pips) how many pips the

week was able to post above the the statistical average.

Notice in the beginning of the chart, the line is above 0, showing the pair was producing weekly ranges .002 (20pips) outside the weekly average range from high to low.

Not surprising as the trend has some good power once it clears the weekly 20ema.  However, notice how the line falls off and on a week to week basis, the ranges have been getting

smaller suggesting the trend is losing steam.  Not necessarily that its changing, but just that we should expect to make less on a weekly basis out of the pair, particularly on an open to

closing basis.  Important to know.

Thus, considering that only out of 24 positive weekly closes, none of them since July 17th have closed above the weekly average (341pips) and the current week has already moved 314pips,

do we really want to be adding on large positions around the current levels on the AUDUSD?

Verdict = No

Solution = statistics say wait for a pullback before buying.

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in the technical aspects of trading particularly using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He is considered to be at the cutting edge of Technical Analysis and is well regarded for his Ichimoku Analysis, along with building trading systems and Risk Reduction in trading applications. For more information about his services or his company, visit http://2ndskiesforex.com