Sunday, April 03, 2016

Currency: The Australian Dollar (FXA), American Dollar (UUP), Euro (FXE), Yen (FXY), and Yuan (CYB)

In an effort to improve the depth and quantity of content on The Danja Zown I have decided to add a new segment involving currency markets. Many of the same concepts and patterns will be seen however the narrative may often be different and a little harder to develop when compared to the stock market. 

Australian Dollar: FXA
The Dingo has had a fabulous run since the start of the year and I expect it to continue into the medium-term however near-term fundamentals and indicators are over-bought. An ascending bearish wedge has developed, possibly within another larger ascending bearish wedge, with the RSI(5) indicator putting in a sell signal.
American Dollar: UUP
The Buck has traded within a tight range for about a year now and once again we find ourselves at a common support area, $24.50. The tight range it has been in also looks to be putting in a descending channel which does not bode well for it's long term prospects. Near-term it appears to have put in a bullish declining wedge with upwards resistance at $25.00, $25.30, and $25.90. 
Euro: FXE
Some interesting things seem to be happening with the Euro. First, it may appear to be in a bearish ascending wedge but it doesn't look or feel likes it's going to retrace. The EMA's have crossed over bullishly and it appears like it's going to start pulling away. Several upwards resistance lines are seen at $112.00 and $113.00 so caution should be made, especially since the one at $112.00 has served as a long-term resistance line in the past. 
Japanese Yen: FXY
Not much can be said about the Yen except that a bullish flag has appeared right at the level of a huge gap down made back in November 2014. 
Chinese Yuan: CYB
Over the long-term an ascending triangle has appeared which has quite bullish implications, however near term CYB has come up to resistance at $25.20 going back to October and November of last year. We might see a retracement to around $24.10 before seeing it ascend again.