Market Forecast for 05-01-12

AUDUSD: I have been suggesting the currency pairs to trade would likely be the Aussie crosses. Today it is very much coming true, with the Aussie taking some heat on the sell side after house prices in Australia declined for a fifth consecutive quarter in the January-March period, while manufacturing activity fell precipitously in April. Sell the intraday rallies.

AUDCHF: The weakest Aussie match up is the Aussie-Swiss Franc. Our trading system is already short. Considering aggressively selling intraday rallies in this pair down to our price target of .9160, as long as the 1-hour and 240-minute trends are heading lower. See the chart below with the analysis.

audchf aussie swiss chart

EURUSD: Expect a breakout within 24 hours followed by a 2-3 day thrust on the Euro. Here are two trade recommendations with multiple price targets, followed by the Euro price chart with the forecast:

TRADE 1:  BUY 1.3260 stop to open, use 1.3190 stop loss, move stop to break-even point at a price of 1.3323.

Target 1 = 1.3380

Target 2 = 1.3580

TRADE 2:  SELL 1.3192 stop to open, use 1.3250 stop loss, move stop to break-even at 1.3114.

Target 1= 1.3010

Target 2 = 1.2960

eurusd euro daily chart

USDCHF: Dollar Swiss is in a very tight compression pattern (one of my favorites). Thus, we trade both upper and lower breakouts, with the upper breakout being slightly more risky. Consequently, consider these trade setups on this pair:

TRADE 1:  BUY at .9110 stop to open, use .9055 stop loss, move stop to break-even point at .9126.

Target 1 = .9187

Target 2 = .9245

TRADE 2:  SELL at .9060 stop to open, use .9110 stop loss, move stop to break even at .9009.

Target 1 = .8836

Target 2 = .8615

See the USDCHF chart below:

usdchf daily chart

Analysis of Other Markets

DJI (Dow Industrials): LONG, hit our 1/3 profit target, stop is at break even now.

Crude Oil and Gold are both wound up fairly tightly on the weekly charts, and as such, should have nice breakouts this week, or at the latest next week. As a result, be watching these  markets as well. With global economies rolling over to the downside, it's hard to imagine a major rally, but, we always must be prepared for the less than obvious, just in case. However, the sell side looks a bit juicier for now…

Please leave us your comments and feedback below.

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