October 14th 2014. You may have noticed my recent interest in USDRUB. I am always looking for decent set-ups but this one seems to have wider implications. What will happen if a large Russian Corporate defaults on foreign currency debt because they not longer have enough Rubles? Given the latest exchange rate that is entirely possible. What will that do to the Dollar across the board, or Gold and the Swiss Franc for that matter? Food for thought!
EURUSD – 1.2790 is last week’s high. My bias is to buy for a swing trade on a one hour close above that level. Conversely a close below 1.2499 would set things up for further downside and toward multi-year support as per the graph in today’s webinar here.
USDCAD - Poised to challenge that 1.13? Maybe so however wait for it because with EURUSD poised to move higher that could create quite a headwind for the Loonie.
Gold – Multi-year support at $1180 has held firm for two weeks and last week’s candle was a higher high. This sets up the market for a continuation higher and I have been buying gold today. Key resistance is via the weekly descending trend line at $1318.00
USDJPY - Last week’s bearish engulfing candle sets us up for a continuation lower off multi-year highs. However I don’t see it getting too far lower and actually previous resistance at 105.50 now turns support and I would be using this pause in dollar strength to begin buying USDJPY. Ultimately these two central banks are going in opposite directions.
USDRUB – This market is caught up in all sorts of political difficulties however the trend is clearly for a weaker Russian currency. That said we have come a long way and this pair is now technically overbought weekly. While a position trader would look for opportunities to buy into weakness, I myself prefer the swing trade idea of selling this market on a weekly lower low as we come back down through RSI 70 and off the upper Bollinger Band. Last week’s low is 39.27. Be on alert for news of a default of a Russian corporate. That would give this market fresh upside momentum.
