Weekly Pairs in Focus – February 04 (Charts)

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EUR/USD shows support near 1.08; AUD/USD tests 0.65 support. Natural Gas stabilizes around $2.00. S&P 500 aims for 5000; USD/JPY and EUR/JPY rise, Gold fluctuates between $2000-$2075.

Weekly EURUSD

The Euro looks a little bit threatened at the moment, but the reality is that there is a lot of support just below current trading areas. The 1.08 level is an area where we will see a lot of noise, but even if we break down below there I believe that the 1.0750 level is also an area that comes into the picture as potential support. Rallies at this point could extend all the way to the 1.10 level, but I think it would take a pretty significant shift in attitude to get all the way to that invisible barrier.

Weekly AUD/USD

The Australian dollar initially tried to rally for the week, but really felt a hard blow on Friday as the jobs numbers in the United States were gangbusters. Because of this, we are threatening the 0.65 level, an area that I do think is significant support so it’ll be interesting to see if we can hang onto it. If we don’t, the Australian dollar almost certainly goes down to the 0.6350 level. On the upside, I think the 0.66 level is resistance, followed closely by the 0.67 level.

Weekly Natural Gas

Natural gas markets have been negative again this week, but the momentum is slowing down and as we are hanging around the crucial $2.00 level, I do think that there are some value hunters out there willing to get involved. Ultimately, this is a market that I think is trying to carve out a range for the year, perhaps with the $2.00 level offering support, with the $3.00 level above their offering significant resistance.

Weekly S&P 500

The S&P 500 initially fell a bit during the course of the trading week, only to turn around and rally again to price, new highs. At this point, I don’t think there’s any doubt that we are going to go looking to the 5000 level above. That obviously has a lot of psychology attached to it, and I think there would be a lot of profit-taking in that area. At any time between now and then, I think a short-term pullback offers a buying opportunity.

Weekly USD/JPY

The US dollar initially fell during the course of the week but has shot straight up in the air against the Japanese yen as the jobs number came out hotter than anticipated on Friday. At this point, it looks like the Federal Reserve will be cutting rates anytime in the next month or two, so you have to be cognizant of the fact that the market is probably paying attention to the Bank of Japan not being able to tighten monetary policy at the same time.

Weekly EUR/JPY

The Euro initially fell during the week against the Japanese yen, but has found enough support near the 159 yen level to turn things around and form a bit of a hammer. At this point, I think the Euro will continue to gain against the Japanese yen, not necessarily due to euro strength, but Japanese yen weakness. Ultimately, think this is a situation where you buy dips every time they occur, as the Japanese yen is not a currency people want to own. Furthermore, the 50-Week EMA has just broken above the ¥155 level, which will add even more support.

Weekly NASDAQ 100

The NASDAQ 100 has initially fallen during the week, but continues to plow higher. At this point, I think the NASDAQ 100 is trying to do everything it can to get to the 18,000 level, and the fact that Meta reported gangbusters earnings on Friday will of course help of the idea of the index going higher as it is not equal weighted. I think every time this market pull back, you have to be a buyer as there is so much momentum at the moment.

Weekly USD/CHF

The US dollar initially fell against the Swiss franc during the week but has turned around to show signs of life. This was aided by the Non-Farm Payroll numbers coming out much hotter than anticipated. Because of this, it looks like the Federal Reserve will be waiting to cut rates, and therefore, the US dollar has recovered against most things, with the Swiss franc being no exception. We are at extreme lows, but if we can break above the 0.8750 level, I think momentum will carry the US dollar to the 0.8860 region. Break down below the 0.85 level would be very negative for the dollar.

Weekly Gold

Gold markets rallied early in the week but then turned around to show signs of weakness. Ultimately, this is a market that I think is higher, but may have a bit of a fight on his hand. We are currently trading between the $2000 level on the bottom and the $2075 level on the top. Trade accordingly.

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