Friday wrap...

MARKET NEWS

All eyes were on the Bank of Japan's Monetary Policy Statement released on Tuesday. With their decade long problem of an appreciating Yen hurting any type of growth prospects, the upcoming elections have created high levels of volatility. Opposition party leader Abe of the Liberal Democrat Party has repeatedly announced his party would intervene in the markets to a level surpass that off their last intervention three years ago. This coupled with their target of inflation of 2%, was welcomed by traders as they sold the Yen across the board. Elsewhere, markets were fairly subdued due to the US Thanksgiving Holiday on Thursday. Canadian Retail Sales came in worse than expected (0.1% actual vs 0.5% expected), however any moves were capped due to the US holiday and ceasefire in Gaza. The USDCAD's has high inverse correlation to Crude Oil and as such is affected by such events. Whilst the Euro has slowly edged higher on the back of a deal being done to release the next tranche of aid for Greece, gains were capped for the British Pound. This is due to poor Public Sector Net Borrowing figures (6.5B actual vs 4.1B expected) and comments from Bank of England's Weale stating: 'significant risk of economic contraction in Q4'. Euro saw an early rally on Friday morning, from better than expected German IFO Business Climate figures (101.4 actual vs 99.5 expected).

TOP 5 TRADES OF THE PAST WEEK

1. USDCAD High Test/Shooting Star Candle Short 19.11.2012 Resistance is found at 1.0040, the 50% retracement level from May's high to September lows. RSI divergence confirmed the bearish move. This trade is still running, currently up +0.5%

2. NZDUSD Ring Low Long 19.11.2012 Support is found at the 200dma, 61.8% fibonacci retracement and re-test of multi-month trend line from February highs. This trade is still running, currently up +0.75%

3. EURJPY Inside Bar/Harami Candle 21.11.2012 60m chart Support is found at the 50ema, daily pivot level and 61.8% fibonacci retracement. Continuation divergence confirmed the move higher resulting in +2%

4. S&P500 Bullish Engulfing Bar Long 19.11.2012 Support is found at 1350 with 61.8% fibonacci retracement from June's low to September's high and 1.618% fibonacci extension from September's low to high. This trade is still running, currently up +1.5%

5. McDonalds Corp Low Test/Hammer Candle 19.11.2012 Support is found at previous low 83.81 which coincides with 1.272 fibonacci extension from August low's to October high's. Price action and divergence confirmed the bullish move, which is currently up +1%

EFFECT OF THE NEWS LOOKING FORWARD

The macro themes mentioned last week are still in play but next week has a specific focus. Watch out for the UK GDP number on Tuesday, SNB Chairman Jordan's speech on Wednesday, US GDP on Thursday and Canadian GDP on Friday. Whilst any macro trends are unlikely to change from these announcements watch out for intra-day volatility. As always, follow price action as a leading indicator.