FOREX TRADING

Daily Technical Analysis

EURUSD

Yesterday I said that EURUSD need a consistent move above 1.5150 resistance area to continue bullish towards 1.5300. The fact was, price never got higher than 1.5150 and bullish momentum was rejected. I was right at this point until price unexpectedly made further bearish momentum, fell below 1.5062, bottomed at 1.4959 and closed at 1.5006. I have to admit and realize that my technical study was completely a mess. After broke above 1.5062 and topped at 1.5143 on Wednesday, I thought a movement towards 1.5300 should not be that hard. Well, my 1.5150 bullish target area was easily hit, but my second bullish target around 1.5300 was not. Technically the bias reverse to bearish, especially in nearest term with 1.4920 support area to be tested. Break below that support level should trigger further bearish momentum towards 1.4850/20 area, but as long as the bullish trendline support hold (see h4 chart below), the bullish scenario in longer term remains intact, especially if price able to break above 1.5062 today, testing 1.5150 area once again. Note that bearish reversal scenario warning is now can not be ignored especially if we have further bearish below 1.4820 with 1.4625 and 1.4450 as technical target. I think I will stand aside for now as situation is very tricky, but probably consider about open long position if price move near trendline support area or 1.4850/20 area today with tight stop loss.

On fundamental point of view, the risk aversion came back into play yesterday. Bloomberg reported that Dubai World proposal to delay debts payment shook investor’s confidence. Stocks in Asia, US and Europe dropped significantly while Yen and Dollar benefited from this situation. Well, I think it’s the time that we should not be too optimistic about global economic recovery. It’s true that we have some significant improvement and have good reasons to be optimistic, but things are just still far from being stable and investor’s panic selling on Dubai World debts payment delay prove that. The Japanese Yen is the most currency appreciated in this situation, lead ‘safe heaven’ currencies strengthen. However, I am concern about possible intervention by Japanese government to weaken the Yen as traders may respond to it thus potentially wane the Yen and Dollar rally.

GBPUSD

CCI warning about potential downside pullback was proved to be a fact yesterday. However, I must admit that the bearish pullback was much stronger than I had expected. Price fell significantly, break below 1.6600, bottomed at 1.6466 and closed at 1.6497. On h4 chart below, the trendline support (red) which did a good job prevented further bearish pressure and brought price peaked at 1.6744 on Wednesday was broken yesterday indicating potential technical bearish targeting 1.6250 area. The bias is bearish in nearest term at least targeting 1.6330 area but direction is unclear for me in longer term. The situation can be very tricky so do not rush jumping into the market. Immediate resistance at 1.6550 area. Break above that area should trigger further bullish momentum.

USDJPY

As I had expected, the USDJPY continued its bearish momentum yesterday, bottomed at 86.28 and closed at 86.39. Earlier today in Asian session, the pair attempted to push lower, bottomed at 84.79 but concern about Japanese government intervention brought the pair higher around 85.95 at the time I wrote this comment. On my h4 chart below, we have a hammer candlestick formation which potentially lead to bullish reversal, or at least correction as traders may respond further to possible intervention by Japanese government to bring the Yen weaker. I think I will stand aside for now.

USDCHF

The USDCHF failed to stay below 1.0000 area yesterday, topped at 1.0068 and closed at 1.0031. On h4 chart below we can see that price retreat to the upside and now above my trendline resistance (aqua, now support). This fact lead me to no trading zone area and we better stay away from the market for now. Another movement below the trendline should trigger further bearish pressure re-testing 1.0000 while consistent move above that trendline should trigger further bullish correction towards 1.0207 area.

AUDUSD

My technical study was completely a mess yesterday. As you can see on my h4 chart below, price fell significantly, violated my bullish channel, bottomed at 0.9092 and closed at 0.9122. Earlier today in Asian market price attempted to push lower, bottomed at 0.8916 but further bearish pressure was rejected so far as price whipsawed higher around 0.9035 at the time I wrote this comment. We have a hammer candlestick formation on h4 chart suggesting potential upside correction testing 0.9123 (today’s high), but I prefer to stand aside for now. We seems to have some chaos and panic on fundamental side as stock market dropped on Dubai World proposal to delay debts payment shook investor’s confidence. It’s a perfect time to watch and learn, but a bad time to enter the market

GBPJPY

The GBPJPY continued its bearish momentum yesterday, hit my short target at 146.40, even much further, bottomed at 142.45 and closed at 142.54. Earlier today in Asian session, the pair attempted to push lower, bottomed at 139.27 but concern about possible intervention by Japanese government brought the pair higher around 141.11 at the time I wrote this comment. While technical outlook remains slightly bearish, we need to be careful as intervention is not a thing we want to ignore. I will stay away from the market and wait for further development

EURJPY

As I had expected, the EURJPY break below 131.75, bottomed at 129.51 and closed at 129.56. The pair attempt to push lower earlier today in Asian session, bottomed at 126.86 but concern about possible intervention by Japanese government to weaken the Yen brought the pair higher around 128.62 at the time I wrote this comment. Well, I don’t know whether the market will respond further to the intervention threat, but technically we have a hammer pattern indicating that bullish correction is potential. I prefer to stand aside for now. Immediate resistance at 130.20 area. Break above that area should trigger further bullish correction.

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