FOREX TRADING

Daily Technical Analysis

EURUSD

The pause in Euro rally triggered by Dubai World debts payment delay so far expected to be temporary as after hit bottom at 1.4827, Euro recovered quickly, closed much higher at 1.4985 on Friday and the trendline support still did a good job prevented further bearish attack thus technically keep the bullish scenario intact, especially if price able to move consistently above 1.5062 today, which is technically potential to be tested after rebound from 1.4827. However, note that the false breakout from 1.5062 area (see my daily chart below) also hide a potential bearish view and price could make another downside attempt testing the trendline support and 1.4827 once again, especially if price break below 1.4920/00 area today. No one knows whether the impact of Dubai World is only a temporary panic reaction last week or will continue to shake world stocks market thus could bring the Dollar higher this week. The bias is bullish in nearest term testing 1.5062. Valid break above that area should trigger further bullish momentum towards 1.5140/50 area

GBPUSD

The GBPUSD had a volatile market but indecisive on Friday. Price attempted to push lower, bottomed at 1.6269 but further bearish momentum was rejected as price whipsawed strongly to the upside, hit the top at 1.6510 and close at 1.6494. On h4 chart below we can see that after break below trendline support (blue, now resistance), price retreat to the upside testing the trendline, which is often happen technically. Although the quick and strong bullish rebound from 1.6269 on Friday is surely a serious threat to the bearish scenario, note that my trendline resistance (red) still valid indicating that bearish scenario in longer term remains intact. The bias is bullish in nearest term testing 1.6600 – 1.6670 area. Violation the the trendline resistance (red) should be seen as bearish failure and potential bullish outlook in longer term. Initial support at 1.6430/00 area. Break below that area should continue bearish pressure re-testing 1.6269 area.

USDJPY

The USDJPY attempted to push lower on Friday, bottomed at 84.79 but further bearish momentum was rejected as price whipsawed to the upside, hit the top at 87.00 and closed at 86.46. Beside the hammer candlestick pattern which proved to be a good signal of bullish rebound, the Japanese government threat to jump into the market to weaken the Yen seems effective so far. The bias is bullish targeting 87.50 in nearest term as I am expecting market continue to respond further to the intervention threat thus potentially bring the pair higher. Immediate support at 86.30. Break below that area should trigger further bearish momentum but I will not place a short position under the intervention threat although technically I still prefer a bearish scenario in longer term.

USDCHF

The USDCHF attempted to rebound higher on Friday, topped at 1.0174 but further bullish correction was rejected as price failed to consistently move above 1.0120 and now back below the trendline (aqua) indicating potential bearish view. The bias is bearish in nearest term with technical target around 0.9913 area. Immediate resistance at 1.0120 area. Break above that area should lead us once again into no trading zone as direction would become unclear for me.

AUDUSD

The hammer candlestick pattern gave us a good signal of bullish correction on Friday as the pair closed higher at 0.9059 after bottomed at 0.8916 and continue to push higher earlier today in Asian session, traded around 0.9155 at the time I wrote this comment. The bias is bullish in nearest term targeting 0.9250 even 0.9327 in longer term but we need a consistent move above 0.9180 key resistance area to continue further bullish momentum. Immediate support at 0.9090. Break below that area should trigger further bearish momentum re-testing 0.9030 even 0.8916 area.

GBPJPY

The market responded to the intervention threat by the Japanese government and brought the pair higher, topped at 143.47 and closed at 142.66 after bottomed at 139.27 on Friday. Technically, the hammer candlestick pattern, as you can see on h4 chart below suggest potential upside correction testing 144.60 in nearest term. Break above 144.60 could be a serious threat to the bearish outlook and potentially begin the bullish outlook in longer term at least testing 148.50 area. Immediate support at 142.50. Break below that area should trigger further bearish momentum but I won’t place a short position under an intervention threat.

EURJPY

The hammer candlestick pattern gave us a valid bullish correction signal on Friday as market responded to the intervention threat by the Japanese government to weaken the Yen. Price whipsawed to the upside significantly, topped at 130.13 and closed at 129.55 after attempted to push lower and hit bottom at 126.86. I am expecting further bullish momentum testing 131.75 and the trendline resistance area (red, see h4 chart below) as market may continue respond further to the intervention threat thus potentially bring the pair higher. Immediate support at 129.50/00 area. Break below that area should trigger further bearish momentum technically but I won’t place a short position under an intervention threat.

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