FOREX TRADING

Daily Technical Analysis

EURUSD Outlook

The EURUSD has been consolidating in range area of 1.4450 – 1.4250 in the last two weeks. I am expecting a break on either side to see clearer direction. The bearish scenario was interrupted since the violation of the bearish channel (red channel) but the bullish momentum also still limited so far. For me, nothing is confirmed. While conservative traders may stand aside in this situation, aggressive traders still can use range trading strategy, which is to short around 1.4450 or to long around 1.4250 with only tight stop loss. Break above 1.4450 should confirm the bullish scenario at least testing 1.4600 – 1.4800 area this week while break below 1.4250 should trigger further bearish momentum re-testing 1.4170 – 1.4127 area before aim for 1.4000 area.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push lower yesterday, bottomed at 1.4272 but closed higher at 1.4338. The pair is still consolidating in range area. I think we are in no trading zone now as direction is not clear in nearest term. Another way to trade in this kind of market is to short around 1.4420/50 or long around 1.4250 with a tight stop loss. We need a break from the range area to see clearer direction.  Break above 1.4420/50 area should be seen as bearish failure and trigger further bullish momentum towards 1.4600 even 1.4800 area. Break below 1.4250 should trigger further bearish momentum targeting 1.4170 – 1.4130 before testing 1.4000 area.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push higher yesterday, topped at 1.4457 but further bullish momentum was rejected as price whipsawed to the downside, bottomed at 1.4331 and closed at 1.4353. On h4 chart below we can see that was a case of a false breakout from 1.4420 – 1.4250 range area which usually trigger significant bearish momentum, at least testing 1.4250 area. Break below that area should trigger further bearish scenario towards 1.4170 – 1.4130 area. Immediate resistance at 1.4420 – 1.4450 area.

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• USD: Mixed, pares looses as consumer confidence rises more than expected
• JPY: Lower, US/Japan 10 year bond yield spread at widest level in two years
• EUR: Lower, downside limited by gains in cross trade to JPY and GBP and improving risk appetite
• GBP: Lower, concern about UK debt and election uncertainty
• CAD and AUD: AUD higher & CAD mixed, improving growth outlook, cooper prices at new highs for 2009

Overview

USD opened lower Tuesday pressured by improving risk appetite as global equities rally to their highest level for the year. As markets reopened from Christmas holiday in the UK and Australia, GBP continued to underperform pressured by concern about UK debt and AUD rallied more than 1% supported by surge in copper prices to a new high for 2009. USD consolidated recent gains versus the JPY as the US/Japan 10 year bond yield spread rose to its widest level in two years. There was limited reaction to report that Japan’s Finance Minister Fujii has been hospitalized. (more…)

Daily Technical Analysis

EURUSD Outlook

The EURUSD didn’t make significant movement yesterday, moved in only small range of 60 pips. On h4 chart below we can see that after the bearish scenario was interrupted by violation to the bearish channel, price seems to consolidating in a range area with 1.4420 area as a key resistance level and 1.4250 as key support level at this phase. The bias remains neutral and we need a valid break from the range area to see clearer direction. Break above 1.4420 should trigger further bullish momentum towards 1.4585 while break below 1.4250 should trigger further bearish momentum testing 1.4170 – 1.4127. We will have US consumer confidence data today which expected to be the market mover which can take us out from this ranging market and give clearer direction. A better than expected number should be good for the Dollar while a worse than expected number should weaken the Dollar.

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Momentum Remains Light

The currency market came to a standstill during European trading hours, after a smoothly trending Asian session that had the dollar sold. The range-bound trading pattern is in-line with the light trading volumes observed overnight, which did not allow the market to move anywhere decisively, or at least to test any important price points. Ahead, the market is expected to pick up some additional momentum during the U.S. open, but nothing out of the ordinary that could test easily the 4 Hour chart ranges that will need to break if a trend reversal can follow through.

Dollar Index Technical View: TheLFB Member Charts

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push higher on Thursday, topped at 1.4417 but closed lower at 1.4353. This fact lead me to a conclusion that price might be in consolidation phase. It’s too early for bullish scenario, but the bearish scenario is not over yet, not until we have consistent move above 1.4420 area. Break above that area should trigger further bullish momentum towards 1.4585 area. The bias is neutral in nearest term. Immediate support at 1.4250 area. Break below that area should continue the bearish scenario testing 1.4170 – 1.4127 area and keep the bearish scenario intact.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD bearish momentum was stopped yesterday. The pair failed to move consistently below 1.4250 and the Dollar was weaken significantly after new home sales number unexpectedly fell to 355K. Price topped at 1.4365 and closed at 1.4328. On h4 chart below, we can see that the bearish channel has been violated to the upside indicating potential threat to the bearish outlook. Remember that the bearish momentum in the last three weeks has been attempting to test the long term key support level at 38.2% Fibonacci retracement of 1.2456 – 1.5143 around 1.4127 area. Although it’s too early to say that the bearish momentum is over, the bearish channel violation should keep the long term bullish scenario remains intact convincingly. The bias is bullish in nearest term testing 1.4420 area. Immediate support at 1.4270 – 1.4250 area. Break below that area should keep the bearish scenario intact  testing 1.4170 – 1.4127 area. Break above 1.4420 should be seen as bearish failure and trigger bullish scenario back towards 1.4620 area.

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Dollar Consolidates Gains Before Christmas

Consolidating its recent strong gains, the dollar fell on Wednesday as investors took profits before the Christmas holiday. US personal income and spending rose slightly less than expected in November while new home sales unexpectedly decreased 11.3% m/m. The US economic weakness is temporary, not indicating the economic recovery is faltering. The S&P 500 rose 2.57 to 1,120.59. The yen and euro gained for the first time in seven trading days. Sterling declined modestly, pressured by Bank of England minutes that showed BOE policy makers unanimously kept their bond-purchase plan at £200 billion. The Australian dollar was supported by rising commodity prices. Despite slightly lower-than-expected Canadian GDP growth, the Canadian dollar rose for a fourth day, boosted by Canadian Finance Minister Jim Flaherty’s comments that he wouldn’t be surprised if China and Russia bought the Canadian dollar to diversify their currency reserve holdings.

The dollar index fell from a nearly 3-month high. After breaking its long downtrend, the dollar index surged as investors exited huge short dollar positions. We believe the dollar rally will continue; however, the dollar index, following sharp gains, may require further consolidation before new advances. Today the index found support from the short-term uptrend. There are important supports in the 77 and 76 areas, minor resistances at 78.50 and 79.50 and significant resistance in the 81 area. Thin market conditions over the holidays may exacerbate movements.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push higher yesterday, topped at 1.4331 but further bullish momentum was rejected as price whipsawed to the downside, break below 1.4250, bottomed at 1.4216 and closed at 1.4253. Looks like the double bottom support failed to prevent the bearish pressure a this phase. This fact should lead us to further bearish scenario with technical target at 38.2% Fibonacci retracement of 1.2456 – 1.5143 around 1.4127 area which is a key support level from longer term point of view. Break below 1.4127 should be a potential threat to the long term bullish outlook. Immediate resistance at 1.4300 – 1.4330 area. We have seen a very strong bearish momentum this month with no sign of significant upside correction.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push higher yesterday, topped at 1.4372 but further bullish momentum was rejected as price closed lower at 1.4273. This fact should keep the pressure on Euro re-testing 1.4250/60 support area today. The bias remains to the downside targeting 1.4172 – 1.4127 area today but we need consistent move below 1.4250/60 to continue the bearish scenario since we seems to have a double bottom support around that area as you can see on my h4 chart below. Immediate resistance at 1.4350/70 area followed by 1.4400 – 1.4450 area. Break above 1.4450 area should be seen as potential threat to the bearish outlook.

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Euro 1.4275

Initial support at 1.4262 (Dec 18 low) followed by 1.4178 (Sept 1 low). Initial resistance is now located at 1.4412 (Dec 18 high) followed by 1.4536 (Dec 16 high)

Yen 91.15

Initial support is located at 88.97 (Dec 18 low) followed by 88.58 (Dec 15 low). Initial resistance is now at 91.23 (Dec 21 high) followed by 91.32 (Nov 4 High).

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USD Mixed, EUR Rebounds in Cross Trade

• USD: Mixed, maintains gains despite rising equity markets, NASDAQ at new high for 2009
• JPY: Lower, exports declined at slowest pace in 14 months, five-year yield hits four-year low
• EUR: Mixed, supported by rebound in cross to CHF and GBP
• CHF: Mixed, EUR/CHF recovers from nine month low, SNB intervention suspected
• GBP: Lower, CBI says UK unemployment likely to rise in 2010
• CAD and AUD: AUD lower & CAD higher, Australia’s auto rise sales, Canada’s retail sales rise ex autos

Overview

USD traded mixed in Monday’s trade consolidating near a three-month high with the main focus on the volatility in the EUR/CHF cross. The CHF rallied to a nine month high versus the EUR then fell sharply in what appeared to be a large sell order from a major Swiss bank. It was unclear whether the CHF selloff was sparked by SNB intervention. SNB officials would not comment on the movement in CHF. CHF cross gains were attributed to safe haven flows sparked by escalating tensions between Iraq and Iran. European currencies traded mixed with the EUR firmer despite a statement from the EU commission that the EUR could be overvalued by as much as 7 to 8%. The EU commission went on to say that they see the EU recovery gaining momentum. GBP drifted lower pressured by the release of CBI forecast projecting more job losses in 2010 for the UK economy. Commodity currencies traded mixed with the CAD supported by rising crude prices. AUD drifted lower pressured by weakness in Asian equity market trade and RBA pause speculation. JPY drifted lower in reaction to report that Japanese exports continued to decline in November. There were no major US economic reports released in today’s trade. Dealers report that markets are thin reflecting the run-up to the Christmas holiday. Bloomberg reports that the fact that the USD remains firm as stocks rise to a new high for 2009 may be a sign that the worst is over for the USD as the inverse correlation equities continues to break down.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD made indecisive movement on Friday, formed a Doji on daily chart. Price attempted to push lower, bottomed at 1.4260 but closed higher at 1.4336. The rejection to move below key support level 1.4250 was not a surprise for me. It was a ‘normal’ upside correction on weekend after a significant bearish week, and overall the bearish scenario still in control, reflected on the bearish channel (red channel) as you can see on my h4 chart below. Break below 1.4250 should trigger further bearish momentum targeting 1.4170 – 1.4127 area, which is an important support area in longer term. Immediate resistance is seen at 1.4400 – 1.4450 area. Break above that area should lead us into no trading zone

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Usd Held At Resistance On Triple Witching Friday

The major currencies were helped by S&P futures and by the cash equity market in gaining a few pips during the overnight session. However, compared to the sell-off seen over the last two weeks of trading, this intra-day uptrend is very small. Unless the cash and equity markets continue to stay into the green during the day, another round of Usd buyers might join the market during the upcoming U.S. session.

The one thing that may hold fair value on most markets is the expiry of December, quarterly, and yearly U.S. option contracts today.

Dollar Index Technical View: TheLFB Member Charts

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