FOREX TRADING

Daily Technical Analysis

EURUSD Outlook

In my weekly summary on Saturday, I said that in order to complete the valid double top formation, the second bearish channel (yellow) must remain valid. Well, looks like the channel has been violated to the upside earlier today in Asian session as you can see in my h4 chart below. This fact should diminish the double top bearish reversal scenario and the pressure is now more to the upside, but it’s too early to say that double top bearish reversal scenario is over. I think this pair need consistent move above 1.4950/60 to continue upside pressure re-testing 1.5062. A failure to do so could be considered as a false breakout and trigger significant bearish momentum. Only break above 1.5062 should be seen as double top scenario failure and could lead to bullish continuation scenario targeting 1.5150 and 1.5300 area. On the downside, key support level remains at 1.4850/20 area. Break below that area should keep the valid double top scenario intact towards 1.4625 and 1.4450 area.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD had a significant bearish momentum yesterday, bottomed at 1.4821 and closed at 1.4844. The valid double top bearish reversal scenario on daily chart I said yesterday surely now in a good progress as bullish momentum seems exhausted but once again, we need consistent movement below 1.4850 and a clear break below the major trendline support in order to confirm the scenario towards 1.4625 even 1.4450 area.

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Daily Technical Analysis

EURUSD

The EURUSD made another indecisive movement yesterday, still trapped in 1.5062 – 1.4930 range area. As you might already know, I have been paying attention on potential double top formation since the beginning of this week, as you can see in my daily chart below. Here are two double top scenarios I have in mind:

Valid: Double top is a bearish reversal pattern. With 1.5062/50 area considered as the peaks, failure to break above that area would trigger downside pressure, and once price break below 1.4850 the double top bearish reversal scenario is confirmed. Break below 1.4850 might also a violation to the major trendline support (blue) which potentially also trigger bearish reversal scenario.

Failure: A double top formation considered to be fail if price break above the peaks. I like to see it this way: A bearish reversal scenario failure usually produced the other scenario, bullish continuation with technical target remains at 1.5150 and 1.5300

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Daily Technical Analysis

EURUSD Outlook

The EURUSD made indecisive movement yesterday. The pair attempted to push lower, bottomed at 1.4937 but closed higher at 1.4983. I think the pair is now consolidating after significant bullish on Monday. The bias is neutral in nearest term but bullish scenario should remains intact, at least indicated by a bullish channel (yellow) as you can see in my h4 chart below. Immediate support is seen at 1.4930 and lower line of the bullish channel. Break below that area could trigger further bearish correction testing 1.4850 and the major trendline resistance area (blue) and could be a potential threat to my bullish outlook. I still prefer and expect a bullish scenario for this week but I think we need a clear break above 1.5062 to confirm bullish scenario towards 1.5150 and 1.5300. Expected range at 1.4930 – 1.5062.

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Majors Yearly High Swing Point

Overall, the dollar index strengthened throughout the Asian session, but as the market headed towards the European open, the dollar gave up to most of its gains. The pair most affected by the selling was the pound, which plunged 150 pips from the Asian session open. Right now, the currency market is close to the high of the current year, just waiting for a trigger to push the price action one way or the other.

Dollar Index Technical View:

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Daily Technical Analysis

EURUSD Outlook

As I had expected, the EURUSD continued it’s bullish momentum yesterday, topped at 1.5019 and closed at 1.4995. The bias should remains bullish in nearest term re-testing October 26 high, 1.5062. I will be watching any reaction around this area since technically we could have a double top formation if price reject to move above that area, as you can see in my daily chart below. However, a breakout above that area should continue the upside scenario targeting 1.5150 area as a bearish correction/reversal scenario failure could potentially produce the other scenario: bullish continuation. Immediate support is seen at 1.4950 followed by 1.4850 area.

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USD Lower, Stocks Surge, G-20 to Maintain Stimulus

• USD: Lower, IMF says USD still on the strong side, G-20 pledged to maintain stimulus, low Fed yields
• JPY: Higher, Japan tops China as biggest buyer of US debt, reserves rise to a new record
• EUR: Higher, EU Sentix rises, German exports surge, strong German industrial output
• CHF: Higher, unemployment at 11 year high, consumer prices fall, rising risk of intervention
• GBP: Mixed, supported by improving risk appetite
• CAD and AUD: AUD &CAD higher, tracking stocks, risk appetite, higher crude and record price of gold

Overview

USD traded sharply lower Monday pressured by a number of factors which included, stronger global equity markets, a pledge by the G-20 to continue with stimulus and a statement from the IMF that the USD is overvalued. The USD was also pressured by G-20 silence on USD decline. Speculation that the Fed will maintain low yields for an extended period coupled with the G-20 pledge to not withdraw stimulus until the global recovery is secure fueled demand for equities and sparked an improvement in risk appetite.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD made indecisive movement on Friday. On daily chart below we can see that after made a false breakdown on November 03, price now retreat to the upside, traded above the trendline indicating potential further bullish scenario with 1.4950 – 1.5060 as nearest target before 1.5300. Immediate support at 1.4850 – 1.4800 area. Break below that area should diminish my bullish outlook but as long as the pair stay above the trendline, I prefer a bullish scenario.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD peaked at 1.4917 after an optimistic statement about Euro economy outlook from the ECB, but closed lower at 1.4871, formed a Doji on daily chart indicating indecisive movement. While my technical outlook remains bullish with 1.5060 and 1.5300 as potential target, I think the market is waiting for NFP and unemployment rate today, which expected to be at -175 K and 9,9%. While most economic data both in US and Euro generally show positive signals, many analysts see high rate of unemployment as a potential obstacle to the recovery progress. I have three possible scenarios regarding NFP number

• No surprise: If the actual number is the same or only have small difference with expected number, the EURUSD should continue the bullish.
• Big downside surprise: If the actual number much lower than expected, the Dollar might benefit as risk aversion might increase.
• Big upside surprise: If the actual number much higher than expected, the Dollar might suffer as risk appetite might increase.

On technical side, as you can see in my h4 chart below, after the false breakdown, price reverse higher and made a breakout and now retrace lower, struggling around the upper line of my range area. The way I see it, it’s just a normal downside pullback before continue further bullish momentum. Immediate support remains around 1.4800 area. Break below that area should lead to no trading zone as direction would become unclear for me. CCI just cross the 100 line down on h4 chart suggesting potential downside pressure but any bearish movement should be seen as correction at this phase.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD failed to continue it’s bearish momentum yesterday, even the Fed statement was flat, nothing significant. The way I see it, market opinion was that the economy recovery is still in the right track. The Fed also said that it will keep the rates near zero for ‘an extended period’ which make the Dollar less interesting than major currencies.

Technically, we have false breakdown on both major trendline support on daily chart and the range area on h4 chart as you can see in my daily and h4 charts below, which potentially lead to further bullish momentum. Like I said yesterday, false breakdown from the range area on h4 chart lead to further bullish momentum with 1.4950 – 1.5060 area as potential bullish target. I prefer a bullish scenario at this phase and focus now is on ECB rate decision and press conference today. With no significant surprise in economic data, it’s more likely that the ECB statement will also flat but investors, once again, might see that global recovery is also still in the right track. Unless we have significant negative tone from ECB, the Dollar should keep under pressure. Immediate support at 1.4800. Break below that area should lead us into no trading zone but I still prefer bullish scenario. I think it’s better to do nothing for now until the ECB press conference. Patient, my dear fellow traders, is a virtue.

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Daily Technical Analysis

EURUSD Outlook

We have a significant technical event yesterday. As you can see in my daily chart below, the trendline support has been violated to the downside, bottomed at 1.4625. This fact should trigger further weakness for the Euro with 1.4450 as technical target, but we need to be very careful here since the pair closed much higher at 1.4716 indicating limited bearish. Every time a trendline support is broken, oftenly price retreat to the upside and testing the trendline area, which is now become a resistance. So, as long as the pair stay below the trendline, expect further bearish scenario.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD continued it’s indecisive movement yesterday. On my daily chart below we can see that the pair still struggling around the trendline support area. Basically, the trendline support remains my key technical focus at this phase and a strong support area to prevent further downside pressure which keep the bullish scenario intact. I think I will keep out from the market until I have a clear and convincing movement, below or above the trendline. Immediate resistance is seen at 1.4850. Break above that area could make this pair vulnerable for further upside pressure re-testing 1.4950 – 1.5060 area. Initial support at 1.4700 – 1.4680 area. Break below that area should trigger further weakness for the Euro.

On fundamental side, we will have some key economic numbers this week as US (tomorrow) and Europe (Thursday) are going to announce interest rate and US NFP on Friday. I am expecting these fundamental events to be the market movers to take us out from this choppy market. I feel this week is going to be a very important week as what happen here might have a bigger impact on longer term outlook, whether we will continue the bullish scenario towards 1.5300 or back towards 1.4450 area.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD failed to continue it’s bullish momentum on Friday and now re-testing the trendline support, as you can see in my daily chart below. I see this fact simply as a battle between buyers and sellers around a critical technical point. What is going to happen today, might be very important for the weekly outlook beside US NFP on Friday. The bias is neutral in nearest term but as long as the pair stay above the trendline, the bullish scenario re-testing 1.5062 area before aim for 1.5300 still intact. However, if we have a break below the trendline, we should have a bearish view for this week, with technical target around 1.4450 area. How I react to what happen in the market is one of the key elements in my trading system, and I will be watching and react to what happen to this trendline support.

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Daily Technical Analysis

EURUSD Outlook

The trendline support on daily chart I showed you yesterday proved to be an important support at this phase as bearish pressure failed to push lower and EURUSD started to regain it’s bullish momentum, topped at 1.4858 and closed at 1.4839. This fact should be seen as potential end to the bearish correction and price seems to ready re-testing 1.5000 once again. The bias is bullish in nearest term targeting 1.4950 – 1.5000 area but we need a consistent movement above 1.4850 to confirm the bullish scenario. Immediate support at 1.4760 area. Break below that area should lead us into no trading zone as price might retesting the trendline support one more time. Overall, as long as the pair able to stay above the trendline, I prefer a bullish scenario at this phase.

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Daily Technical Analysis

EURUSD Outlook

As I had expected, the EURUSD continued it’s bearish momentum yesterday, bottomed at 1.4690 and closed at 1.4715. As you can see in my daily chart below, we area in critical technical phase where price is now testing the major trendline support. This trendline support could be a strong support area since overall in longer term the bullish outlook remains intact, but once violated to the downside, we should have further bearish scenario. So I think what is going to happen on that trendline support today and the rest of this week should be our technical focus at this phase.

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