FOREX TRADING

The EURUSD had a moderate bullish momentum yesterday, topped at 1.2710 and closed at 1.2696. This fact should keep the upside correction scenario intact at least testing 1.2750 and  1.2850 – 1.2900 area. However, as you can see on my h1 chart below, we have a rising wedge formation indicating potential bearish pullback especially if price break below the rising wedge. Although we are still in upside correction phase, this formation could be a trap, so I think I will stand aside for now. Immediate support at 1.2605 area. Break below that area could trigger further bearish pressure testing 1.2465.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD was indecisive yesterday. The bias is neutral in nearest term. On h1 chart below we can see that price still moving inside a minor bullish channel (white channel) indicating upside pressure in nearest term is still potential. Break below the minor bullish channel could trigger further bearish pressure towards 1.2240 support area before testing the major bullish channel (blue channel). On the upside, 1.2450 remains the nearest upside target especially if price able to move consistently above 1.2350 area.

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EUR/USD closed lower on Wednesday and the mid-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends the rally off last week’s low, the reaction high crossing is the next upside target. If it resumes this year’s decline, monthly support crossing is the next downside target.

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EUR/GBP

Current level – 0.8332

Longer term bias switched to bearish now that the cross has breached key support in 0.8400 area.

Intraday:  bounces off 0.8250/60 level. Look for a consolidation phase between 0.8410 and 0.8200. Key intraday resistance in 0.8350 .

Profit-taking affects gold curbing silver and platinum

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This week was an important one to assess how the market is reacting to last week’s shaker. The fundamental front is dominated by EU woes but the market is also starting to realize greater structural implications globally. The discussion now is whether this current crisis will derail the recovery in Europe and the US.

Intermarket Analysis

The US is plagued by realization of structural faults too as the market now all knows that the major US banks did not have one losing day trading in the Q1 2010. This eerily reminds me of Madoff’s equity curve, which was incredibly and improbably consistent. That type of consistency should call for attention, yet the banks slipped under the radar until Goldman Sachs was brought under criminal investigation.

The worrying sign here is that there appears to be no real improvement. The structure of our finance system has clearly remained unchanged, and possibly even encouraged by bailouts. The market’s confidence in the Euro and Pound has been dropping, which has made the Greenback pretty. However, I suspect that we are going to continue a commodities rotation, evident by the persistent surge in oil and gold. If structural changes are to come, the market may even accelerate this rotation process.

EUR/USD

4H: Looking at a short-term time-frame, we see that the Euro continues to be pressured. The market formed a negative RSI reversal this week suggesting a swing projection to 1.23, 1.2350. The RSI is in the oversold territory but reflects healthy bearish momentum.

Monthly: The monthly is just a reminder of the bearish scenario. With a break below 1.2350, 1.23, we may see a drop to 1.15, 1.14.

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EUR/USD

Current level – 1.3556

EUR/USD is in a downtrend, after peaking at 1.5146 (Nov.25,2009). Technical indicators are neutral, and trading is situated below the 50- and 200-Day SMA, currently projected at 1.4793 and 1.4169

Yesterday’s slide bottomed at 1.3513 and we continue to be bearish here for 1.3442 with an initial resistance at 1.3582-96 area. Only a clear break above that zone will confirm, that the slide from 1.3690 is corrective in nature and will target 1.3820 major resistance.

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The EURUSD is currently trading at 1.3543 levels. It has moved 200-300 pips as expected . We do not see immediate bearishness below 1.3260 levels. We have recommended to sell at least 50% rom 1.3650 – 1.3700 levels for exporters for April and May . Importers have already taken significant covers near 1.33 levels earlier (refer last week update). Please note that the Monthly charts are signalling that Euro is highly oversold and may strengthen further till 1.38-1.40 levels in the coming 1-2 months incase 1.3650 breaks on a consistent basis. Buying on dips remains the strategy till 1.33 holds support. (EURUSD – 1.3543). – Neutral to Slight Bullish.

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CHF

The pre-planned sales from key resistance range levels have been implemented, but with loss of several points in attainment of minimal anticipated target. OsMA trend indicator, having marked fall in activity of both parties in the bigger picture as a sign of uncertainty regarding choice of planning priorities for today, suggests preservation of earlier designed trading plans practically unchanged. Namely, we can assume probability of rate return to channel line 1 at 1,0540/60 levels, where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for sales, on condition of the formation of topping signals the targets will be 1,0480/1,0500, 1,0420/40 and (or) further break-out variant up to 1,0360/80, 1,0300/20, 1,0240/60. The alternative for buyers will be above 1,0680 with the targets of 1,0720/40, 1,0780/1,0800.

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