FOREX TRADING

Daily Technical Analysis

EURUSD Outlook

The EURUSD was indecisive yesterday. On h1 chart below we can see that price moves in range area of 1.3417 – 1.3507 indicating consolidation after bullish correction on Friday. The bias is neutral in nearest term. The major trend remains bearish but the fact that price so far still able to move consistently above 1.3450 area still indicating potential further upside correction testing the upper line of the major bearish channel. We need a break from the range area to see clearer direction. Break above 1.3507 could trigger further upside correction testing 1.3600 area while a break below 1.3417 not only could trigger further bearish momentum testing 1.3340 but potentially end the bullish correction phase testing 1.3250 and 1.3100 region.

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Euro 1.3485

Initial support at 1.3270 (March 26 low) followed by 1.3247 (May 6 low). Initial resistance is now located at 1.3507 (Mar 24 high) followed by 1.3569 (Mar 23 high)

Yen 92.50

Initial support is located at 91.77 (Mar 25 low) followed by 91.09 (Mar 24 low). Initial resistance is now at 92.96 (Mar 25) followed by 93.77 (Jan 8 high). (more…)

Daily Technical Analysis

EURUSD Outlook

The EURUSD still maintain its bullish momentum earlier today in Asian market since triggered by hope on solution of Greek debt problem on Friday, slipped above 1.3450 but retreat lower around 1.3430 at the time I wrote this comment. Situation can be very tricky at this phase. The bias is bullish in nearest term. The major bearish scenario remains intact as long as price stay inside the bearish channel but we have potential upside risk. Note that Greek problem responsible for the Euro bearish momentum. So if the market optimism continues to grow and no longer see Greek problem as serious matter, then we have a good reason for bullish reversal scenario, especially if price violate the bearish channel. Immediate support at 1.3400. Break below that area should keep the bearish scenario intact testing 1.3300 – 1.3250 before testing 1.3100. Initial resistance at 1.3480. Break above that area should trigger further upside pressure testing 1.3530 and the upper line of the bearish channel which can be a serious threat to the technical bearish outlook.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push higher yesterday, topped at 1.3385 but further upside correction was rejected as price closed lower at 1.3286. Earlier today in Asian session price is traded higher around 1.3315. The bias is neutral in nearest term but the main outlook remains bearish for this pair with 1.3100 as nearest technical target. Immediate resistance at 1.3350/80. Break above that area could trigger further upside correction testing 1.3450/35 area. Only a movement above 1.3450 area could be seen as a serious threat to the bearish scenario. Initial support at 1.3250. Break below that area should continue the bearish scenario towards 1.3100 region.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD dropped significantly on Portugal downgrade yesterday. Price break below 1.3450/35 key support area, confirms technical bearishness targeting 1.3100 this week. Trichet is going to speak today and it make sense for me that probably he will say something ‘positive’ about the Euro zone or the Euro to prevent further and faster drop. Whether market will believe it or not is something I’d like to see. Immediate resistance at 1.3380 area. Break above that area could trigger further bullish correction testing 1.3450 as correction after significant bearish move should not be a surprise and the fact that price already in extreme oversold area, but I am in bearish mode for this pair. Initial support at 1.3250/70 area. Break below that area could trigger further bearish momentum towards 1.3100/50 area.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD had a volatile movement yesterday but still able to maintain its bearish momentum as further upside pressure was rejected at the trendline resistance, closed lower at 1.3494 and keep moving lower around 1.3467 at the time I wrote this comment. We are now in critical technical phase where price ready to test the 1.3450/35 key support area. However, no matter how strong the downside pressure is, I believe we need a consistent and clear movement below 1.3450/35 to confirm further bearish scenario targeting 1.3100 this week. Above 1.3450/35, any upside pullback is still open wide. Immediate resistance at 1.3530 area. Break above that area could trigger further upside correction testing 1.3600/50 region.

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USD Pares Gains as Stocks Rally

• USD: Higher, Greek bailout doubts, existing home sales come in slightly better than expected
• JPY: Lower, BOJ March minutes suggest deflationary pressures may be stronger than forecast
• EUR: Lower, no Greek aid plan yet, EU summit March 25th and 26th
• GBP: Lower, CBI retail sales disappoint, CPI falls more than expected
• CAD and AUD: AUD & CAD mixed, China may post an 8bln trade deficit in March, Canada LEI as expected

Overview

The USD traded higher Tuesday supported by worries that the EU will not agree on a plan to aid Greece and the increased threat of SNB intervention as EUR/CHF cross trades at a 10 year low. Ahead of the EU summit scheduled for March 25th and 26th there are conflicting reports about whether EU officials will come up with an aid plan for Greece. The latest report suggests that EU officials may be leaning towards some form of loan arrangement with Greece but skepticism abounds about whether the EU will come up with a credible plan to aid Greece. SNB president Hildebrand says that the central bank is ready to take decisive action against excessive CHF gains versus the EUR.CHF traded higher despite the threat of intervention. GBP traded lower pressured by report of weaker than expected UK annual CPI and soft UK retail sales. Commodity currencies were pressured by weaker CRB and a statement from China’s Premier Wen that China may run an 8bln trade deficit in March. This would be the first monthly Chinese trade deficit since April 2004.Wen’s comments may increase worries about global trade tensions. JPY traded mixed to lower with selling pressure attributed to the release of the BOJ minutes for March which state that Japan’s CPI may be weaker than forecast. Today’s dollar strength is impressive in light of the fact that the Fed’s Evans and Lockhart made dovish comments. Evans said that interest rates may stay at historic lows for at least another six months and accommodative policy may be needed into 2011. Lockhart warned against lifting the Feds extended rate pledge to soon. US existing home sales declined by 0.6% compared to 2% decline in December. USD pared early gains in reaction to stronger US equity market trade.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push lower yesterday, bottomed at 1.3463 but further bearish momentum was rejected as price whipsawed to the upside and closed at 1.3566. The bias is neutral in nearest term. I am still expecting further downside pressure after violation of the bullish channel re-testing key support area around 1.3545/35 area before targeting 1.3100 this week. However, I will pay attention to 1.3600/10 resistance area today. Break above that area could trigger further bullish testing 1.3700/50 region. Initial support at 1.3500. Break below that area should trigger further bearish momentum re-testing 1.3450/35.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD continued its bearish momentum on Friday, bottomed at 1.3502 and closed at 1.3528. The key support level to be tested at this phase is the triple bottom area around 1.3450/35 area as technical bearishness was strong after the violation of the bullish channel. Break below that area should trigger further bearish momentum targeting 1.3100 this week. Immediate resistance at 1.3580. Break above that area should trigger further upside correction testing 1.3650 area

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Key Reversal or Just "Profit Taking"?

A quick reminder to see the rundown of next week’s economic calendar highlights from our morning update .

It was more than a bit disappointing for the risk bulls to see the week close on a sour note, though optimists might try to write it off as profit-taking or odd behavior and/or profit taking from the triple witching phenomenon. Regardless, it created a number of interesting setups in the FX charts.

If we are simply to exercise some fundamental chart reading principles, however, then it appears something significant – or at least interesting – is going on here, especially in the commodity currencies, which together with EM currencies had enjoyed the most strength on the recent rally in global risk appetite. Next week will tell us whether this is just another one-off blip in risk willingness like the last one that only lasted three days in late February, or whether there is the risk of a further meltdown. Symbolically, the Dow Jones Industrial Average is trying to decide whether to close right on the support from the old high or just below it as we are writing this.

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USD Higher, Greek Debt Worries, India Hikes Rates

• USD: Higher, Greek fiscal worries, Fed discount rate hike rumors, India hikes rates 25 bps
• JPY: Mixed, FSA says falling land prices confirm Japan’s economy is still in deflation
• EUR: Lower, Greek uncertainty, EU inflation flat
• GBP: Lower, BOE’s Sentance sees risk of UK double dip recession
• CAD and AUD: AUD & CAD lower, Canadian core CPI rises above BOC target, retail sales rise

Overview

The USD traded higher Friday with the EUR pressured by uncertainty about whether the EU will agree to aid Greece. Monitoring the news out of Europe in regard to potential for Greece aid rivals the back and forth reports of whether or not the US Congress has the votes to pass health reform. One report suggests that German officials want Greece to seek help from the IMF. Another report suggests that EU officials and the member states have agreed to help Greece if needed. An official with the German central bank says that Greece should declare insolvency if it can’t finance its debt. USD was also supported by rumors circulating that the Fed may raise the discount rate before next April’s policy meeting. GBP traded lower pressured by a statement from the BOE’s Sentance that there is a risk of a double dip recession in the UK. Commodity currencies were mixed with the AUD pressured by increased fears of a trade war between US and China. CAD traded higher supported by report that Canadian February Core CPI rose above the BOC’s target and January retail sales were strong. The above target Canadian CPI increases the risk of an earlier than expected BOC rate hike. AUD drifted lower pressured by increasing fear of a US China trade war as US officials increased pressure on China to revalue the Yuan. There is a growing risk that the US Congress will name China as a currency manipulator. If the U.S. Congress named China as a currency manipulator China may take some form of retaliation measures. China sent an envoy to Washington Friday to try and ease Chinese trade friction with the US. USD traded to the day’s highs in reaction to report that India hiked rates 25 bps. The rate hike sparked selling of equities and a spike in risk aversion. There were no major US economic reports in today’s trade.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD had a significant bearish momentum yesterday, break below the bullish channel indicating potential bullish failure testing 1.3530 area even 1.3450/30 key support level. The bias is bearish in nearest term however note that the bullish reversal scenario triggered by the triple bottom formation technically still provide technical bullish scenario. Only a break below 1.3450/35 area could be seen as ‘the real’ bullish failure targeting 1.3100 area. Immediate resistance at 1.3670 area. Break above that area should trigger further bullish momentum re-testing 1.3800/50 region.

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USD Higher, Consumer Prices Flat, Continuing Claims Rise

• USD: Higher, Greek fiscal worries and tensions with China over Yuan revaluation, Philly Fed rises
• JPY: Mixed, manufacturing sentiment improves, gains limited as US equities rally
• EUR: Lower, Greece may seek IMF aid as EU aid to Greece appears less likely
• GBP: Lower, February budget deficit smaller than expected, CBI orders decline
• CAD and AUD: AUD & CAD lower, Canadian net foreign investment flows rise

Overview

The USD traded higher Thursday supported by concern about the Greek fiscal outlook and in reaction to increasing tensions between the US and China over the value of the Yuan. EUR was pressured by a Dow Jones report that Greece may seek IMF aid as aid from the EU seems less likely. Greek PM says it will give the EU one month to decide on an aid plan. US officials tell China that the value of the Yuan is a real concern. There is a movement in U.S. Congress to name China as a currency manipulator. Chinese officials continue to push back against pressure to revalue the Yuan and state that a rise in the Yuan would be a disaster for Chinese exports. US and Chinese rift over the Yuan dampens risk appetite and sparked selling of the commodity currencies. CAD outperformed supported by report of strong net foreign investment flows to Canada and diminished threat of BOC intervention. JPY traded higher in reaction to today’s drop in risk appetite and by report of improving manufacturing sentiment in Japan. GBP traded lower in reaction to a decline in UK CBI orders with downside limited by report of smaller than expected UK February budget deficit. Today’s US economic data was mixed with February CPI unchanged and jobless claims came in slightly higher than expected. Continuing claims unexpectedly rose by 12k. The US current account deficit widened by less than expected in the fourth quarter. LEI was reported a bit weaker than expected and the Philly Fed came in above expectation. Today’s US economic data points to a slow US recovery with low inflation and USD consolidated early gains.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push higher yesterday, topped at 1.3817 but closed lower at 1.3734 and keep moving lower around 1.3720 at the time I wrote this comment. While technical bullish view remains intact as price still move inside the bullish channel after formed a triple top formation, Euro bullishness is limited by hesitation on the Greek rescue package which is so far can’t really convince the market and could still weigh on Euro. Immediate support at 1.3670 area. Consistent move below that area should trigger further bearish momentum towards 1.3530 area and could be a serious threat to the bullish reversal scenario. On the upside, break above 1.3850 should trigger further bullish momentum towards 1.4020/50 area

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Currency Crosses Pairs Analysis

EUR/GBP

Current level – 0.9054

Longer term bias remains neutral to bullish for the pair, closing above both bearish trendlines confirms some upside for the week ahead.

Intraday: Yesterdays brake below the trendline isnt confirming a retrace yet. Although the cross is making an effective pullback its loosing bullish momentum and we dont discard a further retrace to 0,8980-0,9000 support zone

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