15-min: Following up with yesterday’s EUR/USD update, I am now stalking the bearish attempt that is now developing after a pullback. The projection is 1.2620, and the market is at 1.2690 a couple of hours ahead of the US session.

A break above 1.2730 may spell trouble, but we can anticipate the market making a new low in the US session. The 1.2620 area can still be a viable target,

2 Things concern me with this bearish outlook in the near-term. (more…)

GBP/JPY: The GBP/JPY and GBP/USD were covered in yesterday’s Video Technical Update. Both pairs were testing 61.8% retracement from previous week’s decline.

The GBP/JPY was declining already in the US session. It slowed down in the Asian and European session, but did break below the rising trendline. The 134.86 area or 61.8% retracement is the next level of support.

If that breaks, further decline to 133.30 area can be expected.

The RSI so far has broken below 40 so we know there is enough bearish momentum for the market to test these levels.

However, a break above 1.3740 spells trouble for this bearish outlook.

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Good morning from cold Germany and welcome to our FX Comment. After having a record fall in almost all currency pairs last week, today we are able to see small recoveries and important fundamental news from Europe, which might be important for the 16-nation currency.

We wish you a nice trading day and relaxed start in the new week.

Markets review

The EUR/USD pulled back from its record low after European policy makers unveiled an unprecedented loan package worth, which will include nearly $1 trillion to avoid a national bankruptcy of the states inside the Euro zone. ‘In order to sterilize the impact of the above interventions, specific operations will be conducted to reabsorb the liquidity injected through the Security Markets Program,’ the European Central Bank said. The ECB said also that it will intervene in government and private bond markets ‘to ensure depth and liquidity in those market segments, which are dysfunctional.’ The EUR/USD gained for a second day to 1.2920 after it touched a low of 1.2529 at Thursday, which was its lowest level since March 2009. The stock market in the U.S. with indices such as the Dow Jones fell almost 1000 points with people saying it has been a technical issue. Anyways, according to a survey the ECB will climb its main interest rate from a record low of 1 percent in the first quarter of 2011.

The AUD and NZD both gained as Asian shares surged and investors purchased higher-yielding assets. The Nikkei 225 Stock Average gained 1.3 percent while the MSCI Asia Pacific Index of regional shares advanced 0.9 percent. The risk appetite has gained mainly because of the decision of the European Union. Therefore, low-yielding currencies like the JPY and USD generally fell versus other currencies while stocks and higher-yielding currencies recovered from losses of last week. The AUD/NZD turned to the upside after it reached a low of 1.2408 at Friday, which was its lowest point since February 2nd 2010. The AUD/USD tuned back as well after it reached a deep fall last week with touching a level at 0.8716 which was the lowest since February 10th. The USD gained versus the JPY on speculation that a U.S. report may publish an increase in confidence among small businesses, which is expected to be climbed to 87 in April from 86.8 the prior month, according to a survey. The USD/JPY gained for a second day, coming back from its record low from last week as it touched a low at 87.91. (more…)

The euro declined for a fourth day, trading below $1.28 for the first time in almost 14 months, before a European Central Bank meeting that may announce more measures to contain Greece’s debt crisis. The common currency also fell against the yen before Greek lawmakers debate austerity measures needed as part of an international bailout, after protests in Athens left three people dead yesterday. The ECB will leave its main rate at a record low, all 58 economists surveyed by Bloomberg say. Analysts have speculated the central bank may unveil bond purchases to stabilize the market, potentially depressing the euro further.

Trading Tactics

A clear downtrend could be an opportunity to sell EUR/USD.

A buying point is at 1.2950; Fibonacci 50% is the take profit at 1.3130; Pivot point is the stop loss at 1.2870

A selling point is at 1.2789; Pivot point is the take profit at 1.2670; Fibonacci 23.6% is the stop loss at 1.2920

Technical: Euro breaks previous support level and continues the minor downtrend. A move back lower could set up a test of 1.3390 (more…)

Good morning from Hamburg and welcome! The financial situation in Europe seems to be the most significant for the FOREX market at the moment. After having Greece’s financial debt, a lot of investors are speculating who might be the next struck country.

We wish you a nice start in the new trading week!

Markets review

The EUR fell for the first time in four days versus the USD and the JPY after Euro-zone finance ministers agreed to a 3 year deal of €110 billion bailout for Greece. The commission, the EU’s executive arm, estimates that Greece’s gross domestic product will shrink about 4 percent this year and by almost half that amount in 2011, before growing in 2012. ‘The Greek banking system is actually quite well capitalized,’ Poul Thomsen, the IMF European Department Deputy director, said in Athens. ‘But clearly, with this dramatic program, the contraction in nominal GDP, we do expect to see an increase in non-performing loans.’ The package for Greece foresees the budget deficit failing to 8.1 percent of GDP this year from 13.6 percent in 2009.

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EUR/GBP

Current level – 0.8675

Longer term biasis neutral for the pair, the wide range between 0,8600 and 0,9100 needs resolution.

Intraday: capped in 0.8720/30 resistance zone, maintaining bearish bias against 0.8750. Look for a retest of 0.8620/30 this week.

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This week, the Euro and the Japanese yen stood out as losers. The Euro remains pressured in the cloud of uncertainty that surrounds the Greek debt situation. The market was also returning to Japanese weakness. April until this week has seen mainly yen-strength, but perhaps this corrective period is over. Finally, commodity pairs could not get that extra push beyond its recent limits. Let’s take a look at how we can prepare for the upcoming weeks, given this week’s action.

EUR/USD Sliding Towards 1.3050 (Link)

Update: The pullback mentioned in the post is not complete. There is a more significant rally. The "pop-up" may provide us with "negative RSI reversals" to start next week.

4H and Daily: The EUR/USD pair opened the week continuing its decline after closing last week’s gap on Friday. The 4H time-frame shows a break of a slightly rising support and a pullback.

The daily shows a swing projection towards 1.0350. A negative RSI reversal also suggests a swing projection to be an appropriate target.

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EUR/USD closed higher due to short covering on Monday. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are neutral to bearish signalling that sideways to lower prices are possible near-term. If it extends last week’s decline, March’s high crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm a short-term low has been posted.

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EUR/GBP

Current level – 0.8829

Longer term bias remains bullish for the pair, the pullback to the bearish trendline has been completed, testing bullish longer term trendline.

Intraday: higher low in place support from 0,8750 support. Headed towards 0,8850 resistance. Lets see from here..

(more…)

FX Technical Analysis

EURUSD

Comment: Still struggling under a large Ichimoku ‘cloud’, dipping below horizontal 9 and 26-day moving averages. Expect another attempt at basing against the 1.3400 area.

Strategy: Possibly attempt small longs at 1.3465; stop well below 1.3400. First target 1.3600, then 1.3800/1.3840

Direction of Trade: →

Chart Levels:

GBPUSD

Comment: Disappointing as Cable drops last week’s levels. It should now try and base against the lower edge of the Ichimoku ‘cloud’ and the 26-day moving average. Futures volume is almost half March’s peak.

Strategy: Possibly attempt small longs at 1.5235; stop below 1.5130. First target 1.5350/1.5385, then 1.5525/1.5575.

Direction of Trade: →

Chart Levels:

USDJPY

Comment: The 9-day moving average has pushed the dollar down so that it closed below the 26-day moving average on Friday. Momentum has just turned bearish and the US dollar is not oversold. We expect it to trade lower again this week, potentially to the 90.00 area by month-end.

Strategy: Sell at 92.05/92.20; stop above 93.85. Add to shorts on a sustained break below 91.75 for 91.00 and then 90.00.

Direction of Trade: →

Chart Levels:

EURJPY

Comment: Difficult as we drop from the upper edge of a very large Ichimoku ‘cloud’ down to the middle of this year’s range yet moving averages still suggest a long position. Expect more random moves this week.

Strategy: Possibly attempt small longs at 123.95; stop/reverse below 123.35 for 122.50. First target 124.50.

Direction of Trade: →

Chart Levels:

Mizuho Corporate Bank

Disclaimer

The information contained in this paper is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.

Daily Technical Analysis

EURUSD Outlook

The EURUSD had a bearish momentum on Friday, bottomed at 1.3472 and closed at 1.3508. The bullish scenario after price violated the major bearish channel remains intact but clearly has started to lose some momentum. Immediate support at 1.3450/35 area. Consistent move below that area should trigger further bearish pressure re-testing 1.3267 key support area even 1.3100 this week. Initial resistance at 1.3540 area. Break above that area should keep the bullish scenario intact testing 1.3620 and 1.3691 area.

GBPUSD Outlook

The GBPUSD made a gap today, opened about 100 pips lower than Friday’s close price. While the bullish scenario is in a serious threat as price violated the bullish channel, gaps are usually filled and big gaps may produce volatile movement without clear technical direction. I think I will stand aside form now. The bias is bearish in nearest term but like I said price may attempt to fill the gap by moving higher towards the lower line of the bullish channel. Immediate support at 1.5202. Break below that area could trigger further bearish momentum testing 1.5150 region before targeting 1.5000. Initial resistance at 1.5391.

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Over the previous weekend, the EU promised a bailout will be provided if requested by Greece. This gave the euro a boost to begin the week, creating opening gaps across the board. By the end of the week however, the initial momentum fizzled, and the EUR/USD closed its gap. Friday saw some strong risk averse moves seen in the JPY and commodity currencies such as the CAD and AUD.

EUR/USD Fills Gap and Signals Bearish Continuation

Note on Weekly: This week’s reversal of initial sentiments is a significant bearish signal for the EUR/USD. In the weekly, you can see a bearish RSI reversal pattern, which suggests a projection to 1.31.

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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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Good morning from beautiful Hamburg and welcome to the Varengold Daily FX Report. After the first two days of the week were driven by the news related to the rescue package for Greece today some important economic data releases moving into the market focus. The U.S. reports will show the latest consumer confidence and retail sales which may allow a conclusion to the rate decision of the Federal Reserve next week. However, we wish you a successful trading day.

Markets review

The JPY declined against a basket of major currencies on concern a report may show that the U.S. retail sales rose the most in four months. The JPY fell versus the USD from the strongest level in two weeks and the EUR/JPY climbed to 127.45 at its highest level as signs the global economy recovering boosted demand for higher-yielding assets. The GBP increased versus the EUR as a report showed that the U.K. exports surged in February and house values strengthened. Exports rose about 9.5 percent and helped to cut the trade deficit to 6.2bln pounds, the least since June 2006. The GBP also rose against the USD and climbed near to the strongest level since February. In contrast the U.S. trade deficit widened, the gap increased 7.4 percent to $39.7bln from a revised $37bln deficit in January, the Commerce Department said on Tuesday in Washington. The Federal Reserve Bank of Richmond President Jeffrey Lacker said that the U.S. economy will probably expand at a moderate pace for the rest of this year as spending by consumers and businesses picks up. (more…)

USD Lower, JPY Pressured by BOJ Ease Speculation

• USD: Lower, inventories drop more than expected, stocks rally
• JPY: Lower, BOJ ease speculation, weak machinery orders
• EUR: Higher, German exports drop sharply, industrial production rises in Italy and France
• GBP: Lower, industrial production posted an unexpected decline, concern about UK debt rating
• CAD and AUD: AUD & CAD higher, strong Chinese trade data, stocks and crude rally

Overview

USD traded in a narrow range gaining versus JPY and GBP, and drifting lower versus the EUR and commodity currencies. JPY was pressured by BOJ ease speculation. Reuters reports that the BOJ may ease monetary policy next week. GBP traded lower in reaction to report of an unexpected decline in UK industrial production. EUR erased early loses sparked by report of a sharp drop in German exports. EUR rebounded in reaction to report of stronger industrial production data from Italy and France and gains versus the JPY. The commodity currencies continue to outperform trading higher in reaction to strong trade data from China. China’s exports rose 45.7% in February. The Chinese trade data generates optimism about the strength of the global recovery. Dovish comments from the Fed’s Evans had limited impact on the trade. Evans said the weak labor market will make the Fed keep accommodative policy for some time. The Bloomberg Professional Global Confidence Index finds that optimism about the USD is an 18 month high as the US economy shows signs of recovery. According to the survey, investors expect the US economy to grow faster than Japan and Europe and the Fed is expected to hike rates before the ECB and BOJ. Growth and yield differentials are moving in favor of the USD. The Bloomberg survey also states that investors have turned negative the EUR because of fallout from the Greek debt crisis. Jeremy Siegel a finance professor at University of Pennsylvania Wharton school of business says the US recovery is certain but the EU may splinter. A fresh sign that the US economy is recovering is a report that US job openings are at an 11 month high. This report suggests that US employers may be ready to start hiring new workers. US economic data was mixed with wholesale sales coming in higher than expected and wholesale inventories lower than expected. USD traded to the days lows pressured by a surge in the price of crude sparked by report of lower crude inventories. Focus turns to Thursday’s release of US jobless claims and retail sales and Friday’s release of Michigan consumer sentiment.

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