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 made another rejection to consistently move below 1.4820 key support level on Friday. This fact surely keep the major bullish scenario intact, but the bearish reversal scenario warning showed by double top pattern with peaks around 1.5062 area is also still valid and the bias should remains neutral as market is consolidating now. Overall, this pair has been indecisive in the last two weeks and we need a significant movement above 1.5062 to continue the bullish continuation towards 1.5150 and 1.5300 or consistent move below 1.4820/00 area to confirm further bearish pressure towards 1.4625 and 1.4450 area. Immediate resistance at 1.4965 and the upper line of my bearish channel, which vulnerable to be tested today after rejection below 1.4820. A violation to the bearish channel should be seen as potential threat to the bearish reversal scenario re-testing 1.5062 area.

On fundamental side, we will have many news from Euro zone today (manufacturing and services PMI) and Trichet is going to make another statement which potentially move the market significantly, especially if we have big surprise whether in the numbers or Trichet’s comment. We know the he support a strong Dollar, but the market respond has been mixed so far.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push lower yesterday, bottomed at 1.4842 but bearish pressure was limited as the pair closed higher at 1.4915. The bias is neutral in nearest term. My technical focus remains at the bearish channel, which is still valid indicating bearish correction remains intact with the upper line of the bearish channel as key resistance area. As you can see in my daily chart below, the upper line has been doing a good job to keep the bearish correction intact since the rejection to move above 1.5062 area (peaks). Immediate resistance at 1.4965 area. Break above that area could be a serious threat to the bearish correction scenario re-testing 1.5062 area. Initial support at remains at the key support level around 1.4850/20 area.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD had a bullish momentum yesterday, topped at 1.4989 and closed at 1.4959 after rejected to move consistently below 1.4820 key support area and even after Trichet said that he support a strong Dollar. However, on my daily chart below the bearish channel remains valid and the upper line of the bearish channel provide a good resistance. So I think the bearish correction even a bearish reversal scenario (double top) is still intact. Once again, we need violation to the bearish channel to end this bearish correction and valid break above 1.5062 to confirm the bullish scenario towards 1.5150 and 1.5300

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Daily Technical Analysis

EURUSD Outlook

What a surprise we had yesterday. As you can see in my h4 chart below, after violated the bearish channel, actually this pair had a nice bullish momentum before Bernanke dropped the bomb with his pessimistic comment about economy recovery by saying this words: ‘Today, financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible’ Euro fell after that comment, hit the bottom at 1.4879 as risk aversion came back. I didn’t expected this negative tone but another surprise happened as the Euro recovered quickly, peaked at 1.5015 and closed at 1.4967. I thought that Bernanke’s pessimistic tone will support technical bearish reversal scenario, but it didn’t. I was wrong, but for me nothing is confirmed yet for now. To read Bernanke’s full comment, follow this link below:

Regardless of mixed reaction in the market on Bernanke’s words, technically, the fact that this pair still able to stay above 1.4950/60 right now should continue the pressure on Dollar re-testing 1.5062 today. However for me, only movement above 1.5062 could be seen as bullish continuation confirmation targeting 1.5150 and 1.5300. Immediate support at 1.4920 area. Break below that area could trigger further bearish momentum re-testing key support 1.4850/20 area.

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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 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

The EURUSD had a significant bearish momentum yesterday, bottomed at 1.4844 and closed at 1.4863. The CCI bearish divergence I showed you on Saturday give us a valid signal about bullish exhaustion and bearish momentum. On h4 chart below we can see that price violated the bullish channel to the downside indicating potential bearish view.

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Daily Technical Analysis

EURUSD Outlook

The EURUSD attempted to push lower yesterday but found support at 1.4943, whipsawed to the upside, topped at 1.5037 and closed at 1.5025, indicating bullish momentum remains strong and downside corrections might be over at this phase. I dont’ trade corrections, but I love them

My bullish channel on h4 chart below has been a very useful technical tool for me as bullish momentum still move perfectly inside the bullish channel with the lower line provide good technical support area. The bias remains bullish in nearest term still targeting 1.5080 and 1.5140. Key support level remains at 1.4950/60 area and the lower line of the bullish channel. Short position is not recommended.

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Daily Forex Technical Analysis

EURUSD Outlook

The EURUSD continued it’s bullish momentum yesterday, topped at 1.4761 and closed at 1.4721. On h1 chart below we can see that 1.4671 area is an important intermediate resistance at this phase. The bias is neutral in nearest term and we might see some downside correction today, but the bullish scenario with 1.4850 as potential target especially if price break above 1.4761 area remains intact. However do not rush buying now. CCI heading down towards -100 line on h1 chart and price pullback after touch 1.4761 so watch out for potential downside correction testing 1.4695 – 1.4650 support area. I will be watching any reaction around that support area before make any decision today. If price able to stay above that support area, the bullish scenario re-testing 1.4850 should remains intact. Break below that area should diminish my bullish view but short position is not recommended at this phase.

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