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USDJPY: Bullish momentum intact above the interim risings support at 95.73 today

Thu, Mar 5 2009, 06:20 GMT
by Per-Erik Karlsson

Avantage Financial GMBH

Euro

Expect the correlation between the Euro and stock prices to be the main theme today as well, which suggest stronger Euro when stocks rally and stronger USD when stocks fall. The break below 1.2500 key support overnight looks like a stop hunting and option barrier knock out move and it quickly reversed higher. I have seen this type of price action quite a few times during the week that US nonfarm payrolls gets published. Smart money have a decent clue on the upcoming release and run the market in the opposite direction of the move you will see after the payrolls to wrong foot other traders and force weak holders to get stopped out and temp other traders to buy/sell the break. Will write up a separate piece on this subject tomorrow, so stay tuned for more info.

Have resistance today at falling resistance from Dec 08 high coming in at 1.2710, with minor resistance at the 21 day EMA of 1.2767.

Support: 1.2459 (overnight low), 1.2328 (2008 low)

Resistance: 1.2710 (falling resistance from Dec 08 high), 1.2767 (21 day EMA), 1.2898 (last Wednesday’s high), 1.3000 (psychological resistance), 1.3090 (February high)

240 min – Downtrend intact below the falling resistance at 1.2710, while it broker below the underlying support looks like a false break for the time being, a move above 1.2670 would confirm false break.

Cable

Remains weak below the falling resistance coming in at 1.4646 today. The 1.50 level is also key resistance level. Not been able to sustain the break below 1.40 yet and seems to be well supported towards 1.40 level. Bank of England rate announcement out tomorrow could provide the next big move for GBP, so keep any eye on that announcement. Key levels for today are, falling resistance at 1.4646 and support at Monday’s low at 1.3956.

Support: 1.3956 (Monday’s low), 1.3501 (2008 low)

Resistance: 1.4646 (falling resistance), 1.4985 (Feb. 2009 high) 1.5372 (2009 high)

120 min – Falling resistance at 1.4646 is key level to break to rally.

USDCHF

Trading inside the rising trend channel with 1.1953 overhead resistance and 1.1518 underlying support. Need to close outside of this range to trigger and bigger directional move. Last Friday’s price action was bearish and suggest a possible break to the down side that is what I favor for the moment as long as falling resistance from the October 08 high is not broken , coming in at 1.1963 today.

Support: 1.1514(triangle support), 1.1313 (27th of January low)

Resistance: 1.1884 (20 Feb high), 1.1953 (triangle resistance), 1.1963 (falling res. from Oct. 08 high)

USDJPY

Bullish momentum intact above the interim risings support at 95.73 today. Have minor support at that former overhead resistance coming in at 96.83 today. Next target is now 100.54 level. The correlation between stock prices and JPY is totally gone and seems to be more focus on the struggling Japanese economy over the last few weeks.

Support: 96.83 (former overhead resistance), 95.73 (interim rising support), 94.62 (break out level), 92.14 (rising support from 09 low), 87.09 (Dec. 08 low)

Resistance: 100.54 (November 2008 high)

EURJPY

The bullish momentum was a bit weakened over the last few sessions, however the higher close yesterday could indicate that Monday’s down move was just a test of supply, which indicated a possible successful test. To confirm this it has to break above the 126 level in the next few sessions to open for a rally towards 130. Not been able to make any substantial move above the 125.74 that is the 23.60% Fibonacci retracement of the 169.96 to 112.07 move. A daily close above 126.00 would target 130 level next.

Support: 120.48 (former overhead resistance), 117.88 (Friday low), 115.61 (rising support)

Resistance: 125.74 (23.60% Fibonacci of the 169.96 to 112.07 move) 131.09 (December 08 high)

USDCAD

Closing in on that 1.30 level, which remains the key resistance level to break to get another rally higher. Probably need to break above 1.3050 or so to make sure the break is real and not just a stop hunting move. Expect a fair amount of sellers stepping in ahead of that 1.30 level. Rising support coming in at 1.2408 today, which need to hold to keep the recent bullish momentum intact.

Support: 1.2408 (rising support), 1.1759 (last reaction low), 1.1685 (rising support), 1.1460 (break out level)

Resistance: 1.3007 (March 2006 low)

EURGBP

The interim falling resistance (0.8845) was broken Wednesday last week and this opens for a test of the 0.9079, which is the key resistance level and gateway to higher levels. Key support remains the 0.8630 level.

Support: 0.8778 (rising support), 0.8630 (2009 low)

Resistance: 0.9010 (yesterday‘s high), 0.9079 (February high)

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Published on  Thu, Mar 5 2009, 06:53 GMT