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Cable: Remains weak below the interim falling resistance coming in at 1.4285 today

Thu, Mar 12 2009, 06:04 GMT
by Per-Erik Karlsson

Avantage Financial GMBH

Euro

Strong rally in stocks yesterday, which supported the Euro early on, but the rally met sellers ahead of 1.2850 level and got knocked down fast towards mid 1.26’s. Normally this strong rejection at the 1.2820 level yesterday should point towards weakness, so a bit surprised to see the yesterday’s highs being tested again today. However above 1.2600 the Euro actually is well supported and of course the risings stock market is helping as well. That correlation with stocks is pretty dominant and expect it to be dominant also going forward, which suggest stronger Euro when stocks rally and stronger USD when stocks fall. Basically bullish above 1.2600 and target is 1.2940 next. However there is a fair amount of supply towards 1.2850 that might be hard to crack on the first test. Expect stops to be above 1.2850. If this 1.2850 level would hold again today I would lean towards another test of the 1.2600 to 1.2550 area.

Support: 1.2578 (yesterday’s low), 1.2571 (underlying support), 1.2459 (Thursday’s low), 1.2328 (2008 low)

Resistance: 1.2820 (yesterday’s high), 1.2898 (last Wednesday’s high), 1.3000 (psychological resistance), 1.3090 (February high)

240 min – Broken the falling resistance at 1.2780 Monday opens for 1.2940.

Cable

Remains weak below the interim falling resistance coming in at 1.4285 today. The break below 1.40 Monday opens for a possible test of that yearly low at 1.3501. Key levels for today are, falling resistance at 1.4285 and support at the yearly low at 1.3501. Really have to get above the 1.39 level to make possible reversal and relieve the downside.

Support: 1.3501 (2008 low)

Resistance: 1.4285 (interim falling res), 1.4619 (falling resistance), 1.4985 (Feb. 2009 high) 1.5372 (2009 high)

120 min – broke key support at 1.40 Monday, opens for a test of 1.3501.

USDCHF

Broke to the downside out of the rising trend channel yesterday when going through the 1.1537 underlying support . This trend channel held for 27 days and as I have suggested over the last week the most likely break was to the downside. However the strong reversal off the lows suggest that the break was a possible false break. Need to close outside of this range to trigger and bigger directional move. Still fancy the downside for the moment as long as falling resistance from the October 08 high is not broken, coming in at 1.1953 today.

Support: 1.1537 (triangle support), 1.1313 (27th of January low)

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

USDJPY

Bullish momentum intact above the interim risings support at 97.20 today. Have minor support at that former overhead resistance coming in at 97.50 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, but for how long will this correlation be absent?

Support: 97.50 (former overhead resistance), 97.20 (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

Upside potential above the risings support coming in at 123.90 today. Need to break above the 126 level in the next few sessions to open for a rally towards 130. If it this doesn’t happen it should correct lower towards the 120 level. 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 the 130 level next.

Support: 123.90(interim rising support), 120.85 (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

Broke above the 1.30 level this Monday, but not able to sustain it above that 1.3050-60 level and it fell back below the 1.2800 level to signal a false break, at least so far. Keep in mind that the CAN unemployment data will be published on Friday, which can cause big moves. So for now the 1.3050 is the key gateway to higher levels.

Support: 1.2469 (rising support), 1.1759 (last reaction low), 1.1685 (rising support), 1.1460 (break out level)

Resistance: 1.3063 (Monday’s high)

EURGBP

The break above 0.9079 (Feb high) Monday, which brought end to the recent downtrend, now targets the January 26 2009 high of 0.9517. Key support remains the 0.8630 level.

Support: 0.8812 (rising support), 0.8630 (2009 low)

Resistance: 0.9517 (Jan 26 2009 high)

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Published on  Thu, Mar 12 2009, 06:16 GMT