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Forex Economic Analysis

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Forex Technical Analysis on Majors

Mon, Jul 14 2008, 09:04 GMT
by Stoyan Mihaylov

www.deltastock.com

• EUR/USD

Current level-1.5881

EUR/USD is in an uptrend from recent bottom at 1.5301, that was the final of the prolonged consolidation since 1.5909 (17 March 2008). Technical indicators are slowly rising and trading is situated above the 50- and 200-Day SMA, currently projected at 1.5609 and 1.5095.
   

The sharp Friday's advance beyond 1.5909 has denied our idea, that a there is one more swing to come, down to 1.5584, as a third part of the consolidation pattern since 1.5909. Now its obvious, that the uptrend from 1.5301 has been renewed, heading for a beak above 1.6019, en route to 1.6566 as we stated in our Monthly Forecasts. From an intraday point of view, there is a consolidation unfolding from local peak at 1.5969 and we expect it to be limited above 1.5827 before continuation of the current impulse.

Today's strategy: Buy on dips to 1.5837, add on a break above 1.5890, stop below 1.5801, targets seen at 1.6019.

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• USD/JPY

Current level - 106.74

The pair is in a corrective uptrend from the 95.75 short-term bottom. Technical indicators are flat and the upmove is dynamically supported at 104.74. The inner structure of the rise is by all means a corrective one, so from a larger point of view the overall downtrend from 124.14 is not over yet.  

The expected break below 106.83 managed to initiate sell-off to as low as 105.69, few pips below 105.79 support. We think, that a consolidation is unfolding since and it should be limited below 106.83 before next leg unwinds downwards to 103.83.

Today's strategy: Stand aside while above 106.21.

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• GBP/USD

Current level- 1.9761

The pair is in a broad consolidation above 1.9338 and below 2.0397. Technical indicators are flat on the higher time-frames and trading is situated between the 50- and 200-day SMA, currently projected at 1.9685 and 1.9982.
 

Choppy trading above 1.9791 and it looks like we're still in the consolidation pattern since 2.0007 top, but only a break below 1.9753 will confirm this idea. Trends on 1 and 4 h. charts are up, so while the pair stays above 1.9791, an upward attempt towards 2.0007 is more reasonable to be expected. In our view this ranging doesn't look attractive for short-term trades, so we are rather neutral and will stand aside until the sky clears up.

Today's strategy : Stand aside.

Published on  Mon, Jul 14 2008, 09:09 GMT