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Currencies: Technical Strategies
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Has the Aussie Found Bottom?
Wed, Oct 22 2008, 20:29 GMT
by Andrei Pehar
The AUD/USD pair has shed over 3500 pips in a dramatic
sell-off which has lasted since July. Have we finally found a bottom?
Currently, the Aussie is ranging between the 161% Fibonacci level at 0.6537 and
the 138% Fib level at 0.7019 - what happens next very much depends upon which
side of this range price eventually chooses.
If we break above 0.7019 and successfully re-test that level as support, then
we may eventually see price rise to 0.7801
If, on the other hand, 0.6537 fails to hold as support, and we successfully
re-test that level from below as resistance, then we could well see price drop
further -perhaps as far as 0.5755, or if that level breaks, then 0.4491
Published on Wed, Oct 22 2008, 20:29 GMT
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Next Levels to Watch for the EUR/USD
Wed, Oct 8 2008, 21:08 GMT
by Andrei Pehar
The Euro has fallen sharply against the US Dollar in recent weeks, finally finding a bottom a few days ago at 1.3332, which corresponds with a 61.8% Fibonacci retracement from the all-time high of 1.6037
Where do we go next from here?
Currently, price is in the process of moving up to test the next Fib level at 1.3848, meanwhile the daily 21 exponential moving average is gradually working its way down from 1.4081 - what price does when it reaches that level will give some clues as to further direction.
A break above, followed by a re-test of support, means we will most likely go on to test 1.4365 next (perhaps eventually 1.5004). If, on the other hand, 1.3848 holds as resistance, then we could see price drop to re-test 1.3332 as support once again, perhaps eventually as low as 1.2597 if that fails to hold.
Published on Wed, Oct 8 2008, 21:08 GMT
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How to Catch the Next EUR/USD Move
Thu, Sep 25 2008, 12:16 GMT
by Andrei Pehar
The Euro has spent the past few days ranging against the US Dollar, after completing a perfect 61% to 161% Fibonacci move. How will we know when the next big move is under way?
The top end of the range is marked by a Fibonacci resistance level at 1.4708 - a break above this, followed by a re-test as support, would likely take us up to re-test the prior 1.4850 high, with a secondary target at 1.5078 should that break.
On the bottom, support is being provided by the 21 exponential moving average, and has gradually shifted from 1.4588 up to 1.4641. A break below these levels would likely take us down to 1.4480, perhaps 1.4452, with 1.4355 as a secondary target.
Published on Thu, Sep 25 2008, 12:16 GMT
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Yen Ranges Against US Dollar
Fri, Sep 19 2008, 01:19 GMT
by Andrei Pehar
The recent turmoil in the financial markets left many currency traders unsure of the next direction. This can perhaps best be seen in the recent price action of the USD/JPY pair, which is experiencing high volatility and a daily range with support at 104.13 and resistance about to be tested again at 106.73
If price can break above 106.73 then hold that level as support, we could see a move up with the next targets at 107.48 and 108.09; if not, then a bounce would likely bring us down to support at 105.52, 104.60, and perhaps ultimately again 104.13
Published on Fri, Sep 19 2008, 01:19 GMT
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Projected Bottom for the GBP/JPY
Wed, Sep 10 2008, 13:48 GMT
by Andrei Pehar
After hitting last month's targets and a brief retracement back up to test the 200 moving average as resistance, the GBP/JPY has resumed its downward movement.
Where will the unwind of the carry trade eventually leave us?
Our current projection, based upon a 38.2% Fibonacci retracement, is at 178.71, with price likely to encounter support along the way at 188.82 and 184.32
197.84 will likely act as resistance, capping off any surprise moves to the upside.
Published on Wed, Sep 10 2008, 13:48 GMT
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Where is the bottom for the GBP/USD?
Wed, Sep 3 2008, 16:36 GMT
by Andrei Pehar
1.7629 is a key level to watch on the Cable. So far, it has held as support - and now price is on its way back up to test 1.7851 as resistance. What happens next will be critical.
If price manages to break below 1.7629, and successfully comes back up to re-test that level as resistance, then we could see the drop continue as far at the 1.6943 to 1.6931 range.
If we can manage to stay above 1.7851, then we have seen our bottoms for now. If so, targets to the long side would be 1.8262 and 1.8421
Published on Wed, Sep 3 2008, 16:36 GMT
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USD/CAD − What's Next?
Wed, Aug 27 2008, 10:04 GMT
by Andrei Pehar
The Loonie has hit both of our targets from the prior week. Where is this pair headed next?
1.0445 is the key level to keep an eye on. A drop below, followed by a successful re-test as resistance, may bring further targets at 1.0358 and 1.0272 into view.
More likely, price will range between 1.0445 and 1.0553 a while, at least until we get some key inflationary data out of Canada on Friday.
A break above 1.0553, followed by a re-test as support, may mean we're on our way to test the prior high of 1.0727 once again.
Published on Wed, Aug 27 2008, 10:04 GMT
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Likely Bottoms for the Carry Unwind
Wed, Aug 20 2008, 12:16 GMT
by Andrei Pehar
The GBP/JPY pair is beginning to consolidate into a range - from 202.50 to 205.65
While another re-test of support at 202.50 seems likely, if that level breaks and then re-tests successfully as resistance, then we may see a move down to 200.10 or 198.90
If we break above resistance at 205.65, we should go to 206.59 and then come back down to re-test 205.65 as support. If price can hold above that level, then targets at 207.60, 209.18 or 210.75 come into view.
Published on Wed, Aug 20 2008, 12:16 GMT
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Time to Short the Loonie?
Wed, Aug 13 2008, 19:48 GMT
by Andrei Pehar
Has the USD/CAD finally formed a top? Perhaps.
Indications (both technical and fundamental) are certainly for a drop in the near-term. What happens in the longer-term very much depends upon on where this drop finds support.
Initial targets are 1.0539 and 1.0431
Published on Wed, Aug 13 2008, 19:48 GMT
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Majors Moving
Fri, Aug 8 2008, 10:14 GMT
by Andrei Pehar
Well, looks like we're in for another fun day today.
Big moves already
at the start of the European session. Oil is dropping slightly, and gold
by quite a bit - so far it looks like things are setting up for a Dow and
Dollar bullish day. Next support for oil should be 116.34, and for gold
at 856.31, meanwhile the Dow has support at 11363 and next resistance at 11702.
The USD/JPY has hit our target of 109.94 earlier today, the USD/CHF at 1.0760,
and the EUR/USD is almost there
- we're looking for 1.5104. The AUD/USD is also in a long-term fall,
which might go as far as 0.8809, 0.8773, or 0.8749. Pull-backs
could go to 1.0683 on the USD/CHF and 1.5141 on the EUR/USD, then we would
look for the Dollar bulls to return.
We have employment data coming out of Canada
at 11:00 GMT today, followed by nonfarm productivity along with labor costs out
of the US
at 12:30 GMT. Wholesale inventories will close out our week for us at
14:00 GMT.
If the US session
follows the European one, and assuming no upset from the news, EUR/USD
could see some extensions to either 1.5082 or 1.5045. Most significant is that the Euro has finally broken out of the 1.53 - 1.59 holding pattern it has been in since Dec. 2007.
Published on Fri, Aug 8 2008, 10:14 GMT
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USD/CAD − Have We Seen a Top?
Tue, Aug 5 2008, 14:31 GMT
by Andrei Pehar
The Loonie has been moving quite strongly lately as the Canadian Dollar continues to lose value against a US Dollar which has, for now, found some footing thanks to cooling oil prices. But a pullback today has everyone wondering if we've seen a top for this pair.
For now, perhaps - but longer-term there may be still room left to go.
We encountered resistance at the 127% Fibonacci extension at 1.0457, then bounced down to test 1.0411 - also another Fib level.
Overall, since the present move up began at a 61.8% retracement, we might (eventually) see it go as high as the 161.8% extension, or 1.0631 - however not before some cooling, which may bring us down to test support at 1.0321, or if that breaks then 1.0203.
On the climb back up, we might encounter resistance at 1.0457 again, and likely 1.0513.
Published on Tue, Aug 5 2008, 14:31 GMT
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USD/JPY − How Low Can It Go?
Wed, Jul 16 2008, 12:45 GMT
by Andrei Pehar
Next report will be publish on Wednesday August 6th
We've seen some pretty spectacular drops in many of the Yen
cross pairs these past few days. Are there more lows in store? For
the USD/JPY, the opportunity certainly exists, both from a technical standpoint,
and a fundamental one- but some cooling the upside first is a distinct
possibility.
We are currently riding along support at 104.01, which coincides with the round
number. Several longer timeframes are warning that we may be near the end
of the down cycle, at least for now. If a correction to the upside does
take place, logical areas for resistance would be 104.33, 104.98, and 105.83
If we break below 104.01 and continue to move downwards, then the current
target is 102.76, with support expected on the way at 103.61
Published on Wed, Jul 16 2008, 12:45 GMT
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GBP/USD Breaks Its Range
Wed, Jul 16 2008, 12:34 GMT
by Andrei Pehar
The GBP/USD has broken out of the range which it's been in
since December of 2007 to the upside. Now the question remains whether it
can sustain these levels, and where it might be headed next.
2.0005 is the key support which we currently find ourselves above, and longer
timeframes are suggesting some cooling to the downside is due to any new highs
being set. If 2.0005 should break, 1.9864 is where I expect to find the
next support.
If a new rally breaks out, then we may (eventually) be headed to 2.0374, with
resistance in the way at 2.0112, 2.0166 (this one knocked us down once
already), and 2.0233
Published on Wed, Jul 16 2008, 12:34 GMT
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GBP/USD − Still Ranging
Thu, Jul 10 2008, 11:08 GMT
by Andrei Pehar
The British Pound is still very much ranging against the US
Dollar.
There is a smaller range in play from the weekly S2 pivot at 1.9663 up to the
weekly M2 median at 1.9808, as well as a larger range which has been in place
since December 2007, which spans from the 0% Fib at 1.9336 to the 50%
retracement 2.0248
If price can break out of its current range to the upside, resistance is
waiting at 1.9874, 1.9953, and 2.0033; if price breaks to the downside, then
look for support at 1.9597, 1.9531, and 1.9336.
In the meantime, 1.9766 remains the central level which price is consolidating
around - and whether that ultimately ends up being our support or our
resistance may well help determine future direction.
Published on Thu, Jul 10 2008, 11:08 GMT
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USD/JPY at a Key Level
Thu, Jul 3 2008, 16:51 GMT
by Andrei Pehar
The Japanese Yen is currently standing at a key level
against the US Dollar, and which way it goes from here could well help
determine future trend/direction.
Currently price is squeezed into a tight range between the 50% Fibonacci
retracement level at 106.69 and the weekly central pivot point at 106.84.
Additional resistance is coming from the 50 moving average on the 4-hour chart,
and the 200 moving average on the 1-hour chart.
If price can manage to break above these levels to the upside, then additional
resistance is waiting at 107.09, 107.92, and 108.40
Once price finds its top and begins to move downward, support is waiting at
106.29, 105.79, and 104.98. The latter is once a again a key level, for
if that breaks (and re-tests as resistance) then a longer-term target at
102.87 may eventually come into play.
Published on Thu, Jul 3 2008, 16:51 GMT
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USD/CAD Update
Wed, Jun 25 2008, 20:57 GMT
by Andrei Pehar
The USD/CAD pair stalled inside the anticipated range for about 7 days before finally breaking out to the downside. Currently we are on our way to down to test support at 1.0070, and if that should break then 1.0010 below that. To the upside, resistance is waiting at 1.0129 and 1.0202
Published on Wed, Jun 25 2008, 20:57 GMT
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USD/CAD − How to Predict When a Trend May Stall
Wed, Jun 11 2008, 14:04 GMT
by Andrei Pehar
Next strategies will be posted on 25th June
Let's take a look at a couple technical indicators which may
have helped to predict the current stall in the most recent downtrend on the USD/CAD
pair.
First, we saw the completion of a Fibonacci pattern. Measuring the prior
down move which began at 1.0321 and came to an end at 1.0196, we saw that all
the counter-moves to the upside found resistance at 1.0244, or a 38.2%
Fibonacci retracement. Statistics tell us that when the downtrend
resumes, it will most likely go to 138.2%, or in this case 1.0148
And with the pattern completed, the next logical phase for price to enter would
be either a reversal, or a period of ranging or consolidation.
The second reversal signal came in the form of a bullish divergence.
Price made a new low from 1.01.96 to 1.0148, meanwhile our indicator underneath
(which can be MACD, OsMA, momentum, or any other indicator from the
trend-following group), failed to follow through and make a new low as
well. This tells us that the downtrend is gradually losing steam and a
reversal (or at least and end to the move) is imminent.
What's next for this pair?
Price will likely settle into a range somewhere between 1.0148 and
1.0196 If we break that range to the up-side, then look for
resistance at 1.0226, 1.0244, and 1.0288 If we should break below
1.0148, then look for support at 1.0119 and 1.0071
Published on Wed, Jun 11 2008, 14:04 GMT
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What's Next for the Swiss Franc?
Fri, Jun 6 2008, 16:09 GMT
by Andrei Pehar
USD/CHF has found itself in a range the past few weeks, with 1.0200 on the bottom and 1.0545 at the top. We are currently testing the 1.0200 support once again, and what happens next could well determine the future long-term direction of the Swiss Franc against the US Dollar (which is currently under heavy pressure due to poor employment data, rising oil prices, and a dropping Dow).
If 1.0200 breaks and then holds as resistance, the next support levels are waiting at 0.9987, then 0.9643. The latter is a critical level, and if price breaks below that and continues to drop, then we could (eventually) see it go as low as 0.8741
If instead we get another bounce UP from 1.0200, then we'll likely encounter resistance between 1.0333 and 1.0373 on the way back up to 1.0545. If that key level breaks and continues to hold as support, then we could be headed to 1.0790.
Published on Fri, Jun 6 2008, 16:09 GMT
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AUD/USD − Clues to Next Direction
Thu, May 29 2008, 17:01 GMT
by Andrei Pehar
One week later, the Aussie vs. the US Dollar remains in the range between 0.9539 and 0.9645
If support at 0.9539 breaks (and re-tests as resistance), then we could continue down to test 0.9400, or even 0.9315 below that.
If price can bounce off this support level and go on to break the resistance at 0.9645 (re-testing it again as support to confirm), then we could see 0.9697 or 0.9763 tested next.
Published on Thu, May 29 2008, 17:01 GMT
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AUD/USD − More Highs on the Horizon?
Thu, May 22 2008, 21:56 GMT
by Andrei Pehar
The Australian Dollar is continuing its slow but steady climb up. How much more is in store?
Looking back to where the prior leg of the uptrend which began on March 31st, we see a move up from 0.9029 to 0.9539. Price then retraced 50% to 0.9284 before turning back upwards. This suggests a likely target might be 0.9854 - but first price needs to find support at either 0.9539 or 0.9465, then break through resistance at 0.9631, 0.9677, and 0.9734.
Published on Thu, May 22 2008, 21:56 GMT
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EUR/JPY Cools Slightly After Reaching Target − More in Store?
Wed, May 14 2008, 20:20 GMT
by Andrei Pehar
The Euro / Japanese Yen pair just completed a Fibonacci move which started at 158.61, climbed to 161.68, then retraced down to 160.51 (38.2% retracement), and finally rallied up to 162.86 (138.2% extension).
There was a brief test of the 50% Fib and weekly pivot at 160.15 leaving a long wick on the 4-hour chart, which implies that we could have a secondary target still waiting at 163.58 (161.8% extension), however first price needs to find strong support at either 162.24 or 161.68
Published on Wed, May 14 2008, 20:20 GMT
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Yen Completes Fibonacci Pattern
Wed, May 7 2008, 21:03 GMT
by Andrei Pehar
The Japanese Yen recently completed a Fibonacci pattern starting with a low of 95.74 on March 13th, a high of 102.84 on April 1st, a 38.2% retracement to 100.13 on April 9th, and now a 138.2% extension to 105.55
We have since cooled a bit, coming to a rest at the weekly pivot at 104.77 (a level that also corresponds with the 127% Fib). Which side of it we continue to trade on in the days ahead may be an indication of future direction.
Support is below at 104.12, 103.86 and 102.84; meanwhile resistance is waiting above at 105.55 and 106.34 There is a bearish divergence on the daily chart, and both weekly and daily stochastics are beginning to enter a bearish phase as well.
Overall there is a range being established between 105.55 and 104.12, a break-out of which may well be the key to what lies ahead.
Published on Wed, May 7 2008, 21:03 GMT
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Dollar Rallies − Likely Support Levels for EUR/USD
Thu, May 1 2008, 20:07 GMT
by Andrei Pehar
The US Dollar had another strong rally today, despite another round of less than positive economic data. The rising Dollar is pushing the EUR/USD pair down, as less Dollars are needed in exchange for each Euro.
The prior drop took us precisely down to the 23.6% Fibonacci retracement, which then proceeded to act as resistance for an entire week. Today's drop ended at 38.2%, and currently price is taking a breather and slowly retracing back up from there.
1.5415 now remains a key support level to watch. If price begins to move up, then look to 1.5646 to act as resistance once more. If price breaks below 1.5415, then look for it to find support at 1.5229, 1.5043, or 1.4778.
Published on Thu, May 1 2008, 20:07 GMT
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GBP/USD: Key Levels to Watch
Wed, Apr 23 2008, 13:00 GMT
by Andrei Pehar
The British Pound is still very much in a range against the US Dollar, one lasting over 4 months now. While that range is quite large (1.9541 - 2.0160) and provides lots of great trading opportunities, it is still well worth being aware of the key levels.
The fact that 1.9851 has failed to hold as support (along with the weekly 21 exponential moving average) suggests that our bottom at 1.9541 may be tested again some time in the future. If that fails to hold as support, we could see prices (eventually) as low as 1.9101
If price can manage to pull itself back above the 1.9851 mark on the other hand, then a rally to 2.0160 could follow (much depends upon whether we see more negative housing news out of the UK, or whether oil continues to set new highs and puts new pressure on both the Dow and the Dollar). Price would need to be above 2.0542 to convincingly show signs that a new long-term bullish trend is emerging.
So, for now, 1.9851 remains the critical level to watch.
Published on Wed, Apr 23 2008, 13:00 GMT
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EUR/USD Completes 8−Year Fibonacci Pattern
Wed, Apr 16 2008, 21:06 GMT
by Andrei Pehar
The EUR/USD has just completed a major Fibonacci pattern, one which has been evolving since Dec. 1st, 2000. The first leg of the rally started at 0.8225 and completed at 1.3668, near the end of 2004. The retracement which followed lasted 16 months, and took us down as far as 1.1589 (or 38.2%). Price is currently hovering just above the 138.2% extension.
Does this signal the end of the Euro's bull run against the Dollar? Certainly, 1.60 is a key level both psychologically for many traders, and especially for the governors of the European Central Bank. At the same time, however, all economic reports are still pointing towards a period of inflation for Europe, and the possibility of recession in the United States.
A clue to the future may perhaps lie in a pennant pattern which has been evolving for the past 4 weeks. Today's trading broke that pattern to the upside, signaling a potential run up to test the critical 1.60 level. While that may well hold as resistance on the first try, if 1.5747 also continues to hold as support then it may well signal the start of a new bull rally.
Published on Wed, Apr 16 2008, 21:06 GMT
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Key Levels for EUR/USD
Wed, Apr 2 2008, 19:58 GMT
by Andrei Pehar
According to insiders, the ECB has supposedly pledged to
"protect" the Euro from rising above 1.60 against the US Dollar,
though for now it has shown difficulty sustaining levels above 1.59 (perhaps precisely
due to this rumor). Where the EUR/USD heads next depends largely upon
what happens at the key levels it currently finds itself sitting upon.
1.5656 represents the intersection of the weekly pivot, as well as both the 50
and 200 moving averages. We also have the daily central pivot providing
support at 1.5609, and the S1 pivot below that at 1.5534 Looking above,
we find resistance waiting at 1.5685, 1.5760, and 1.5836 The technicals suggest it is time for a
cooling (as evidenced by the double top on the daily chart), meanwhile the
fundamentals seem to suggest a resilient European economy (led by Germany) and
further troubles ahead for the United States.
Overall, there is a strong range between 1.5757 and 1.5380 which has been in
place for 4 weeks now, and all longer-term Fibonacci moves have now reached
their logical conclusions. Recommendation is to continue to trade the
range, playing close attention the support and resistance levels inside, until
we see a break outside confirmed with a re-test (resistance becomes support,
and vice-versa).
Published on Wed, Apr 2 2008, 19:58 GMT
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Dollar Rally Ends − Right on Target
Wed, Mar 26 2008, 21:59 GMT
by Andrei Pehar
The US Dollar experienced a short rally last week, which came to an abrupt ending after the Easter holidays. However the reversal came as no surprise for technicians, as it occurred at precisely at the same key Fibonacci level on just about every major Dollar-cross pair.
USD/JPY
Against the Japanese Yen, we saw the Dollar rally to 101.02 (38.2% Fib) after previously dropping a low as 95.74 We now expect to see the next support at 98.64 and 95.74, and if price can break below that then 93.53, 92.42, and eventually 91.04 are the next targets. However there are also rumors on the market that the Bank of Japan will intervene to "protect" any prices below 95.00, so this level needs to be watched especially closely.
EUR/USD
Looking at the Euro against the Dollar, we see a very similar situation. Here, the US Dollar managed a brief recovery from 1.5902 to 1.5344 (also the 38.2% Fib). If price can break above the prior high of 1.5902, then we can expect to see the next resistance at 1.6165, 1.6297, and eventually 1.6460 Caution is needed here as well, as the European Central Bank has also pledged to intervene, should prices rise above 1.60
USD/CHF
Against the Swiss Franc, the US Dollar managed a recovery from 0.9643 up to 1.0202 (you guessed it, 38.2% Fib). If the current drop takes us below the prior low if 0.9643, then support is expected at 0.9380, 0.9248, and eventually 0.9084
Published on Wed, Mar 26 2008, 21:59 GMT
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New Rally for the Aussie Dollar?
Wed, Mar 12 2008, 16:26 GMT
by Andrei Pehar
Given the recent performance of both the Australian economy and the Australian Dollar, as well as the high interest rates Down Under (not to mention all the troubles brewing in the US), one could only expect that any cooling on the AUD/USD pair would be short-lived.
But do two consecutive days of gains really mean we've found a bottom for now, and that a new rally is about to take off? Let's take a closer look...
Tracing a Fibonacci pattern which began at the low of 0.8511 on January 24th of this year, and completed at the recent high of 0.9496 on February 29th, we see that the most recent drops repeatedly found support at 0.9264 (or a 23.6% retracement). Price managed to break below this key Fib. level only once, on March 11th, but 0.9264 failed to hold as resistance on the way back up.
As long as 0.9264 continues to hold as support, we can expect further gains in the days ahead. The next big test will be the resistance at 0.9496 - and if we manage to break above that then targets at 0.9673 and 0.9762 come into play.
If price breaks below 0.9264, then we would look for it to find support at 0.9120 or 0.9003 (any break below the 9000 mark is likely to find buyers at 0.8887).
Published on Wed, Mar 12 2008, 16:26 GMT
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Will the Dollar Slide Further Against the Yen?
Mon, Mar 3 2008, 15:57 GMT
by Andrei Pehar
The US Dollar has been in decline against the Japanese Yen
since June of last year. But after the accelerated drops seen throughout
last week in the USD/JPY pair, today saw a bit of a rally. Does this
signal the end of the drops, or just a momentary pause?
The USD/JPY is currently near a key Fibonacci level, and stochastics are
hinting at turning upwards. If Bulls manage to wrestle temporary control,
we could see price rising to test resistance at 104.00 and then 104.95
As far as how low we could see it go, if support fails to hold at 103.21, then
a 38.2% retracement suggests that the extension could ultimately go to 138.2%,
or 101.25
Published on Mon, Mar 3 2008, 15:57 GMT
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Euro Consolidates Against the Dollar
Mon, Feb 25 2008, 14:47 GMT
by Andrei Pehar
The EUR/USD pair has been in a consolidation pattern for the
past 4 months. This is normal, considering the bullish rally which has
persisted for the past 2+ years, as well as the key 1.50 level which we
presently find ourselves hovering just underneath of. A break above that
level could well usher in a new bull rally, perhaps even new era for the Euro
itself, along with even further lows for the tumbling US Dollar (think
"new reserve currency").
With all this at stake, it is only natural for the price to hesitate a while
just under that level. However the pattern currently emerging is clearly a
flag/pennant, with the support level slowly (but steadily) ascending and
pressuring price to the upside.
Look for a break (and re-test as support) of 1.4860 to the upside, or a
break (with re-test as resistance) of 1.4550 to the downside to get a
clue as to where the EUR/USD may be headed next. In the meantime, there
are plenty of pips still to be made by trading inside of this range, with the
21-period exponential moving average currently providing additional support at
1.4710
Published on Mon, Feb 25 2008, 14:47 GMT
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Which Way for the Swiss Franc?
Mon, Feb 18 2008, 14:27 GMT
by Andrei Pehar
The Swiss Franc is currently trading inside of a range that has held it trapped for over 6 weeks, stretching from 1.0887 on the downside to 1.1104 on the ceiling.
This range is quite significant, as a break below 1.0887 would signify new-found strength for the Swissy against the US Dollar, and a possible run down as far as 1.0283 (138.2% Fib. extension). A move which is supported fundamentally, as interest rates continue to decline in the US and rise in Switzerland, as well as by the Franc's reputation as a safe haven during times of economic and political uncertainty.
But the technical indicators suggest that we could see a small rally up before the next major bear move on this pair. There is a bullish divergence being traced between the most recent low of 1.0739, and the MCAD underneath which failed to post a similar low. Additionally, if price can manage to stay above 1.1018, which is where last several weekly candle bodies have closed, it will give bulls added confidence.
Such a move up is likely to find its next resistance at 1.1260 - but first it will have to find the strength stay above 1.1018, and then break above 1.1104
Published on Mon, Feb 18 2008, 14:27 GMT
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Yen in a Range Heading Into Tonight's News
Tue, Feb 12 2008, 18:57 GMT
by Andrei Pehar
We have two reports due out of Japan tonight - the CGPI y/y and the Current Account, both due out at 23:50 GMT.
Leading up to it, we find that that the USD/JPY pair has
been trading within a range throughout most of the day today. On the
upper side, we have resistance at the M4 median at 107.50, combined with the
psychological effect of the round number. On the bottom, we've been
finding support at the 0% Fib. at 107.23
Ideally, we'd see price break out to either side of this range, with a break of
107.50 followed by a re-test as support possibly signaling a long, meanwhile a break
below 107.23 with a re-test as resistance signaling a short. If trading
within the range, then be cautious of the 21 EMA at 107.40 and the R1 pivot at
107.31 providing midway support and resistance levels as well.
Published on Tue, Feb 12 2008, 18:57 GMT
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GBP/USD Developing Flag Pattern Heading Into ISM News from US
Wed, Feb 6 2008, 14:45 GMT
by Andrei Pehar
Update: Leaked ISM numbers have broken our upper trendline to the upside!
The Cable dropped since trading opened in London this morning, followed by a brief rally in response to PMI data out of the UK. Price is currently consolidating in a range between support at the S1 pivot point (1.9669) and resistance at the M2 median (1.9699). It is also being gradually pushed downward by its declining 50 simple moving average, forming a flag/pennant pattern. This is a Bearish pattern.
At the same time, there is a Bullish divergence forming between price and the MCAD histogram. The best way to play this situation would be to trade the range using stochastics, until a clear breakout occurs (perhaps inspired by ISM news due out of the US at 10:00 EST, or perhaps before). Once you have a clear breakout, then wait for a re-test (either support becomes resistance, or resistance becomes support) and look for trades in the direction of the break.
Published on Wed, Feb 6 2008, 14:45 GMT
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The GBP/USD Picture Following Today's News
Wed, Feb 6 2008, 14:41 GMT
by Andrei Pehar
The Construction PMI coming out of the UK today (53.9 vs. 55.0 forecast and 56.0 the previous month) failed to make a huge impact on the price of the Cable. Instead, what we've seen since London opened this morning is a steady climb upwards on this pair.
On Friday we had some rather disappointing NFP numbers out of the US, followed by industrial numbers which beat expectations. The latter caused the Dollar to rally, and the GBP/USD pair to fall. What we've experiencing now, after everyone's had the weekend to digest the news, is a return to levels which better represent the underlying economic picture.
The GBP/USD has successfully crossed to the upside of its central daily pivot at 1.9747, and thus far has managed to stay north of its 21 EMA as well. Now it needs to clear resistance at 1.9780, which is the prior high and also the top of this morning's opening range. If it successfully breaks that resistance level and re-tests it as support, we could see a run up to the 161.8% Fib level, which is 1.9850
If price breaks below the central pivot at 1.9747, then the next support levels are at 1.9724 (prior low and also the 50% Fib retracement) and 1.9683 (200 SMA and 86% Fib).
Published on Wed, Feb 6 2008, 14:41 GMT
Archive
- Has the Aussie Found Bottom?
Published On Wed, Oct 22 2008, 20:29 GMT - Next Levels to Watch for the EUR/USD
Published On Wed, Oct 8 2008, 21:08 GMT - How to Catch the Next EUR/USD Move
Published On Thu, Sep 25 2008, 12:16 GMT - Yen Ranges Against US Dollar
Published On Fri, Sep 19 2008, 01:19 GMT - Projected Bottom for the GBP/JPY
Published On Wed, Sep 10 2008, 13:48 GMT
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