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(NO) Daily Technical Outlook

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Daily Technical Outlook

Fri, May 30 2008, 06:23 GMT
by William Basa

Global Market Research, Inc. (GMR)

OVERVIEW:

The USD rally made good contact with the combined June/Q2/Q3 sell zone from 105.54 to 106.35JPY yesterday. With the bullish turn in daily trend, a further push into that area is expected today. As long as 106.35 holds, the intermediate setup is neutral back to 102.56/12. $/Swiss is also pushing higher, with its June level at 1.0540 (exit longs) and larger weekly/Q3 zone at 1.0690/1.0715 (set shorts). At the same time, the USD remains negative vs CAD and Aussie, with weekly trend still bearish and openended developing setups under .9911/24CAD and above .9555/51 to .9511 in Aussie.

JPY/USD

Weekly Outlook – Neutral. $/JPY has rallied right into the primary sell zone of May level at 105.54, Q2 level at 105.85 and developing Q3 level at 106.35. Weekly trend is going to stay neutral (corrective) and long as the USD stays under that area, the overall setup is balanced as well. Supports for next week are forming at 103.56, 102.56 and the developing June uptrend at 102.12. Daily trend is still bullish above 104.62. Strategy remains to add/hold shorts against 106.35 for minimum target of 102.56/12.

Daily Comments – Bullish to neutral. Daily trend is bullish, but with overall neutral setup due to the longer-term levels at 105.54, 105.85 and 106.35. First day resistance is 106.44. Main day support is the 104.66/62 daily uptrend with 103.90 and weekly level at 103.56 below. Expecting a two-way day from 105.85 to 105.66/62. A stretch to 106.35/44 is possible

Position Strategy: Currently 50% short at 105.69 average after selling 105.54 and 105.85 Thursday. Add to 100% short at 106.35 – stop on close above 106.40. The minimum target is 102.56 to 102.12.

CHF/USD

Weekly Outlook – Neutral. Still no big change to this point. Weekly trend is going to stay neutral (corrective), with a balanced setup forming for June. The short-term rotation higher now targets the fixed June level at 1.0540 or higher weekly/Q3 zone at 1.0690/1.0715. Supports for next week are 1.0305, 1.0225 and developing monthly trend at 1.0210/05. Daily trend is also bullish and intersects at 1.0370 today. Strategy is to exit the remainder of longs at 1.0540; will wait to sell 1.0690/1.0715.

Daily Comments – Bullish to neutral. Daily trend turned bullish yesterday, but upside is partially neutralized today by the fixed June level at 1.0540. Above there is intraday gap to 1.0630. Supports are 1.0470, daily trend zone at 1.0375/70 and 1.0310/05. Expecting a two-way range from 1.0375/70 to 1.0540.

Position Strategy: Currently 25% long at 1.0215/00 after exiting ½ at 1.0500 yesterday. On weakness, reset to 50% long at 1.0210/05 – stop on close under 1.0200. On strength, exit the rest at 1.0540; will move 50% short at 1.0690/1.0715.

Pound

Weekly Outlook – Neutral. Still not any conclusive directional shift here - though the market has stayed below the key developing June levels at 1.9755 to 1.9790 to 1.9870. An additional fixed weekly level at 1.9885 reinforces the ceiling on the market. As long as that holds, the overall setup is neutral. Above 1.9870/85 is jump to 2.0235. Support for next week is 1.9655/45, then drops to 1.9490. Hold existing shorts against 1.9885; cover part at 1.9655/45; hold rest.

Daily Comments – Neutral. Daily trend fell from bullish to neutral Thursday, leaving an overall balanced setup. Resistance is 1.9790/95, 1.9860 and the key June/weekly zone at 1.9870/85. Supports are 1.9700 and weekly/day zone at 1.9655/35. Expecting a 1.9860 to 1.9655/35 day range.

Position Strategy: Currently 50% short at 1.9780 average. Stop on close above 1.9870. Cover ½ at 1.9655/35; hold the rest. Day Trade: sell 1.9860/85; cover day shorts/buy 1.9655/35.

European Currency Unit

Weekly Outlook – Neutral. Euro has performed poorly this week, with the retreat behind both the June level at 1.5620 and the level that turns weekly trend bullish at 1.5555 removing any positive bias. The overall setup now looks neutral. Resistance is June level at 1.5620, developing weekly level at 1.5740, then jumps to 1.5995. Supports are combined June/weekly zone at 1.5395/80, before drop to 1.5165. Expecting 1.5395/80 to 1.5740 range action over the next week. No new position strategy for now.

Daily Comments – Bearish. Daily trend turned bearish Thursday, and the setup today points lower. Resistance is 1.5570, the fixed June level at 1.5620 and daily trend zone at 1.5635/50. There is no support until the combined June/weekly zone at 1.5395/80 and first day level at 1.5370. Expecting a 1.5570 down to 1.5395 day range.

Position Strategy: Currently flat after stopping the longs on close under 1.5555. No new position trade for now. Day trade: be better seller of strength to 1.5570 and 1.5620/50. Cover day shorts at 1.5395/80/70.

CAD/USD

Weekly Outlook – Bearish. Weekly trend is going to stay bearish and both the developing weekly and June setups are open lower at this point. The key developing resistance levels are clustered at .9905 (June) to .9911/24 (weekly), with developing weekly trend at .9946. Above there finds minimum relief to June/weekly zone at 1.0048/69. The closest fixed support is the Q2 level at .9700. Strategy is to add shorts at .9924 against .9946 for trade to .9700 target.

Daily Comments – Neutral. The day setup is a pick‘em type. But the fact daily trend fell neutral Thursday and the weekly setup is open-ended under .9905/11 points lower. Main resistance is the weekly levels at .9904/11 and .9924/46. Support under .9886 drops to .9760 minimum. Based on the weekly bias, projecting a .9905/11 to .9760 day range.

Position Strategy: Currently 25% short at .9904/12 from Thursday. Add to 50% short at .9924 – stop on close above .9946 . The target is .9700. Day Trade: sell against .9911 and .9924; cover at .9760.

Australian Dollar

Weekly Outlook – Bullish to neutral. Aussie is still dancing around its Q2 breakout level at .9594. But weekly trend is going to stay bullish and both the developing weekly chart (above .9555/51) and developing June (above .9511) setups are open higher. Both those areas are the main support and present the best structure to trade against. Under there is drop to .9441 for next week. Resistance is forming at .9617, then jumps to .9757 for next week. Will add/hold longs against .9511.

Daily Comments – Neutral. Daily trend is still neutral, with a widespread setup resulting from Thursday’s outside range. But additional weekly supports at .9555/51 and .9511 make the market better bid. Day supports match up at .9549 and .9504. Resistance today is .9617 and day zone at .9649/53. Expecting a .9511 to .9649 day range.

Position Strategy: Current 25% long at .9543/41 from Thursday. Add to 75% long at .9511 – stop on close under .9500. No upside target for now. Day Trade: buy .9555/49 and .9511/04; exit day longs at .9617 and .9649.

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Published on  Fri, May 30 2008, 06:32 GMT