• Our last technical update noted that the USD/CAD currency pair had found support at the convergence of technical support around parity.  This was comprised of the following technical elements.
  • Ascending trendline support, which had initiated from the 2012 low.
  • The 200-day SMA (simple moving average).
  • The midpoint of the last key swing higher from September (the 50% retracement area).
• This was followed by a bullish engulfing candle near the key round number area.  Price has subsequently moved around 200 pips higher since the last update to hit a high of 1.0311 on Friday.
• The upside move has been capped at the descending trend line area as per the daily time frame chart below.
• Price action around this prior supply zone circa 1.0290 – 1.0330 is seen as key in the near term to gain a directional bias on the “Loonie”.

• The euro/dollar pair experienced an extension of the prevailing downside trend on Friday, moving to a low of 1.2795, before retracing to the two day low area from Wed/Thur around 1.2840 – a longer term price pivot zone.
  
• Price is now threatening to take out prior support around the 1.2745 area.
• The 61.8% Fibonacci retrace of the longer term swing higher follows as a technical area of interest around 1.2680.
• Large speculators had increased the net short EUR position by over 40% on the weekly basis according to the latest COT report data, to hit $7.6 billion for the specified reporting period and -46,291 versus -33,533 net short contracts.
• This comes as the dollar index has managed to print a weekly close above prior USDX 84.00 area resistance.  With the highest weekly close since mid-2010, largely fulled by dollar strength versus the Japanese yen.
• Any corrective move higher for the EURUSD could potentially see an element of resistance around the following areas: the 1.2875 pivot area, the 1.2930 zone (prior support to potential resistance), and the key 1.3000 handle round number area.

• Our recent analysis has focused on the USDX 84.10 area – a key dollar index technical level.  Price has been testing this area over the past two days but has not yet managed a close over previous resistance.
  
• We note that the 84.22 area swing high from Wednesday was the highest dollar index level seen since July 2010.
• There is potential for additional rangebound trading in the near term with the aforementioned 84.22 area as resistance and the 83.42 zone as possible support. 
• The above comes as the key EURUSD pair is trading around 1.2840, closing the 16th May as an inside day.  A sustained break out of this inside day could potentially set the near term directional bias for the USDX.
• We also note that gold is trading at the 1385 area – after seeing extended bearish price action this week – with gold futures experiencing a 6% loss over six trading sessions.  The key S&P500 index printed the first down day this week, closing around the 1648 mark.

• Cable has moved to a low of 1.5171 on Wednesday, covering 104% of the average daily range, before paring earlier losses and consolidating around the days open at 1.5223.
  
• The 1.5125 area 61.8% Fibonacci level is an initial focus, for the 16th May trading sessions, should the recent bearish price action continue.
• Wednesdays high was capped at the price pivot zone around 1.5265, this remains as a near term upside technical level of interest.  
• A close around the current GBPUSD level would represent a doji candle, showing indecision as this currency pair consolidates around the 1.5225 previous demand level.
• The above comes in the context of cable breaking below the ascending channel on Monday – as per the daily timeframe chart below.

• Our previous update noted that the failure, on Friday, to close under previous support could potentially see the euro/dollar pair retest the area around the 200 period SMA; squeezing the weaker euro shorts during early week trading.  We noted that the 200 SMA was roughly aligned with prior support lows around 1.3030; price did indeed move to a high of 1.3028 today prior to the drop down to the current 1.2940 area.
• This 1.2940 areas is aligned with Friday’s low and the 61.8% Fibonacci retrace as shown on the D1 timeframe chart below.
• Any extended move lower going forward has the 1.2875 area as a potentially supportive technical point of interest.
• A failure to see a sustained move below 1.2935 may see the key currency pair consolidate between this level and the aforementioned 1.3030 area.  
• We will also be monitoring the dollar index 84.10 area for potential resistance, this area marks the highest point for the USDX since July 2010.

• Cable experienced a strong drop from the 1.5600 confluence area on Thursday, after seeing an extended period of consolidation around the 50% retrace and upper channel line. 
• Price subsequently dropped as low as 1.5312 on Friday, piercing the lower channel line, before closing back above this technical point of interest.
• Any continuation of the move lower has the 50% retrace and previous swing low around 1.5200 as a key focus.
• If cable can correct higher the 1.5500 round number area is an initial potential resistance level we will be monitoring heading into the new week.
• The above comes in the context of the monthly timeframe GBPUSD pinbar (see fig 2) which formed after the 1.4830 low printed in March.  This pinbar came after price dipped under the 1.5260 pivot on the lower timeframes but ultimately closed above this area.
• 1.5260 is still a key level for this pair and could potentially prove to be a price pivot once again if hit.  
• The US dollar index has taken out previous USDX 83.42 area resistance, but ultimately closed the week under the recent range high point.  Price action on the USDX,  around previous resistance, could be key in the near term.

• The dollar/swiss currency pair has seen a breakout above the recent range consolidation area, and the descending trend line, as per the USDCHF daily chart below.
• This breakout was likewise a move up through the 0.9500 psychological round number area, a level which has acted as a price pivot zone as recently as late April.
• Any corrective move lower has the 0.9500 area as potential support in the first instance. Further to this is the 200-period SMA around 0.9350 – which also marks a minor prior swing low.
• We note that Thursday’s candle gave a bullish engulfing day.  It would take a move below the low of this candle around 0.9330 to invalidate this price action. 
• The above comes as the EURUSD pair has broken below previous 1.2950 area support zone, but ultimately closed the week near the 1.3000 round number.  A strong move back below the 1.2950 area would add additional support to a USDCHF upside continuation.
• We also note that the USDX has mirrored the USDCHF and taken out previous 83.42 dollar index resistance, but closed the week under the recent range resistance.  Price action around 83.42 could help with a directional bias for the Swissie.

USDCAD Technical Update – Convergence Of Technical Support Around Parity

• EURUSD broke below previous 1.2950 area support on Friday but closed the day (and week) back near the 1.3000 round number area.  The key currency pair has dropped almost 300 pips from the early May swing high around 1.3250.
  
• The failure to close under previous support may see the euro/dollar pair retest the area around the 200 period SMA and squeeze the weaker euro shorts during early week trading.  The 200 SMA is roughly aligned with prior support lows around 1.3030.
• We also note the US dollar index has taken out previous USDX 83.42 area resistance, but ultimately closed the week under the recent range high point.
• The latest COT (Commitments of Traders) report CME (Chicago Mercantile Exchange) reveals that large specs had added to the net euro short position as of May 7th.  This  data showed a net short EUR FX position around -33,5k contracts as of Tuesday, in comparison to the previous week’s  -30k position.
• Any continuation of the move lower could potentially see an element of support around the 1.2875 area price pivot zone, the previous resistance level from early April.  Further to this is the 1.2744 area swing low, which was last hit prior to the move back up to the 1.3200 resistance zone.

EURUSD Weekly Technical Report.  Euro/Dollar Outlook 5/13/13

(Dollar/Yen Technical Update 8/5/13, Forex-FX-4X.com)

• Dollar/Yen is trading around 100 pips under the key psychological 100.00 round number area and is caught in a consolidation range as the market seeks near term direction and profit taking weighs on the pair.
• Wagers on a continuation of the weak yen scenario are at the lowest level seen since the currency’s drop in value gained traction in November, according to the latest data from the CFTC (Commodity Futures Trading Commission).
  
• Price is now trading marginally above the converging Tenkan Sen and Kijun Sen dynamic levels which are located around the 97.80 – 98.20 zone.
• Further to this is the recent support low from 30/4/13 around 97.00.  The previous resistance area around 96.70 is located just under this level and sits just above the 50% retrace of the last major swing higher.  
• Key previous support is seen around the 92.50 area, a major USDJPY demand area on the 4/4/13.
• We also note that EURJPY is trading just under the 130.00 round number, after the three prior attempts to sustain above this area have failed to see the follow through associated with other recent rallies for the pair.

USDJPY Analysis 8/5/13