EURUSD

Trading strategy: stand aside

The euro continues to face weakness against the dollar, trading near multi-month low reached Friday at 1.3585, as a result of another sell-off round following U.S. unemployment data – NFP coming at -20k and the unemployment rate at 9.7%, beating the 10% expectation. Short term and intra-day charts remain into the bearish territory and near term resistance levels may limit gains at 1.3720 – falling trend line which provided support on two corrective cycles, followed by 1.38 and 1.3850/60. A sustained break above 1.3850 would signal a change in current short-term structure, but while the euro is heavy near the 1.35 region – gains to 1.3850 should be hard to achieve – as rallies are facing strong selling since December. In case of more losses – support starts at 1.3585/90, backed by 1.3550 and 1.3500. 1.3480 which is a notable support formed by the 61.8% of last year’s full rise comes lower – around 1.3480. Current exchange rate is 1.3640 @07:24 GMT

Support: 1.3585/90, 1.3550 and 1.3500
Resistance: 1.3700/20, 1.3750, 1.3800 and 1.3850/60
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: stand aside

Downside pressure remains high and the support region formed by the falling trend line coming from .7080 – now around .6860 – seems fragile and a break down should open .6550/00 – key support and former resistance last year, formed by the median retracement of the full decline from 2008 to 2009 (.8215 to .4890). Potential gains may be limited into resistance region around .6980/00 – former support and median retracement of last down leg / last week’s range. Short-term sentiment is bearish while the intra-day charts are neutral. Current exchange rate is .6872 @07:24 GMT

Support: .6850/60, .6800 and .6750
Resistance: .6900, .6980/00 and .7050
Market sentiment: long term – bullish, medium term – slightly bearish, short term – bearish, intra-day – neutral

Have a great day!

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Post tags: eurusd, nzdusd

This short article aims to support once again the “keep it simple” principle and the fact that you do not need a complex solution to answer a simple question. A simple solution is less time consuming, therefore allowing you to allocate your time other activities.

The question that always comes in my mind is why would someone use a lot of technical studies to identify something clearly visible?

Do we need a light meter to know if it’s day outside? – nope.
Do we need to calculate gravity before throwing a rock off a building? – No. We know it will fall fast …and someone might get hurt.
Do we know where the left direction is? Or the right? Sure we do.
The meaning of relative direction words is conveyed through tradition, education, and direct reference. So we all know where left or right is, therefore we most likely know where up or down is, too.

Let’s define trend – trend is the course / tendency or direction of the financial market.

Repeat: direction. Again: DIRECTION.

What’s the direction a market goes? -It is up, down or sideways / neutral – from left to right (the time axis) on a chart.

Coming back to what I mentioned earlier – that you don’t have to be an experienced trader, nor have an MBA degree, to identify which direction an object moves. It is common sense.

And some exercise:

And a “hard” one:

I’m sure it was easy to identify direction in the pictures above. Would it be harder to identify it in charts? let’s see…

Do we need any indicators to know that the trend in the GBPUSD chart is down? Obviously not.

An upward trend, or bullish, is also defined by series of higher highs and higher lows. The opposite applies to the downward trend, or bearish, which is defined by a series of lower highs and lower lows. Using the same GBPUSD chart, we draw the lower highs and lower lows:

I used L for lows and H for highs. Notice how fresh lows and fresh highs are formed lower in a downtrend.

Now let’s see how the opposite – higher highs and higher lows would look like, in an upward / bullish trend:

What do we have in the picture above? Series of higher highs and higher lows. The same principle applying to stairs: when ascending stairs, each new stair is a higher high and higher low formation (lower lows and lower highs when descending stairs).
Do we need trend lines and other technical tools to identify a trend? Definitely not. We don’t even have to add notes on the charts where higher highs/lows or lower highs/lows are formed. Practice makes it possible to recognize such levels and memorize them, without using any tools.

One technique to identify trends is to draw an imaginary horizontal line in the middle of the chart. If the chart starts from lower half and ends in the upper half – trend is bullish. The opposite for bearish: chart starting from upper half, ending in lower half – trend is bearish.

Examples:

But what about sideways? In case it starts around the horizontal line dividing the chart and ends around the same line and vertical deviation from the horizontal line was negligible – trend is sideways.
When moving sideways, the market does not form series of higher highs/lows or lower highs/lows – but orbits around the same level, such as this (median) horizontal line:

Before identifying a trend, it’s very important to decide which time frame to choose and set the chart’s time frame accordingly. Therefore, if we plan to identify the intra-day trend – we will look at intra-day charts (minutes to hours), not at the weekly or monthly ones. If we want to identify a long-term trend, the chart should contain the market moves since months and years ago. In a future article I will discuss about time frames since it is a very subjective topic and different people define short-term, medium term, intra-day etc in different ways. For instance, if trader Joe defines short-term being a time frame of 48 hours to several days, some folks would argue, defining “their own  short-term” as being 2 hours to 1 day or 5 minutes to 12 hours and etc.

If you still prefer to use technical tools to identify trends, using Moving Averages or trend-lines should be enough. Moving Average lines will move along with the market trend, lagging more or less depending on the MA period setting. So if a moving average is rising – trend is upward; if the moving average is falling – trend is downward. For some people It could be easier to identify if a line is rising/falling instead of identifying if the market is rising/falling. Moving average lines applied to Low or High (instead of traditionally applying to Close) prices would help determining the lows and highs while you’re looking after lower lows/highs and higher lows/highs.

Trend lines are used to connect lower lows/highs or higher lows/highs. Is it really needed to draw a line and connect lower lows/highs to know that lower lows/highs are being formed? Not really. Both trend lines and Moving Averages are a lot more useful for other purpose such as identifying support/resistance zones and trading ranges but these are different topics.

Another important topic is the trend strength, which I will discuss in a future article. What I can tell now is that for measuring trends’ strength I prefer the angles – smaller angles: weaker trends, larger angles: stronger trends. Average duration of pullbacks (how fast price resumes trend on corrections) is another key and measurable thing when identifying the trend strength.

Should you have any questions, please ask. Comments are welcome.

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Post tags: Forex Education, trends

Quote of the day: From error to error, one discovers the entire truth.– Sigmund Freud

EURUSD

Trading strategy: stand aside

All hell broke loose yesterday especially in JPY pairs – EURJPY collapsed almost 5 figures, USDJPY down 250 points, GBPJPY  down 540 points, while the Dow slipped below the 10k figure. The euro dropped to 8-month low at $1.3669 against the dollar and the decline confirmed my expectation to reach the 1.3750 level within the coming sessions which is the 61.8% of medium term’s up leg from 1.2885 to 1.5145. Next downward objective is seen around 1.3480 – 61.8% of last year’s full move. Short term sentiment remains bearish and a break above the 1.40-1.4050 region is needed to signal a change in current bearish structure. My yesterday’s strategy to buy a tiny portion at 1.3750 has been triggered, playing a potential bounce off mentioned fib support but the euro resumed downtrend in overnight session, reaching my stop. In case of a pullback today, resistance may limit gains at 1.3800, followed by 1.3850/65 and 1.3900 higher. Downside barriers are formed at 1.3650 and 1.3600. Current exchange rate is 1.3704 @05:55 GMT

Support: 1.3700, 1.3650/70 and 1.3600
Resistance: 1.3800, 1.3850/65, 1.3900 and 1.4000/30

Here are some interesting reading I recommend, regarding today’s Unemployment data release in the U.S.:

• FMMF – US to “Find” Extra 825,000 Unemployed this Friday after Birth/Death Model Revised
• Bloomberg – Birth death model – 824k jobs will disappear in February 5th
• Goldman’s NFP Estimate: -25,000, And An Extended Discussion On How They Get There

NZDUSD

Trading strategy: stand aside

The falling trend line coming from .7080 of November, now around .6060, provides a temporary support. However, the .6700 handle remains in focus as a key medium term support due to carry trade pairs getting hammered nowadays. If the kiwi dollar will manage to switch direction and re-test the upside, resistance around .6990/00 should provide a solid selling point, limiting gains. Momentum is negative in both short-term and intra-day charts and a sustained break above .6900 would encourage further gains but, as mentioned earlier, .6990/00 may hold for now, thus maintaining the short-term bearishness intact. Current exchange rate is .6882 @05:55

Support: .6850/60, .6800 and .6700
Resistance: .6900, .6990/00 and .7050
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – slightly bearish

Have a great day and weekend!

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Post tags: eurusd, nzdusd, usd index

EURUSD

Trading strategy: short at 1.3950, stop at 1.4010(1% risk), 1st objective at 1.3900, 2nd objective at 1.3830. Alternatively: small long at 1.3750, stop at 1.3690(0.5% risk), 1st objective at 1.3810, 2nd objective at 1.3870

Resistance around 1.4030 provided a strong selling point and yesterday’s euro recovery has been short-lived – downside being under pressure once again now. The corrective cycle has been similar in size and duration to the previous one – of January 21th to 26th, as noted in my previous report, and my strategy’s short entry at 1.4030 has been missed by 5 points. Speaking of today’s conditions – recent bottom at 1.3850 is in focus ahead of today’s ECB Interest Rate decision at 12:45 GMT. A potential break down should open 1.3750 – 61.8% of 1.2885-1.5145. Both short term and intra-day studies are bearish and while there are no clues of a reversal, selling into rallies is a priority. If bouncing upward off support, intra-day resistance may emerge around 1.3900 and higher – around 1.3950, eventually 1.4000/30. Current exchange rate is 1.3880 @07:15 GMT

Support: 1.3850, 1.3800 and 1.3750
Resistance: 1.3900, 1.3950, and 1.4000/30
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: stand aside

A worst than expected Unemployment Rate, at 7.2% vs. expected 6.8-7% figure, added more fuel to the already established downtrend and the kiwi dollar failed to hold in the north side. The violent sell-off extended to as low as .6953 today – level which has not been traded since September. Objective around .6860 remains in focus – formed by the downward trend line coming from .7090 of November, connecting the lower lows of November and December. On the upside, resistance starts around .7000 (former support) followed by .7050 and .7100. Current exchange rate is .6969 @07:15 GMT

Support: .6950, .6900 and .6850/60
Resistance: .7000, .7050 and .7100
Market sentiment: long term – bullish, medium term – slightly bearish, short term – bearish, intra-day – bearish

have a great day!

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Post tags: eurusd, nzdusd, usd index

EURUSD

Trading strategy: small short at 1.4030, stop at 1.4080(0.5% risk), 1st objective at 1.3980, 2nd objective at 1.3930.

The euro maintains its bid tone, recovering some lost ground against the dollar but still holds below the 1.40 handle. Resistance comes into the 1.4000-1.4030 region where the euro may face solid selling pressure, followed by 1.4130 higher, in case of a rally out of the (potential) corrective range of 1.3850-1.4030, similar in size with the last corrective range of January’s 21 to 26, as seen in the 4hrs chart below. Intra-day sentiment is bullish while the short term studies are negative while below 1.41. On the lower side, support starts at 1.3900, backed by 1.3850 and 1.3800. On an intraday perspective, upside seems favored but treat buying as walking on eggs, because selling may resume at any time. Current exchange rate is 1.3975 @07:15 GMT

Support: 1.3900, 1.3850, 1.3800 and 1.3750
Resistance: 1.4000, 1.4030/50 and 1.4130/50
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bullish

NZDUSD

Trading strategy: small short at .7190, stop at .7240(0.5% risk), objective at .7120

The kiwi dollar recovered some more ground and breached above .7100, hence closing the 2nd half of my short position at break-even. Next notable resistance zone is formed into the .7215-.7265 range by the 50% and 61.8% of .7440 to .6995. Above the said region, short term sentiment turns positive. The Unemployment Rate in the New Zealand will be released tonight at 21:45 GMT, and it is expected to print a 6.8-7% figure. In case of resuming downtrend, support should emerge around .7050 and .7000. Current exchange rate is .7120 @07:15 GMT

Support: .7050, .7000, .6970 and .6900
Resistance: .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bullish

GBPUSD

Trading strategy: short at 1.6120, stop at 1.6190(1% risk), 1st objective at 1.6050, 2nd objective at 1.5980.

Cable has faced strong resistance on its previous attempts to recover and recently dropped below the 1.61 handle which provided a stable support last week. If the former support around 1.6110 turned resistance, some selling may emerge if cable’s recovery extends up to that level. Intra-day sentiment is bullish and more gains are likely. Current exchange rate is 1.6032 @07:15 GMT

Support: 1.60, 1.5950 and 1.5900
Resistance:  1.6050/60, 1.6100/10 and 1.6200

Have a great day!

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Post tags: eurusd, gbpusd, nzdusd

EURUSD

Trading strategy: short at 1.4030, stop at 1.4080 (1% risk), 1st objective at 1.3980, 2nd objective at 1.3930.

Yesterday’s recovery has been modest, the daily range being 85 points – 40 points less than the 20 days average. However, upside remains slightly favored for now as the euro maintains its bid tone against the buck and further gains are likely. Resistance comes around the 1.40 handle followed by the 1.4130 and 1.4200, higher – on a short term basis. If downtrend resumes, recent bottom at 1.3850 would come in focus and a break lower will open 1.3750. According to the COT data, as seen in the weekly chart below, sellers’ positions rose to figures seen around August 2008, when the euro was trading around same region of $1.40, before collapsing to $1.25, therefore expectations for extended losses are quite high. For now, I feel there’s some room to the upside to ‘collect’ the pending short orders – within the 1.40-1.4050 range, and maybe around 1.4130 higher. Above 1.4130, short-term sentiment turns positive. Current exchange rate is 1.3927 @07:03 GMT

Support: 1.3850, 1.3800 and 1.3750
Resistance: 1.3950, 1.4000, 1.4030/50 and 1.4130/50
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bullish

NZDUSD

Trading strategy: holding half of yesterday’s short at .7090, stop at breakeven, objective at .7000

My expectation for NZD to face resistance around .7090/00 on yesterday was correct, and my strategy’s short at .7090 was triggered – being a good trade so far, as the 1st objective was reached at .7040, and 2nd is still in cards – with stop at break-even. RBA’s rate hike to 4% was most likely priced in, hence yesterday’s gains of AUD and NZD against the buck, but the RBA left rate unchanged at 3.75% – therefore downside pressure remains high. Intra-day resistance is formed around .7100, followed by .7150, .7200 and .7300 – higher. Intra-day sentiment is slightly bearish and the pullback to .7040 could have been corrective only. Current exchange rate is .7058 @07:03 GMT

Support: .7000, .6970, .6900 and .6850/70
Resistance: .7080/00, .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bearish

Have a great day!

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Post tags: COT, eurusd, nzdusd

EURUSD

Trading strategy: short at 1.3990, stop at 1.4040(1% risk), 1st objective at 1.3940, 2nd objective at 1.3890

The falling trendline coming from 1.4300 of January 7th through 1.4030 of January 21th is currently seen around 1.3850 where the euro found a temporary support. If current recovery will extend higher, then resistance may come in focus around 1.3950, followed by 1.4030/50 and 1.4130, eventually. Maybe 1.4130 is located a bit too high, considering the selling pressure in the last two weeks. On a short-term basis, the daily sentiment remains bearish while below 1.4130 which is the first bullish ‘optimistic’ confirmation to look for in case of a recovery, notable barriers being formed higher as well, at 1.4200/15 and 1.4300. Intra-day studies should turn positive above 1.3900, thus favoring some risky buying. On the lower zone, support starts at 1.3850, backed by 1.3800 and 1.3750. Selling into rallies remains the preferred scenario for now. Current exchange rate is 1.3890 @07:10 GMT

Support: 1.3850, 1.3800 and 1.3750
Resistance: 1.3900, 1.3950, 1.4030/50 and 1.4130/50
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – slightly bullish

NZDUSD

Trading strategy: small short at .7090, stop at .7140(0.5% risk), 1st objective at .7050, 2nd objective at .7000

the .7000 mark is under pressure but provides intra-day support for now. If it breaks – then the 1.6850/70 should be the next bearish objective. In case of a pullback, recent top side around the .7100 handle should provide resistance. Short term momentum studies are negative and there’s a long way until reaching levels that would switch sentiment – such as .7200 and .7300. Current exchange rate is .7020 @07:10 GMT

Support: .7000, .6970, .6900 and .6850/70
Resistance: .7080/00, .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bullish

Have a great week!

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Post tags: eurusd, nzdusd

EURUSD

Trading strategy: small short at 1.4050, stop at 1.4110 (0.5% risk), 1st objective at 1.4000, 2nd objective at 1.3950

The euro remains under pressure since weak rallies are finding resistance and it couldn’t hold pullback gains above the $1.40 mark. The 1.39 region is again in focus and more selling is in the cards. Potential pullbacks are likely to challenge resistance within the same 1.4050-1.41 region while extended dips may get to 1.3850 ahead of the week-end. Short-term sentiment is negative, since we are far from levels where the ‘momentum bell’ would ring signaling a change, such levels being set around 1.4250 – median retracement level of the current down leg from 1.4580 to 1.3910. Selling into rallies is favored for now as daily deviation to the upside from open prices averaged 20 to 30 points this week. The USD index holds gains into the freshly conquered territory and found support near 78.50 yesterday, as expected and noted in my previous article’s chart. Same 78.50 should limit gains within the coming days, maintaining the positive bias, while interim support is emerging at 78.70. Current exchange rate is 1.3945 @07:27 GMT

Support: 1.3900/10, 1.3850, 1.3800 and 1.3750
Resistance: 1.4000, 1.4050, 1.4080/00, 1.4130/50, 1.4200/20, 1.4250/70 and 1.4300
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: stand aside

Yesterday’s short-lived rally came close to my strategy’s short entry at .7150 as the New Zealand dollad sighed out of exhaustion ahead of the mid .71 region and collapsed, bringing another 1 full figure on bear’s part. Submerged below the .7100 mark, but still holding above the 70 cents, the NZ dollar doesn’t show any intuitive signs of recovery so we should dare to focus lower – at .7000 on first phase, which I expect to bring some support from bulls’ side. .6885 remains my short-term target for now, while .7200 is on the safe side. Above that, I might consider buying on breakouts. Aussie’s break below 61.8% of .8735-.9325 doesn’t help either, in respect to correlation between the two pairs, hence favoring further pressure to the South. Current exchange rate is .7042 @07:27 GMT

Support: .7020, .7000, .6970, .6900 and .6855
Resistance: .7100, .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bullish

On Monday I wrote on some potential setups in AUDUCAD, EURAUD and EURCHF. Here’s a few words update:

AUDCAD

Tiredness showed up 4 times, in 4 days, just ahead of .9600. Therefore –  no break out. I still believe that the AUD may catch a pulse and break above the .9600 mark, but this week already came to an end, so the bullish scenario remains doable next week.

EURAUD

A rally to upper channel’s band was a bit too optimistic, as the EUR fails to print rates above the 1.57 handle against the aussie dollar. My short-term model is in a quasi-bullish phase, still, as 1.55 confirmed an interim bottom. Aggressive traders may consider buying on close above 1.5700, but such as AUDCAD’s case – remains in play for the coming week.

EURGBP

Planned to sell around .8850 – and 60 points below that was the higher high to see, so far, on my fancy charts. The euro is still too weak to recover but holds above weekly trend line coming from .8400 of June. The .8600 should hold for now, and if it does – I reconsider the .8850 level to sell on extended rallies.

Have a great week-end!

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Post tags: AUDCAD, audusd, EURAUD, eurgbp, eurusd, nzdusd, usd index

EURUSD

Trading strategy: small short at 1.4080, stop at 1.4140 (0.5% risk), 1st objective at 1.4020, 2nd objective at 1.3960

The euro slid below the $1.40 mark after the Fed announced its monetary policy decision, leaving interest rates unchanged at 0-0.25%, as expected. Euro’s decline to 1.3935 overnight has been short lived and it is now back above the 1.4 handle but downside remains in focus and fresh selling may emerge at any time. On the upside, resistance levels may limit gains around 1.4090/00, followed by 1.4150. Support comes around 1.3940 backed by 1.3900 and 1.3800. Short term bearish sentiment is unchanged, and a sustained break above 1.4250/65 is required to confirm a change in momentum studies. Intra-day studies maintain a bearish tone, as well, while below 1.4050. Current exchange rate is 1.4019 @07:15 GMT

Support: 1.3935/50, 1.3900, 1.3800 and 1.3750
Resistance: 1.4050, 1.4100, 1.4130/50, 1.4200/20, 1.4250/70 and 1.4300
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: small short at .7150, stop at .7210 (0.5% risk), 1st objective at .7090, 2nd objective at .7030

The New Zealand dollar recovered some lost ground but stays below recently breached .7100 mark which provides the first resistance. Above .7100, .7150/70 is the next region where selling may pick up. Short-term sentiment remains negative and some serious gains, above .7250, are required to confirm that current decline was corrective. Meanwhile, selling minor rallies should be ok. Intra-day bias is slightly bullish and will strengthen if the pair manage to break above .7100. Current exchange rate is .7096 @07:15 GMT

Support: .7020, .7000, .6970, .6900 and .6855
Resistance: .7100, .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bullish

have a good day!

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Post tags: eurusd, nzdusd

EURUSD

Trading strategy: stand aside

The euro still trades near the 1.4030 bottom after it found intra-day resistance around 1.4100 yesterday. Down 0.70% for the week and 3% since January 1’st – more selling seems just around the corner. Today’s FOMC Interest Rate decision at 19:15 GMT is the most important event to watch during the next 24 hours. Technically speaking, support may be challenged into the 1.4000/30 region and in case it fails, next downside barriers should get in focus around 1.3950 and 1.3900. In case euro will switch sides and test the upside – resistance may limit gains around 1.4100, then higher – and 1.4200 and 1.4250/65 which should be treated as more notable upside barriers. Short term sentiment is bearish, therefore unchanged since breaking below the flag’s formation on January 18 / below 1.4350. Intra-day momentum is slightly bearish at the time of writing this, and will remain so while 1.4100 is intact. Current exchange rate is 1.4048 @07:25 GMT

Support: 1.4030/50, 1.4000/15, 1.3950, 1.3900, 1.3800 and 1.3750
Resistance: 1.4100, 1.4130/50, 1.4200/20, 1.4250/70 and 1.4300
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – slightly bearish

NZDUSD

Trading strategy: stand aside

Downside pressure is high ahead of RBNZ Interest Rate decision at 20:00 GMT. Yesterday’s break below the rising trend line coming from .6685 strengthens the bearish sentiment and a new test of .7000 seems doable within the coming sessions. With no signs of a reversal yet, I think it’s better to wait for the interest rate decision as market’s reaction may provide some clues on upcoming direction. If .7000 breaks, next projection comes at .6855. Current exchange rate is .7038 @07:25 GMT

Support: .7020, .7000, .6970, .6900 and .6855
Resistance: .7100, .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – bearish

Have a great day!

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Post tags: eurusd, nzdusd

EURUSD

Trading strategy: stand aside

Pushing lower towards 6 months low ahead of tomorrow’s FOMC interest rate decision, the euro is facing downside pressure after it failed to stabilize near 1.42 yesterday. Both short term and intra-day charts show signs of weakness and current trip into the lower territory may extend further below recent bottom at 1.4030, out of this month’s 550 points range. In case of pullbacks to the upside, renewed selling may emerge around the 1.4200 handle, then higher – at 1.4265. Below 1.4015/30, next important objective comes around 1.3750 – 61.8% retracement level of 1.2885-1.5145, not far below 1.3800 which is the median retracement of 1.2455-1.5145 if we count the full range of 2009. If that 1.3750-1.38 region’s significance is to act as a magnet in current bear market, then we should keep an eye on that 1.4000/30 support, since it is the last barrier on the way towards the lower support region I mentioned. Today’s important economic event that could affect euro’s sentiment is the German IFO Business Climate Index at 9:00 GMT, expected to print 95.00. A lower figure would add more fuel to current decline. Downside remains favored for now, selling rallies being the suggested strategy. Current exchange rate is 1.4085 @07:15 GMT

Support: 1.4030/50, 1.4000/15, 1.3950, 1.3900, 1.3800 and 1.3750
Resistance: 1.4130/50, 1.4200/20, 1.4250/70, 1.4300 and 1.4370
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: stand aside

The recent bottom around .7090 is still providing support although price spiked to as low as .7068 earlier today. Short-term sentiment is negative and tomorrow’s RBNZ Interest Rate Decision is the key event that should provide clues on NZD’s direction. Meanwhile, hourly price action suggests more selling as long as the pair holds below .7150 interim resistance, ahead of more notable barriers coming at .7200/20 and .7300. Below .7070/90, next support is seen on the .7000 handle, backed by .6970 and .6900. Current exchange rate is .7086 @07:15 GMT

Support: .7070/90, .7000, .6970 and .6900
Resistance: .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bullish

Have a great day!

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Post tags: eurusd, nzdusd

Trading strategy: short at 1.4265, stop at 1.4325(1% risk), 1st objective at 1.4205, 2nd objective at 1.4145

The euro holds its modest gains around 1.4170, recovering from recent bottom at 1.4030. Short term sentiment remains bearish while below 1.4300 and extended gains from current market levels will probably be limited by facing resistance into the 1.4250-1.4300 region. On a medium term basis, downside is also favored due to December’s breach of the rising trend line which provided support for several months, bearishness also confirmed by the big money positions currently on the bear side – according to COT data, as showed in the weekly chart below. Momentum studies are in a bullish configuration on the intra-day charts and will remain so as long as support on the 1.4100 handle is intact. Current exchange rate is 1.4145 @07:30 GMT

Support: 1.4100, 1.4030/50 and 1.4000
Resistance: 1.4200/20, 1.4250/70, 1.4300 and 1.4370
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bullish

NZDUSD

Trading strategy: small short at .7220, stop at .7270 (0.5% risk), 1st objective at .7170, 2nd objective at .7120

Downside pressure remains high due to the velocity of last down leg and .7300 is currently forming the first important short-term resistance. Interim resistance is seen at .7230, formed by the downward trend line coming from .7630 of October. Short term sentiment is bearish, therefore a prolonged recovery is expected to bring strong resistance in focus into the .7230-.7250 region, eventually .7300. Above the .7300 mark, uptrend resumes, confirming that the decline to .7090 was corrective. Intra-day momentum is slightly bullish at the time of writing this, and a minor resistance has been pressured around .71/5060 a bit earlier today – formed by the downward trend line covering recent tops from .7230 of January 21. Current exchange rate is .7131 @07:30 GMT

Support: .7100, .7050 and .7000
Resistance: .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bullish

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Post tags: AUDCAD, EURAUD, eurgbp, eurusd, nzdusd

Trading strategy: short at 1.4215, stop at 1.4265(1% risk), objective at 1.4175.

Euro’s comeback from the 1.4030 bottom is likely to extend further, towards resistance zone around 1.4250, where fresh selling will probably emerge. Short term sentiment remains bearish while below 1.4250-1.4300, so a daily close above the said range is needed to confirm a turn-around. Intra-day sentiment is slightly positive but interim resistance at 1.4150 has to break in order to strengthen the intra-day momentum. The dollar index currently pulls back from the 78.50 region where a potential double top could form, as seen in the chart below. Breaking below 78 should open 77.50 which is the next support to watch, corresponding to the 1.4285 region of EURUSD, but it is a bit too early to look “that far”. Current exchange rate is 1.4141 @07:20 GMT

Support: 1.4100, 1.4030/50 and 1.4000
Resistance: 1.4200/20, 1.4250 and 1.4285/00
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – slightly bullish

NZDUSD

Trading strategy: stand aside

Up 0.73% for today, the kiwi dollar recovers some lost ground against the dollar, but remains into the negative territory – also below the 61.8% retracement ratio of the last up leg from .6970 to .7435. If the recovery continues, next upside objective should be .7200/05, where the NZD found a temporary support (50% of mentioned up leg) before resuming downtrend yesterday. On an intra-day basis, the upside is slightly favored as the New Zealand dollar tries to build momentum, but selling into rallies will limit the upside for now. Current exchange rate is .7147 @07:20 GMT

Support: .7100, .7050 and .7000
Resistance: .7150, .7200/05 and .7250
Market sentiment: long term – bullish, medium term – bullish, short term – slightly bearish, intra-day – slightly bullish

Other setups:

GBPUSD

Trading strategy: long at 1.6250 on break of 1.6240 (hourly bar/candle closed above 1.6240), stop at 1.6190 (1% risk), 1st objective at 1.6320, 2nd objective at 1.6370

The 1.6240/50 level provided both a stable support and a resistance over the last weeks and it is currently being tested. Since last pullback into the mid 1.61 region is likely to be corrective, as the 61.8%-50% range provided support, current recovery may continue, breaking above 1.6240. In case it does, next upside objective comes around 1.6350.  Current exchange rate is 1.6240 @07:20 GMT

Have a great day!

© liviu for innerfx.com, 2010. | Permalink | add to del.icio.us | submit to stumbleupon | fav with technorati | digg it | tweet it
Post tags: eurusd, gbpusd, nzdusd

Trading strategy: short at 1.4240, stop at 1.4300 (1% risk), 1st objective at 1.4180, 2nd objective at 1.4120

Euro’s sell-off continued as dollar has performed pretty well across the board, and so far it doesn’t suggest that it will slow down. In case of an extended recovery, the euro may enter the ‘rallies selling territory’ into the 1.4240-1.4280 region, where resistance is formed by fib ratios of last down leg from 1.4410 to 1.4065. Interim resistance is seen at 1.4200 while on the downside, support starts at 1.4100, backed by 1.4050/65 and the 1.4000 mark which is a key barrier to watch in case of more euro selling. Short term sentiment is bearish and a pullback to the upside seem possible as the USD Index is currently facing resistance at 78.50 and may form a double top if it doesn’t break. Current exchange rate is 1.4116 @07:13 GMT

Support: 1.4100, 1.4050/65 and 1.4000
Resistance: 1.4200, 1.4240 and 1.4280/00
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: stand aside

Support was found at .7200 – the median retracement of last upward swing from .6970 to .7440 after yesterday’s 170 points decline, double than the 20 days average daily range. Former support at .7300 turned resistance, and may limit gains for a while in case of a recovery – triggering more selling orders. However, there’s a long way until getting up there and risk of more downside action is currently high. In case of resuming yesterday’s decline, next support comes at .7150 – then .7100 and the key .7000 mark, lower. Selling into potential rallies, below yesterday’s open, seems the ‘better’ alternative for now, instead of picking bottoms. Current exchange rate is .7212 @07:13 GMT

Support: .7200, .7150, .7100 and .7000
Resistance: .7300, .7340/50 and .7400
Market sentiment: long term – bullish, medium term – bullish, short term – slightly bearish, intra-day – bearish

Have a great day!

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Post tags: eurusd, nzdusd

Trading strategy: short at 1.4285, stop at 1.4345 (1% risk), 1st objective at 1.4225, 2nd objective at 1.4165.

Euro remains a victim of gravity as it extended its losses down to 1.4165 overnight, well below support formed by the 200 days SMA around 1.4280. More downside action remains probable as long as intra-day resistance levels into the 1.42-1.43 range will trigger solid selling interest. A break above 1.4350 is needed to confirm that uptrend resumed – but seems unlikely within the coming sessions. Resistance starts at 1.4220 followed by 1.4250 and 1.4285/00 while downside barriers are emerging at 1.4150/65, 1.4100 and 1.4050. Current exchange rate is 1.4206 @07:00 GMT

Support: 1.4150/65, 1.4100 and 1.4050
Resistance: 1.4220, 1.4250 and 1.4285/00
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: stand aside

Kiwi’s sell off intensified due to dollar’s appreciation across the board, especially against the euro and due to the New Zealand’s bad CPI figure which came at -0.20%. My yesterday’s strategy to buy a small size at .7370 turned bad when the CPI figure was released, the drop being initiated from .7395, reaching the -0.5% stop at .7320. In case of a recovery, resistance is expected to emerge at .7350, then higher – at .7400. Short term sentiment remains slightly bullish as current decline could be corrective only, but break above .7400 is needed to resume uptrend. Current exchange rate is .7285 @07:00 GMT

Support: .7250/65, .7200 and .7150
Resistance: .7350, .7400 and .7430/50
Market sentiment: long term – bullish, medium term – bullish, short term – slightly bullish, intra-day – bearish

Have a good day!

© liviu for innerfx.com, 2010. | Permalink | add to del.icio.us | submit to stumbleupon | fav with technorati | digg it | tweet it
Post tags: eurusd, nzdusd