Daily Technical Analysis

EURUSD Outlook

After corrected lower in the last three days, the EURUSD had a bullish momentum yesterday. This is not a surprise for me since the medium outlook remains bullish. On h4 chart below we have rectangle formation (1.4050 - 1.3850) indicating consolidation. Be patient. We are still in no trading zone in nearest term. Immediate resistance is seen at 1.3981 (yesterday's high). Break above that area could trigger further bullish momentum testing key resistance level 1.4050. Break above that level should continue the bullish scenario towards 1.4173. Initial support at 1.3850 and 1.3736. CCI in neutral area on h4 chart.

EURUSD Daily Supports and Resistances:

S1= 1.3827
S2= 1.3715
S3= 1.3638
R1= 1.4016
R2= 1.4093
R3= 1.4205

GBPUSD Outlook

GBPUSD made another indecisive movement yesterday. On daily chart below we can see that the pair has been showing no clear direction in the last four days. If we look at weekly chart, we will see a Doji formation during this week. I think we are still in no trading zone. However the medium outlook remains bullish. Key resistance level at 1.6000. Consistent movement above that area should trigger further bullish momentum. Immediate support at 1.5850 followed by 1.5750. CCI about to cross the 100 line down suggesting a potential downside pressure.

GBPUSD Daily Supports and Resistances:

S1= 1.5859
S2= 1.5778
S3= 1.5702
R1= 1.6016
R2= 1.6092
R3= 1.6173

USDJPY Outlook

The USDJPY had significant bullish momentum yesterday. The pair break above key level 96.60/70, topped at 97.22 and closed at 96.83. The price need to stay consistently above 96.60/70 area in order to continue it's bullish scenario towards 97.90 area. Movement below 96.60/70 would lead us into no trading zone. CCI in overbought area and heading down on h4 chart suggesting a potential downside pressure.

USDJPY Daily Supports and Resistances:

S1= 95.62
S2= 94.41
S3= 93.61
R1= 97.63
R2= 98.43
R3= 99.64

USDCHF Outlook

The USDCHF continued it's bearish scenario yesterday, but still unable to move consistently below 1.0810 key support area. This fact keep us in no trading zone in nearest term. Break below 1.0810 could trigger further bearish momentum towards 1.0700 area. Immediate resistance is seen at 1.0870 - 1.0910 area. CCI in neutral area on h4 chart.

USDCHF Daily Supports and Resistances:

S1= 1.0778
S2= 1.0716
S3= 1.0629
R1= 1.0927
R2= 1.1014
R3= 1.1076

Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair continued to trend to the downside resulting in a breach of the 1.3850 level which opens the way towards 1.3700 – 1.3735 due to a bearish technical pattern as seen in the above image. This decline within an ascending channel is considered normal and we expect the pair to rebound from the above mentioned support level to target 1.4100 as an initial target as far as 1.3665 remains intact.

The trading range for today is among the key support at 1.3580 and the key resistance at 1.4380

The general trend is to the downside as far as 1.4710 is intact with targets at 1.2120

Support: 1.3815, 1.3775, 1.3735, 1.3700, 1.3665
Resistance: 1.3850, 1.3900, 1.3980, 1.4050, 1.4115

Recommendation: According to our analysis, buy the pair above 1.3735 with targets at 1.3850 and 1.3900 and stop loss with four hour closing below 1.3665

GBP

After the Cable was able to touch the key resistance for the upside channel yesterday, it reversed back to the downside to breach the minor support level as seen in the above image to correct to the downside before rebounding back to the upside with targets near 1.6400. This decline may take the pair to 1.5755 which we expect is going to be enough to rebound the pair yet this decline requires the confirmation of the breach of 1.5890

The trading range for today is among the key support at 1.5700 and the key resistance at 1.6370

The general trend is to the upside as far as 1.4840 remains intact with targets at 1.6600

Support: 1.5890, 1.5845, 1.5755, 1.5700, 1.5665
Resistance: 1.5955, 1.5970, 1.6010, 1.6080, 1.6110

Recommendation: According to our analysis, sell the pair below 1.5890 with targets at 1.5755 and stop loss with four hour closing above 1.5970

JPY

The USD/JPY pair was able to incline due to the bullish technical pattern to target 96.60. We expect the pair to reverse from this level to target 93.50 once again within the descending channel once again before heading towards 92.40 as far as 97.20 remains intact.

The trading range for today is among the key support at 91.90 and the key resistance at 99.40

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 95.75, 95.45, 94.90, 94.10, 93.50
Resistance: 96.60, 97.20, 97.60, 98.10, 98.85

Recommendation: According to our analysis, sell the pair below 96.60 with targets at 94.95 and stop loss with four hour closing above 97.20

CHF

The Dollar versus Swissy pair continued to pressure the resistance level at 1.0925 to successfully breach it and open the way towards the key resistance for the downside channel at 1.1025. We currently wait for the pair to reach this last level before reversing back to the downside targeting 1.0745 and 1.0570 on the short term. This decline remains as far as 1.1165 is intact.

The trading range for today is among the key support at 1.0620 and the key resistance at 1.1205

The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245

Support: 1.0925, 1.0860, 1.0810, 1.0765, 1.0745
Resistance: 1.0960, 1.1025, 1.1090, 1.1125, 1.1165

Recommendation: According to our analysis, sell the pair below 1.1025 with targets at 1.0925 and 1.0810 and stop loss with four hour closing above 1.1125

CAD

The Dollar versus Loonie pair was able to correct to the upside towards 1.1230 where we expect the pair to decline from there to complete the short term downside targets at 1.1100 and 1.0935 as far as 1.1550 remains intact on the short term and 1.1335 on the intraday basis.

The trading range for today is among the key support at 1.0935 and the key resistance at 1.1620

The general trend is to the downside as far as 1.1870 remains intact with targets at 1.0300

Support: 1.1190, 1.1100, 1.1085, 1.1000, 1.0980
Resistance: 1.1270, 1.1335, 1.1370, 1.1415, 1.1500

Recommendation: According to our analysis, sell the pair below 1.1230 with targets at 1.1100 and stop loss with four hour closing above 1.1335

Technical Analysis for Crosses

GBP/JPY

The British pound versus the Japanese yen is moving steadily above the critical broken areas of 151.50, showing more confirmation for the previous discussed CD leg formation of the daily butterfly harmonic scenario. Additional upward steps are about to come targeting 155.90 zones as an ideal technical target for the harmonic wave. AROON also is moving steadily above value of 70.00 confirming our short term bullishness.

Trading range for today is among key support at 149.30 and key resistance at 156.80.

The general trend is to the downside as far as 156.75.remains intact with target at 116.00.

Support: 153.00, 152.15, 151.50, 151.00, 150.00
Resistance: 153.90, 154.50, 155.00, 155.85, 156.75

Recommendation: According to our analysis, buy the pair at 153.25 with targets at 155.80 and stop loss at 151.50.

EUR/JPY

After 3 days of waiting, we got our sign as AROON up indicator -colored in green- has breached the values of 30.00, 50.00 and even 70.00 signaling that the expected short term harmonic butterfly is still in progress supported by Envelopes which carry this impulsive wave from below. The most important point now is 38.2% Fibonacci level at 134.15 as a breakout above it will open the door up for additional bullishness.

Trading range for today is among key support at 129.75 and key resistance now at 137.40.

The general trend is to the downside as far as 141.44 remains intact with targets at 100.00 followed by 88.97 levels.

Support: 132.95, 132.20, 131.55, 131.05, 130.00
Resistance: 133.65, 134.15, 134.80, 135.55, 136.25

Recommendation: According to our analysis, buy the pair at 133.00 with targets at 135.25 and stop loss at 131.15.

EUR/GBP

After the successful breakout below 0.8720, the royal pair found a cluster support point at 0.8660. Now, the clear oversold signs appearing on the RSI-currently valued at 30.00 - revive the possibility of showing correctional movements while bears power is decreasing gradually. A break of 0.8720 will be resulting in re-testing 0.8760 zones again before resuming the short term bearishness.

Trading range is among the key support 0.8530 and key resistance now at 0.8820.

The general trend is to the upside as far as 0.8020 area remains intact with targets at 1.0000 followed by 1.0400 levels.

Support: 0.8660, 0.8620, 0.8580, 0.8540, 0.8500
Resistance: 0.8700, 0.8725, 0.8760, 0.8800, 0.8820

Recommendation: According to our analysis, buy the pair at 0.8670 with targets at 0.8750 and stop loss at 0.8610

Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair was able to reach the 1.4000 resistance level as it halted further gains to reach the key resistance for the ascending channel currently at 1.4060. The bearish momentum seen on momentum indicators is pressuring the pair to the downside towards 1.3900 in an attempt to gather bullish momentum to target 1.4180 today. This incline remains as far as 1.3680 is intact on the short term.

The trading range for today is among the key support at 1.3580 and the key resistance at 1.4380

The general trend is to the downside as far as 1.4710 is intact with targets at 1.2120

Support: 1.3900, 1.3850, 1.3815, 1.3775, 1.3740
Resistance: 1.4060, 1.4115, 1.4180, 1.4215, 1.4300

Recommendation: According to our analysis, buy the pair above 1.3900 with targets at 1.4060 and stop loss with four hour closing below 1.3815

GBP

After reaching our initial target yesterday, the Cable is currently nearing our second suggested target at 1.5995 noting that the key resistance for the ascending channel has shifted to 1.6040. We see the possibility of trading within a minor ascending channel that could take the pair to the above mentioned level where a breach of which will take the pair further towards 1.6400 as far as 1.5700 is intact.

The trading range for today is among the key support at 1.5700 and the key resistance at 1.6370

The general trend is to the upside as far as 1.4840 is intact with targets at 1.6600

Support: 1.5900, 1.5845, 1.5775, 1.5700, 1.5665
Resistance: 1.6040, 1.6100, 1.6185, 1.6275, 1.6345

Recommendation: According to our analysis, buy the pair above 1.5900 with targets at 1.6040 and stop loss with four hour closing below 1.5845

JPY

The USD/JPY pair was able to breach the neckline at 95.20 yesterday where targets are now at 96.60. We may witness high volatility near the neckline as it attempts to retest it to gather bullish momentum. The short term trend remains to the downside as we believe the pair to reverse to the downside after reaching 96.60 to target 92.40 as far as 97.15 remains intact.

The trading range for today is among the key support at 91.90 and the key resistance at 97.15

The general trend is to the downside as far as 102.60 with targets at 84.95 and 82.60

Support: 95.20, 94.60, 94.25, 93.95, 93.50
Resistance: 96.00, 96.60, 97.15, 97.60, 98.10

Recommendation: According to our analysis, buy the pair above 95.20 with targets at 96.60 and stop loss with four hour closing below 94.25

CHF

Yesterday's incline came to a halt at the 50% correction at 1.0925 where the Dollar versus Swissy pair reversed back tot eh downside towards the key support at 1.0800. The pair is currently attempting to adjust to the upside today towards 1.0925 where a breach of this level will take the pair towards the key resistance near 1.1050. The short term trend remains to the downside with targets at 1.076 – 1.0745 before attempting to head towards 1.0570.

The trading range for today is among the key support at 1.0620 and the key resistance at 1.1205

The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245

Support: 1.0800, 1.0765, 1.0745, 1.0710, 1.0655
Resistance: 1.0925, 1.0960, 1.1050, 1.1070, 1.1125

Recommendation: According to our analysis, buy the pair above 1.0925 with targets at 1.1050 and stop loss with four hour closing below 1.0860

CAD

After attempting to breach the key resistance at 1.1335 yesterday, the Dollar versus Loonie pair declined to reach out target at 1.1185. As seen in the above image, trading remains within a downside channel targeting 1.1000 and 1.0935 respectively as far as 1.1230 remains intact. A breach of this level will take the pair higher to 1.1335 in an attempt to change the short term trend to the upside.

The trading range for today is among the key support at 1.0935 and the key resistance at 1.1620

The general trend is to the downside as far as 1.1870 remains intact with targets at 1.0300

Support: 1.1120, 1.1085, 1.1000, 1.0980, 1.0935
Resistance: 1.1230, 1.1270, 1.1335, 1.1370, 1.1415

Recommendation: According to our analysis, sell the pair below 1.1230 with targets at 1.1120 and stop loss with four hour closing above 1.1335

Technical Analysis for Crosses

GBP/JPY

Sterling versus Japanese yen is preceding our daily butterfly harmonic scenario, breaching the critical areas of 151.50. Hence we see that additional upside actions are highly predicted to complete the formation of CD leg targeting the areas of 38.2% Fibonacci for the rally from 215.85 zones. AROON indicator has been activated as AROON up is above value of 70.00 -colored in green- while AROON down -colored in red- is moving downwards reviving the change of the trend after breaching the above mentioned areas.

Trading range for today is among key support at 148.25 and key resistance at 156.00.

The general trend is to the downside as far as 156.20 remains intact with target at 116.00.

Support: 152.25, 151.55, 150.85, 150.40, 149.30
Resistance: 152.75, 153.40, 154.10, 155.00, 155.85

Recommendation: According to our analysis, buy the pair at 152.25 with targets at 154.50 and stop loss at 150.40.

EUR/JPY

The pair looks to be trading in the CD leg of our suggested daily butterfly, provided by the solid support from the Envelopes as shown obviously on the secondary image. It seems that the pair has the ability to attack 38.2 % Fibonacci level of the entire rally started at 169.90 zones. Indeed, a break of this level will be able to activate AROON indicator and will allow it to cross the value of 30.00.

Trading range for today is among key support at 129.75 and key resistance now at 137.40.

The general trend is to the downside as far as 141.44 remains intact with targets at 100.00 followed by 88.97 levels.

Support: 132.85, 132.20, 131.55, 131.05, 130.00
Resistance: 133.65, 134.15, 134.80, 135.55, 136.25

Recommendation: According to our analysis, buy the pair at 133.00 with targets at 135.25 and stop loss at 131.15.

EUR/GBP

The royal pair is still fluctuating sideways between the resistance of 0.8790 and the cluster support areas around 0.8720 , but we see that this solid support will be able to provide the pair with the upside momentum it needs to form a possible double bottom. Carefully note that RSI (9) is valued at 30 reviving the potential slight upward actions on the intraday basis.

Trading range is among the key support 0.8580 and key resistance now at 0.8930.

The general trend is to the upside as far as 0.8020 area remains intact with targets at 1.0000 followed by 1.0400 levels.

Support: 0.8720, 0.8700, 0.8680, 0.8645, 0.8580
Resistance: 0.8760, 0.8790, 0.8825, 0.8865, 0.8900

Recommendation: According to our analysis, buy the pair at 0.8745 with targets at 0.8820 and stop loss at 0.8685.

Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair continues to correct to the downside towards 1.3850 to build a solid base before rebounding back to the upside to reach the short term upside targets at 1.4180. It is important for the 1.3770 level to remain intact for the incline to continue on the intraday.

The trading range for today is among the key support at 1.3580 and the key resistance at 1.4380

The general trend is to the downside as far as 14710 remains intact with targets at 1.2120

Support: 1.3970, 1.3850, 1.3770, 1.3740, 1.3705
Resistance: 1.4050, 1.4115, 1.4180, 1.4215, 1.4300

Recommendation: According to our analysis, sell the apri below 1.3970 with targets at 1.3850 and stop loss with four hour closing above 1.4050

GBP

Trading remains narrow ranges for the Cable since yesterday yet the pair was able to breach the key support for the minor ascending channel as seen in the above image. We will wait for the next four hour closing to confirm the break which may take the pair to as low as 1.5790 to gather bullish momentum before rebounding back to the upside targeting 1.6100. This incline remains on the short term as far as 1.5650 is intact.

The trading range for today is among the key support at 1.5650 and the key resistance at 1.6200

The general trend is to the upside as far as 1.4840 is intact with targets at 1.6600

Support: 1.5845, 1.5790, 1.5745, 1.5700, 1.5645
Resistance: 1.5890, 1.5950, 1.5995, 1.6030, 1.6100

Recommendation: According to our analysis, buy the pair above 1.5790 with targets at 1.5890 and 1.5995 and stop loss with four hour closing below 1.5700

JPY

After breaching the key resistance for the descending channel, the USD/JPY pair failed to breach the resistance level at 95.20 resulting in a reversal to the downside once again to retest the previously broken resistance level. The pair seems to be forming a bullish technical pattern with a neckline at 95.02 where a breach of this level will take the pair to 96.00 before reversing back to the downside as we pointed out yesterday (click here for yesterday's report). This scenario remains valid unless a decline occurs below 94.25 which may result in further declines. The short term trend remains to the downside with targets at 93.50 and 92.40 as far as 97.10 remains intact.

The trading range for today is among the key support at 91.90 and the key resistance at 97.10

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 94.25, 93.95, 93.50, 92.95, 92.40
Resistance: 95.20, 96.00, 96.45, 97.10, 97.60

Recommendation: According to our analysis, sell the pair below 94.25 witht argets at 93.50 and 92.40 and stop loss with four hour closing above 95.20

CHF

The Dollar versus Swissy continued to trade within narrow ranges yesterday yet with tendency towards the key support for the descending channel at 1.0800. We still believe that the pair is to correct to the upside to reach 1.0960 in an attempt to gather bearish momentum to target 1.0745 and 10.570 on the short term as far as 1.070 is intact.

The trading range for today is among the key support at 1.0745 and the key resistance at 1.1205

The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245

Support: 1.0800, 1.0770, 1.0745, 1.0710, 1.0655
Resistance: 1.0900, 1.0960, 1.1040, 1.1070, 1.1125

Recommendation: According to our analysis, sell the pair below 1.0960 with targets at 1.0800 and stop loss with four hour closing aboev 1.1040

CAD

The Dollar versus Loonie pair was able to incline to reach the resistance level at 1.1290 where we expect to witness slight downside movements from this level to target 1.1185 on the intraday basis before heading towards 1.0930. The downside movements remain as far as 1.1335 is intact.

The trading range for today is among the key support at 1.0935 and the key resistance at 1.1620

The general trend is to the downside as far as 1.1885 remains intact with targets at 1.0300

Support: 1.1210, 1.1185, 1.1120, 1.1085, 1.1040
Resistance: 1.1290, 1.1335, 1.1370, 1.1415, 1.1475

Recommendation: According to our analysis, sell the pair below 1.1290 with targets at 1.1185 and stop loss with four hour closing above 1.1370

Technical Analysis for Crosses

GBP/JPY

The pivot point for intraday trading for today is at 149.90 as this level will determine whether the pair is to incline or decline. The uptrend currently seen in the above image may be stalled as momentum indicators show the pair being overbought yet the possible the formation of a classical bullish technical pattern with a neckline at 149.90 makes us believe that the pair is to incline today as it successfully maintains levels above the neckline. However, reversing to the downside to trade below 149.10 will adjust the intraday trend to the downside.

The trading range for today is among the key support at 145.95 and the key resistance at 155.30

The general trend is to the downside as far as 156.20 remains intact with targets at 116.00

Support: 149.90, 149.10, 148.30, 147.65, 146.90
Resistance: 150.50, 151.00, 152.75, 153.65, 155.30

Recommendation: According to our analysis, buy the pair at 149.90 with targets at 152.75 and stop loss at 148.80

EUR/JPY

The Euro versus Japanese yen continues to consolidate within a triangle that could be a corrective wave in the Elliott cycle before continuing the incline. Momentum indicators show the pair being overbought yet as long as trading remains above the 100 MA at 131.40, the upside trend on the intraday basis will continue targeting the key resistance for the technical pattern at 133.55. Breaching this level to the upside will result in a vigorous movement.

The trading range for today is among the key support at 130.05 and the key resistance at 135.60

The general trend is to the downside as far as 141.44 remains intact with targets at 100.00 and 88.97

Support: 132.30, 132.15, 131.75, 131.40, 130.50
Resistance: 133.00, 133.55, 134.45, 134.80, 135.60

Recommendation: According to our analysis, buy the pair at 132.30 with targets at 133.55 and stop loss at 131.00

EUR/GBP

The short term downside trend continues as far as trading remains below 0.8905 which resides above the 100 MA at 0.8875. However, as the EUR/GBP pair continues to fluctuate sideways, we expect the pair is to retest the 0.8730 – 0.8720 level where a breach of this level to the downside will accelerate the downside movements yet maintaining levels above it will rebound trading towards 0.8875. Note that the short term trend remains to the downside.

The trading range for today is among the key support at 0.8580 and the key resistance at 0.8930

The general trend is to the upside as far as 0.8020 is intact with targets at 1.0000 and 1.0400

Support: 0.8760, 0.8720, 0.8700, 0.8675, 0.8645
Resistance: 0.8815, 0.8845, 0.8870, 0.8900, 0.8930

Recommendation: According to our analysis, sell the pair at 0.8790 with targets at 0.8720 and stop loss at 0.8835

Fundamental Analysis

Here is the video:
05-26-2009.swf

We're seeing the risk aversion sentiment continue to weigh on markets, but we still haven't quite gotten that breakout lower yet to both fully confirm our outlook and accellerate things lower. The 875 level on the S&P 500 futures is the key level to watch while the 132 handle is the near term support to watch on the EUR/JPY. Please watch the video for a much more detailed look at EUR/USD, US equities and gold. Monday's German IFO came in lower than expected, but not low enough to hit our sell trigger, so the price action wasn't terribly strong. There are several news items due out Tuesday, but none are very tradable on currencies right now in my opinion. In the video I explain a bit about most of them and what they might bring to the table though. The next clearly tradable report is out Wednesday morning:

1000 Wednesday 5-27 US Existing Home Sales m/m (4.66M expected) - This indicator has performed quite well on the EUR/JPY when it hits a nice trigger.
If it comes out at 4.80M or higher, EUR/JPY should rally 50 pips or more
If it comes out at 4.52M or lower, EUR/JPY should sell off 50 pips or more

Economic Report

For more on forex signal click here.

Technical Analysis for Major Currencies

EURO

After breaching the minor resistance at 1.3945, The Euro versus Dollar pair was able to touch 14050 last Friday before reversing back to the downside to trade near the 1.4000 level. A downside correction may be witnessed to as far as 1.3740 before rebounding back to the upside towards 1.4140 – 1.4180. The upside direction remains as far as 1.3740 is intact.

The trading range for today is among the key support at 1.3580 and the key resistance at 1.4380

The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120

Support: 1.3970, 1.3850, 1.3780, 1.3740, 1.3705
Resistance: 1.4050, 1.4115, 1.4140, 1.4215, 1.4300

Recommendation: According to our analysis, sell the pair below 1.3970 with targets at 1.3850 and stop loss with four hour closing above 1.4050

GBP

The Cable continued to trade between the resistance level for the ascending channel between 1.5880 and 1.5915 as it attempts to close above this level to continue the incline. We expect to witness a downside correction to 1.5790 (38.2% correction) in an attempt to gather bullish momentum to support the incline to target 1.6100 as far as 1.5590 is intact.

The trading range for today is among the key support at 1.5590 and the key resistance at 1.6200

The general trend is tot eh upside as far as 1.4840 is intact with targets at 1.6600

Support: 1.5845, 1.5790, 1.5745, 1.5700, 1.5645
Resistance: 1.5890, 1.5935, 1.6005, 1.6030, 1.6100

Recommendation: According to our analysis, buy the pair above 1.5790 with targets at 1.5930 and stop loss with four hour closing below 1.5700

JPY

The Dollar recovered some of the losses versus the yen to slightly incline towards 94.55. The key resistance for the downside channel shifted to 94.85 and we expect the pair to maintain trading below this level to target 93.50 and 92.40 as far as 97.05 is intact.

The trading range for today is among the key support at 91.90 and the key resistance at 97.05

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 94.40, 93.95, 93.50, 92.95, 92.40
Resistance: 94.85, 95.25, 95.75, 96.45, 97.05

Recommendation: According to our analysis, sell the pair below 94.85 with targets at 93.50 and stop loss with four hour clsoing above 95.55

CHF

The Dollar versus Swissy pair was able to reach the key support for the downside channel to reach 1.0820 where it has currently rebounded to target 1.1095. We expect the pair to continue the correction on the intraday basis to reach 1.0960 – 1.0980 as it is pressured by momentum indicators showing the pair being oversold before reversing back to the downside to target the short term targets at 1.0745 and 1.0570 respectively as far as 1.1090 is intact.

The trading range for today is among the key support at 1.0745 and the key resistance at 1.1205

The general trend is to the upside as far as 1.0570 is intact with targets at 1.2245

Support: 1.0820, 1.0770, 1.0745, 1.0710, 1.0655
Resistance: 1.0900, 1.0960, 1.1040, 1.1090, 1.1125

Recommendation: According to our analysis, sell the pair below 1.0960 with targets at 1.0820 and stop loss with four hour closing above 1.1040

CAD

The Dollar versus Loonie was able to breach the pivotal support for the general trend at 1.1335 as it close below it where the trend is now to the downside. On the intraday, the pair may correct to the upside to reach 1.1335 in an attempt to retest the level before reversing back to the downside to target 1.0300 after successfully breaching the key support at 1.0930. The downside trend continues as far as 1.1885 is intact.

The trading range for today is among the key support at 1.0935 and the key resistance at 1.1620

The general trend is to the downside as far as 1.1885 is intact with targets at 1.0300

Support: 1.1195, 1.1170, 1.1085, 1.1040, 1.0980
Resistance: 1.1300, 1.1335, 1.1370, 1.1415, 1.1475

Recommendation: According to our analysis, sell the pair below 1.1300 with targets at 1.1195 and stop loss with four hour closing above 1.1370

Technical Analysis for Crosses

GBP/JPY

A daily detected harmonic butterfly is under progress as seen on the above chart; with a potential target for completion at 38.2% Fibonacci for the descending rally started at 215.84 areas and was bottomed out at 118.79. This pattern encourages us to say that the short term direction is to the upside targeting the mentioned level which also represents the ideal target of 127.00 % Fibonacci of XA leg at 155.80 zones. AROON indicator is to the upside. Acceleration will be with a break of 151.50 areas.

Trading range for today is among key support at 147.30 and key resistance at 155.85.

The general trend is to the downside as far as 156.20.remains intact with target at 116.00.

Support: 150.90, 149.95, 149.00, 148.25, 147.30
Resistance: 151.50, 152.25, 152.75, 153.50, 154.20

Recommendation: According to our analysis, buy the pair at 150.90 with targets at 153.50 and stop loss at 148.80.

EUR/JPY

The short term outlook has been changed to the upside, depending on the harmonic butterfly pattern which is still aiming to put a potential high around 50% Fibonacci of the entire rally started at 169.90 zones. This area represents at the same time the 127% Fibonacci of XA - perfect target – for D target at 140.90. Hence we see more upside actions today particularly with a break of 134.15 zones.

Trading range for today is among key support at 129.25 and key resistance now at 137.40.

The general trend is to the downside as far as 141.44 remains intact with targets at 100.00 followed by 88.97 levels.

Support: 132.80, 132.00, 131.50, 130.75, 130.05
Resistance: 133.60, 134.15, 134.85, 135.65, 136.10

Recommendation: According to our analysis, buy the pair at 133.00 with targets at 135.25 and stop loss at 131.15

EUR/GBP

The royal pair has obtained the support it needs from the areas around 0.8720-0.8760 inside the previous discussed spans channel, forming an overall bullish candlestick pattern. Hence will keep our outlook to the upside today supported by the bulls power gradually increasing. Carefully note that a break of 0.8840 is needed to confirm our intraday basis bullishness.

Trading range is among the key support 0.8680 and key resistance now at 0.9000.

The general trend is to the upside as far as 0.8020 area remains intact with targets at 1.0000 followed by 1.0400 levels.

Support: 0.8760, 0.8720, 0.8700, 0.8680, 0.8655
Resistance: 0.8835, 0.8865, 0.8900, 0.8930, 0.9000

Recommendation: According to our analysis, buy the pair at 0.8800 with targets at 0.8890 and stop loss at 0.8730.

Fundamental Analysis
We should see thin market conditions today due to Memorial Day trading, and I am personally taking the day off trading and analyzing with the exception of the German IFO at 04:00 EST. We'll take a fresh look at the markets after the holiday, but for now:

0400 German IFO Business Climate - (85.0 expected) This indicator has a good track record with deviations of 1 or greater.
If it comes out at 86 or higher, EUR/USD should rally 35+ pips
If it comes out at 83.9 or lower, EUR/USD should sell off by 35+ pips.

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This week's review

Another week has passed, and another week in review is here. The news is a little more spread out this week, and the United States released very few economic reports of note this week, with most of the activity coming from following around the major economic policy makers. Around the globe, a wide variety of reports were released, with varying degrees of good, bad, or expected news.

Without one obvious big story, maybe now is a good time just to jump into this week’s report on the week in review.

Starting in the States

There weren’t any traditionally major economic reports released this week from the United States, although there was a lot of news. Some events of note were Secretary of the Treasury Geithner made appearances at two major meetings, at the Senate Hearing on TARP, as well as at a meeting with the House Financial Subcommittee. The Federal Open Market Committee also released their meeting minutes, while the dollar fell in conjunction with rising oil prices. A report also showed that 44 states had lost jobs in April, although California by far and away is being hit hardest by the economic slow down, and the largest bank failure of 2009 has taken place as Florida based BankUnited was seized and sold to the Carlyle Group. All in all for the United States, it was a pretty quiet week.

A couple reports from Canada

There were two major reports released from Canada this week. One was the Consumer Price Index (CPI). The year on year results of the most recent CPI showed a changed of 0.4% as opposed to the 0.6% predicted. This shows that interest rate pressures have been minimal since oil fell from its all time high last year.

The retail sales report for the month of March was released, as well, and shows a month to month increase of 0.3% as opposed to the 0.5% that had been predicted.

Across the pond to the Isles

There were several major reports to come from the Brits this week. First, the Consumer Price Index year on year numbers for April show a change of 2.3%, which is slightly off the 2.4% that was predicted, but not by enough to make a lot of waves.

The Bank of England released minutes to their meeting, but this was overshadowed by the Retail Sales report that would follow. The retail sales report for April showed slightly better than expected gains of 2.6% as opposed to the 2.4% that had been projected.

And last but not least, the GDP for the year was released and showed a -4.1% contraction from last year’s first quarter, as well as a -1.9% contraction in the first quarter of 2009 versus the fourth quarter of 2008.

Over the Channel to the Continent

There were two important economic reports from the European Union this week. The first was the Euro-Zone trade balance, which showed a surplus of 0.4 billion Euro. Expectations had been for a -0.3 billion deficit, and the surplus is due in part to slightly better than expected exports and continuing reduction of retail spending curbing the demand for imports.

In addition to this, the Euro-Zone ZEW economic survey for the month of May showed a surprising upsurge in optimism. While a score of 18 was predicted, the actual score turned out to be much higher at 28.5, showing that a large percentage of economists involved believe that there is reason to be optimistic about the direction the economy is taking, even if the early signs aren’t all sunshine and roses.

Across Asia to Japan

Japan only released one major report this week. The Gross Domestic Product 1^st quarter annualized report showed a horrendous drop of -15.2%, which was still better than the -16.1% predicted, but still too much of a down number to take any positive comfort from.

A duo from the Aussies

There were two reports of note from Australia. One was that Treasury Secretary Henry took the time to speak publically on the economy and progress being made towards recovery. The second was the “Consumer Inflation Expectation” that came in at 2.3%, and is a number that may bear some watching.

In Summary

It was a mixed bag of news reports this week, with some nations unusually quiet while others had some good or bad news to share. On the positive side, the general optimism about the economy turning around by the end of the year seems to not only be holding, but perhaps even spreading to other nations whose economists were not so optimistic even a few weeks ago. It’s a cautious optimism for sure, but even when reports come out with bad news, the overall feel of things is more stable than previous weeks.

So keep up with your fundamental and technical analysis, and as always, good trading!

Technical Analysis for Major Currencies
EURO
The Euro versus Dollar pair continued to incline after correcting to the downside yesterday to reach the 23.6% as it breached the critical resistance at 1.3805 and near the 1.3950 level which may force the pair back to the downside. We expect the pair to correct to 1.3850 to build a solid base before rebounding back to the upside targeting 1.4100 on the short term as far as 1.3690 remains intact.
The trading range for today is among the key support at 1.3580 and the key resistance at 1.4180
The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120
Support: 1.3850, 1.3780, 1.3725, 1.3690, 1.3640 Resistance: 1.3950, 1.3990, 1.4055, 1.4100, 1.4180
Recommendation: According to our analysis, buy the pair above 1.3850 with targets at 1.4040 and stop loss with four hour closing below 1.3780
GBP
After correcting to the downside, the Cable rebounded to the upside towards the key resistance for the upside channel to touch it several times as seen in the above image where we expect to witness a slight downside correction on the intraday basis to reach 1.5760 and 1.5680 at most to gather bullish momentum before inclining on the short term to target 1.6300. The 1.5550 support level must remain intact for the incline to continue for today.
The trading range for today is among the key support at 1.5550 and the key resistance at 1.6200
The general trend is to the upside as far as 1.4840 remains intact with targets at 1.6600
Support: 1.5760, 1.5680, 1.5645, 1.5550, 1.5490 Resistance: 1.5880, 1.5925, 1.6005, 1.6070, 1.6100
Recommendation: According to our analysis, buy the pair above 1.5760 with targets at 1.5880 and stop loss with four hour closing below 1.5680
JPY
The bearish pressure on the pair took the USD/JPY to the downside as expected to near our initial target at 93.50 where we still hold our outlook for further declines towards 92.40 on the intraday basis. We may witness high volatility in an attempt to gather momentum to decline and breach the minor support (near 94.00) and may build a solid base at 94.55 before reversing to the downside. The short term downside trend remains as far as 97.00 is intact.
The trading range for today is among the key support at 91.90 and the key resistance at 97.00
The general trend is to the downside as far as 102.60 is intact with targets at 84.95 and 82.60
Support: 93.95, 93.50, 92.95, 92.40, 91.90 Resistance: 94.55, 95.25, 95.75, 96.45, 97.00
Recommendation: According to our analysis sell th epair below 94.55 with taregts at 93.50 and stop loss with four hour closing above 95.25
CHF
The Dollar versus Swissy fluctuated heavily around the 1.0980 pivotal support as it breached it to the downside nearing our second target at 1.0880. Momentum indicators show the pair being oversold which may result in an upside correction towards 1.0980 to retest the broken trend before reversing back to the downside. We still hold our outlook for further declines towards 1.0845 and 1.0745 before heading towards 1.0570 on the short term. This decline remains as far as 1.1125 is intact.
The trading range for today is among the key support at 1.0745 and the key resistance at 1.1445
The general trend is to the upside as far as 1.0570 is intact with targets at 1.2245
Support: 1.0880, 1.0845, 1.0795, 1.0745, 1.0710 Resistance: 1.0980, 1.1035, 1.1075, 1.1125, 1.1165
Recommendation: According to our analysis, sell the pair below 1.0980 with targets at 1.0845 and stop loss with four hour closing aboce 1.1125
CAD
After successfully reaching the 1.1335 level, the Dollar versus Loonie pair maintained levels at this level where we currently see an attempt to gather enough momentum to incline on the short term and target 1.1940 (key resistance for the descending channel). It is important to note that the 1.1335 level must remain intact for the intraday and short term upside trend to continue where a breach of this level to the downside will take the pair to 1.0935.
The trading range for today is among the key support at 1.0935 and the key resistance at 1.1655
The general trend is to the upside as far as 1.1335 remains intact with targets at 1.3000
Support: 1.1335, 1.1300, 1.1230, 1.1200, 1.1085 Resistance: 1.1380, 1.1415, 1.1475, 1.1545, 1.1600
Recommendation: According to our analysis, buy the pair above 1.1355 with targets at 1.1460 and stop loss with four hour closing below 1.1230

Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair was able to reach our initial target at 1.3720 as it continued to incline to near the pivotal resistance level at 1.3850 (61.8% correction for the key descending channel). As we see in the above image, the pair is attempting to target 1.4055 yet we may witness a slight downside correction to 1.3680 to maintain the uptrend and gather bullish momentum to breach the 1.3850 level.

The trading range for today is among the key support at 1.3580 and the key resistance at 1.4055

The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120

Support: 1.3735, 1.3680, 1.3640, 1.3580, 1.3540
Resistance: 1.3850, 1.3905, 1.3990, 1.4055, 1.4120

Recommendation: According to our analysis, sell the pair below 1.3755 with targets at 1.3680 and 1.3640 and stop loss with four hour closing above 1.3850

GBP

The Cable continued to rise yesterday to reach the key resistance of the ascending channel at 1.5795 and then again at 1.5815. We expect a slight downside correction to 1.5550 in an attempt to gather bullish momentum before rebounding back to the upside targeting 1.6300. This incline remains as far as 1.5490 is intact on the short term.

The trading range for today is among the key support at 1.5490 and the key resistance at 1.6100

The general trend is to the upside as far as 1.4840 is intact with targets at 1.6600

Support: 1.5730, 1.5685, 1.5645, 1.5550, 1.5490
Resistance: 1.5815, 1.5885, 1.5925, 1.6005, 1.6070

Recommendation: According to our analysis, sell the pair below 1.5730 with targets at 1.5645 and 1.5550 and stop loss with four hour closing above 1.5815

JPY

After the continuous pressure on the minor support level, the USD/JPY pair was able to decline as expected to reach our initial target at 94.55 and maintain levels below it. The short term remains to the downside yet we may witness a correction to the upside to 95.75 to relieve momentum indicators before reversing back to the downside towards 93.50 and 92.40 as far as 96.90 is intact.

The trading range for today is among the key support at 92.40 and the key resistance at 98.50

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 93.95, 93.50, 92.95, 92.40, 92.05
Resistance: 94.55, 95.15, 95.75, 96.45, 96.90

Recommendation: According to our analysis, buy the pair above 94.55 with targets at 95.75 and stop loss with four hour closing below 93.50

CHF

The Dollar versus Swissy declined yesterday to reach our initial target yet it faced the pivotal support which may halt further losses for the pair. The short term trend remains to the downside with the possibility of witnessing upside correctional movements to 1.1075 and 1.1155 at most (the key resistance for the downside channel) before reversing back to the downside towards 1.0745 and 1.0570. The 1.1445 level must remain intact for the declines to continue.

The trading range for today is among the key support at 1.0745 and the key resistance at 1.1445

The general trend is to the downside as far as 1.0570 remains intact with targets at 1.2245

Support: 1.0980, 1.0920, 1.0880, 1.0795, 1.0745
Resistance: 1.1075, 1.1155, 1.1250, 1.1315, 1.1355

Recommendation: According to our analysis, sell the pair below 1.1075 with targets at 1.0980 and 1.0880 and stop los with four hour closing above 1.1155

CAD

The Dollar versus Loonie continued to decline as it nearly completed the targets pointed out yesterday near the critical support at 1.1335. We expect the pair to incline towards the key resistance for the major descending channel at 1.1970 before being able to confirm the short term trend. This incline remains as far as 1.1335 is intact.

The trading range for today is among the key support at 1.1335 and the key resistance at 1.1970

The general trend is to the upside as far as 1.1335 is intact with targets at 1.3000

Support: 1.1335, 1.1300, 1.1275, 1.1200, 1.1085
Resistance: 1.1475, 1.1545, 1.1600, 1.1650, 1.1675

Recommendation: According to our analysis, buy the pair above 1.1335 with targets at 1.1475 and stop loss with four hour closing below 1.1275

Fundamental Analysis

Here is the link for the video:
05-21-2009.swf

I'm really excited because I believe things are finally starting to set up short in a much more clear manner. The downside we've anticipated in our signals over the last few days is starting to take shape and increase in probability. The S&P yesterday completed a major head fake move upwards only to get slammed down late which is further evidence of a top that should cause further dominoes to fall downwards. Getting short in this region is still getting in pretty early if we get the 100+ point decline that we are long overdue. A break of the 875 lows will solidify this view while a break upwards of Wednesday's highs will bring doubts to the table and force us to reassess our outlook. Please watch the video for a more detailed look at this and the other forecasts.

Assuming we are near the start of a more major stock decline, the strong correllation between stocks & risk aversion with JPY and USD strength should help force the major XXX/USD and XXX/JPY pairs lower. I prefer shorts on EUR/USD, AUD/USD and GBP/USD right now since they've had some nice rallies and have plenty of room to the downside, but their JPY cross counterparts should see downside as well and perhaps even more so if USD/JPY can continue its downwards momentum instead of finding support. Specifically on EUR/USD, I think a near-term selloff to 1.3585 and possibly a test of the 1.3400 lows is in the works, so I'm short now as I write this from the 1.3760's with those levels as take profits.

After yesterday's update, I've taken a much closer look at gold and unfortunately, I think it has further to rise near-term. I had thought 935-950 would contain golds rally, but with an equity market selloff likely making gold look more attractive, I think a more substantial rise to 965 to 972 is the more likely scenario. I recommend covering shorts and scalping long, or holding short through the rise and adding more in that region depending on how leveraged you are. I do still feel confident that a much more substantial decline will develop after this rally completes.

News on Wednesday was pretty insignificant with not much to work with, but it is evident that CAD releases are getting manipulated post-release, so we'll be careful on future CAD news. For Thursday:

0430 UK Retail Sales m/m (0.5% expected) - UK Retail Sales will likely get a lot more attention today and in coming months as they've changed their methodologies. This will also likely increase the probability of getting a nice surprise.
If it comes out at 1.5% or higher, GBP/USD should rally 50 pips
If it comes out at -0.5% or lower, GBP/USD should fall 50 pips

1000 US Philly Fed Index (-18 expected) - This indicator has performed rather poorly and I don't recommend trading smaller triggers; however, a big surprise could get something going. I trust a downside trigger more than a positive surprise. If there is a much smaller positive surprise, I might consider selling into a spike up and grabbing action on a reversal.
If it comes out at 0 or higher (positive) then EUR/JPY should rally by 35 pips or so
If it comes out at -36 or lower, then EUR/JPY should sell off by 40+ pips

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Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair was able to close above 1.3585 which may provide it with enough bullish momentum to target 1.385 on the medium term followed by 1.3905. We wait the confirmation for this move with a successful breach of the 1.3665 level and a four hour closing above it to accelerate the incline as far as 1.3480 remains intact.

The trading range for today is among the key support at 1.3320 and the key resistance at 1.4050

The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120

Support: 1.3585, 1.3510, 1.3480, 1.3440, 1.3375
Resistance: 1.3665, 1.3710, 1.3735, 1.3775, 1.3810

Recommendation: According to our analysis, buy the pair above 1.3665 with targets at 1.3850 and stop loss with four hour closing below 1.3510

GBP

The 1.5070 resistance level halted further declines for the Cable resulting in a rebound to the upside towards the key support for the ascending channel at 1.5245. This level is a critical pivot point on the intraday basis which may result in a reverse to the downside to breach 1.5070 to form a bearish technical pattern with targets at 1.4840. However, breaching the 1.5245 level to the upside will open the way for the pair towards 1.6000 on the short term.

The trading range for today is among the key support at 1.4840 and the key resistance at 1.5610

The general trend is to the upside as far as 1.4840 remains intact with targets at 1.6600

Support: 1.5160, 1.5070, 1.5030, 1.4940, 1.4915
Resistance: 1.5245, 1.5300, 1.5355, 1.5380, 1.5480

Recommendation: According to our analysis, buy the pair above 1.5255 with targets at 1.5355 and stop loss with four hour closing below 1.5160

JPY

The USD/JPY pair inclined to near the broken critical level at 96.55 yet we still hold our outlook to the downside targeting 94.60 and 92.40 as far as 97.85 remains intact.

The trading range for today is among the keys support at 92.40 and the key resistance at 99.60

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 95.10, 94.85, 94.60, 93.95, 93.50
Resistance: 96.55, 97.30, 97.85, 98.10, 98.85

Recommendation: According to our analysis, sell the pair below 96.55 with targets at 95.10 and stop loss with four hour closing above 97.85

CHF

After reaching the minor resistance at 1.1120, the Dollar versus Swissy declined towards 1.1025 as trading maintained levels near it yesterday. The short term trend remains to the downside towards 1.0745 and 1.0570 yet the pair may correct to the upside to 1.1255 in an attempt to gather bearish momentum. Breaching the minor resistance level at 1.1110 will open the way for the pair towards the key resistance at 1.1255; however a breach of the 1.0970 level to the downside will confirm the downside direction neglecting any upside correction.

The trading range for today is among the key support at 1.0745 and the key resistance at 1.1420

The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245

Support: 1.1025, 1.0975, 1.0920, 1.0855, 1.0795
Resistance: 1.1125, 1.1165, 1.1220, 1.1280, 1.1320

Recommendation: According to our analysis, buy the pair above 1.1110 with targets at 1.1255 and stop loss with four hour closing below 1.1025

CAD

The Dollar versus Loonie continues to incline within a minor ascending channel as it may form a flag, where the pair needs to breach the 1.1620 support level to continue the short term downside trend towards 1.1300. However, we may witness a slight upside correction to reach the key resistance for the major downside channel at 1.2070 before reversing back to the downside. the above mentioned resistance must remain intact for the decline to continue.

The trading range for today is among the key support at 1.1335 and the key resistance at 1.2070

The general trend is to the upside as far as 1.1335 remains intact with targets at 1.3000

Support: 1.1620, 1.1550, 1 .1470, 1.1410, 1.1370
Resistance: 1.1770, 1.1845, 1.1910, 1.1975, 1.2015

Recommendation: According to our analysis, sell the pair below 1.1620 with targets at 1.1470 and stop loss with four hour closing above 1.1770

Technical Analysis for Crosses

GBP/JPY

Our yesterday's predicted corrective actions occurred towards 146.40 zones which represent 38.2% Fibonacci whereas we think that the pair will start resuming the major downward actions protected by TEMA 30 and SMA 50 - currently located at 147.30 and 147.60 zones - while indicators reached the overbought areas. Hence we will keep our outlook to the downside on the intraday basis.

Trading range for today is among key support at 142.10 and key resistance at 150.00.

The general trend is to the downside as far as 156.20.remains intact with target at 116.00.

Support: 145.60, 145.00, 144.25, 143.50, 142.55
Resistance: 146.30, 147.25, 148.35, 148.90, 149.45

Recommendation: According to our analysis, sell the pair at 146.25 with targets at 143.60 and stop loss at 148.3

EUR/JPY

The pair has corrected the sharp declines respecting our yesterday's correctional scenario Now we see that 50 % Fibonacci level as seen on the above four-hour chart may be able to activate this downward actions once more under the pressure of EMA 55 and Envelopes confirming negative scenario on the intraday basis as far as 132.50 remains unbroken. AROON up is still below value of 30.00 while Stochastic is currently overlapping to the downside.

Trading range for today is among key support at 127.50 and key resistance now at 134.20.

The general trend is to the downside as far as 141.44 remains intact with targets at 100.00 followed by 88.97 levels.

Support: 130.30, 129.70, 129.10, 128.65, 127.75
Resistance: 131.30, 132.00, 132.50, 133.15, 133.70

Recommendation: According to our analysis, sell the pair at 131.00 with targets at 128.90 and stop loss at 132.70

EUR/GBP

The royal pair is moving inside our previous detected range area but we see that the intraday overall structure is bearish while the MA-RSI is approaching overbought areas and AROON oscillator is trending downward below (0) however the break of 0.8960-61.8%- Fibonacci is activating this expected intraday negative scenario. Carefully note that the bulls power is decreasing as shown on the (bulls-bears) power indicator.

Trading range is among the key support 0.8760 and key resistance now at 0.9130.

The general trend is to the upside as far as 0.8020 area remains intact with targets at 1.0000 followed by 1.0400 levels.

Support: 0.8920, 0.8900, 0.8860, 0.8830, 0.8805
Resistance: 0.9000, 0.9030, 0.9070, 0.9105, 0.9135

Recommendation: According to our analysis, sell the pair at 0.8955 with targets at 0.8845 and stop loss at 0.9040.

Fundamental Analysis

Well, we got that bounce we thought might happen across the board on equities, EUR/USD, GBP/USD, GBP/JPY, EUR/JPY, etc. and as I said yesterday, this bounce is a great opportunity to short all of these respective pairs in my opinion. There is still the possibility that daily chart upwards momentum takes us to new highs, but I feel that is a much smaller possibility than significant downwards price movement. Any decent break of the lows on these pairs will signal more downside momentum, but with all of them so near some consolidation highs, I think it's a decent time to get short on those currencies, but keep in mind that we do have the potential of another push higher before downside resumption. Yesterday's 0830 news was mixed so there was no clear signal there. For Friday:

0200 German GDP s.a. q/q (-3.0% expected) - This should be good for a 40-50 pip move on EUR/USD if there's a good surprise, but it may not be a big enough of a concern to reverse the trend, so I'd look to book quicker profits on a counter trend move and milk it longer on a move along with the trend.
If it comes out at -2.8% or higher, EUR/USD and EUR/JPY should rise by 40-50 pips.
If it comes out at -3.2% or lower, EUR/USD and EUR/JPY should fall by 40-50 pips.

0830 US CPI Core m/m (0.1% expected) - This should create a broad based USD move similar to what we saw last month, but I would only trade it if both the Core and the Headline numbers come out in the same direction. If there's a conflict like there was last month, I'd prefer to stay out.
If it comes out at 0.2% or higher, EUR/USD should fall by 30-40 pips.
If it comes out at 0.0% or lower, USD/JPY should fall by 30-40 pips.

Economic Calender

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FX Technical Analysis

EURUSD

Comment: Consolidating in a neat little range just under this year's highs (1.3801 on the 8th January and 1.3739 on the 19th March). It is just a matter of time before we rally through here, with the Swiss franc snapping close on the Euro's heels, behind the Yen. One-month at-the-money implied volatility appears to have based at the pivotal 13.00% area and is now expected to pick up towards 19.00%.

Strategy: Buy at 1.3550; stop below 1.3400. Add to longs on a sustained break above 1.3750 for 1.3800 and then 1.4000.

Direction of Trade: →↗

Chart Levels:

Support	Resistance
1.3525 "	1.3602
1.35	1.3645
1.3465	1.3722
1.3400*	1.38
1.33	1.3965

GBPUSD

Comment: Consolidating fairly neatly, is not overbought and momentum is steadily bullish. We expect January's high at 1.5375 8th January to be tested some time this week, with the 9-day moving average at 1.5095 hopefully helping to push it up to here. Another round of buy stops is likely above 1.5500.

Strategy: Buy at 1.5125; stop well below 1.5000. Add to longs on a sustained break above 1.5375 for 1.5500 short term and then 1.5725/1.5800.

Direction of Trade: →↗

Chart Levels:

Support	Resistance
1.5100 "	1.5212
1.5069	1.528
1.5	1.5354/1.5375*
1.4940*	1.5535
1.4835	1.5725

USDJPY

Comment: Dropping quickly to the bottom of a large Ichimoku 'cloud' and will probably try and hold above here this morning, maybe all day. The move adds weight to our view that price action since February is some sort of irregular 'head-and-shoulders' top and because many Yen crosses look similar the Yen should outperform most currencies over the next month or so. If not today then next week we favour a re-test of the 50% Fibonacci retracement at 94.25 and the March low at 93.55.

Strategy: Attempt shorts on a bounce to 96.00, adding to 96.70; stop above 98.00. Add to shorts below 95.00 for 94.25, possibly 93.55.

Direction of Trade: →

Chart Levels:

Support	Resistance
95.14/95.00* "	95.75
94.5	96
94.25/94.15*	96.45
93.75	96.7
93.55*	97.5

EURJPY

Comment: Hovering at the 50% Fibonacci retracement of the most recent rally in the middle of a very large Ichimoku 'cloud'. Chikou Span has dropped below the moving averages which help to turn momentum bearish. Eventually we favour a drop to the 126.00 area, maybe more.

Strategy: Attempt shorts at 129.50, adding to 131.00; stop above 134.85. Add to shorts on a sustained break below 128.00 for 126.40.

Direction of Trade: →

Chart Levels:

Support	Resistance
128.87 "	129.98
128.3	130.5
127.25	131
126.40/126.10*	132
125.65	134.40/134.85

Fundamental Analysis

Here is the video:
05-14-2009.swf


Some great trading yesterday as just about everything worked out well... our sells in stocks and many currency pairs were pretty well timed and we got a nice break on the BoE Inflation Report. With all the doom and gloom coming out of the BoE with that release, it's really exacerbated the flipping of sentiment negative that we've seen, and a more substantial decline in EUR/USD, and XXX/JPY pairs is starting to take shape. As I write this, it looks like a potential short term bounce is brewing, but I would see that as more of an opportunity to enter a short on the bounce, or add to or reenter shorts you many have taken profits on. I talk about this more in detail in the video.

Stocks may find support as well in this 775-885 range on the S&P as channel support as held for quite some time; however, any decent bounce to 900 or above should be seen as a good shorting opportunity with 914 as a high level that should hold for some time. Longer term, a steep decline in stocks will find a bottom somewhere above 666 and set the stage for a rally to new 2009 highs; however, the precise level it will find that support is currently unclear.

Retail sales in the US yesterday was also negative catching the markets off guard and with that prenews buying we forecasted that developed, there was a lot of quick selling as a result of the bad release. Gold is wavering around right now and a bit unclear with mixed fundamental pressures all fighting to take hold. For news tomorrow:

0830 US Core PPI m/m (0.1% expected) - Inflation numbers have a bit of a mixed effect on USD at times, so I would look to trade this on USD/JPY to play it a little safer. Look for the Unemployment Claims numbers to help with this trade in order to have more confidence in it with higher claims providing selling pressure and lower claims helping the buying side.
If PPI Core comes in at 0.3% or higher, USD/JPY should rally by 20-40 pips
If PPI Core comes in at -0.1% or lower, USD/JPY should fall by 20-40 pips

NZ Retail Sales I don't think is a very good news trade nowadays so I recommend skipping it.
Economic Calender for today
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Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair continued to incline to reach levels above 1.3700 before reversing back to the key support at 1.3585. We still hold our outlook to the upside with targets at 1.3815 ahead of the critical 1.3855 level which may determine the medium term trend where a breach of this level will take the pair to as far as 1.4200. This short term incline remains as far as 1.3440 is intact.

The trading range for today is among the key support at 1.3440 and the key resistance at 1.4050

The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120

Support: 1.3630, 1.3585, 1.3560, 1.3500, 1.3440
Resistance: 1.3710, 1.3735, 1.3775, 1.3810, 1.3855

Recommendation: According to our analysis, buy the pair above 1.3630 with targets at 1.3735 and stop loss with four hour closing below 1.3560

GBP

After successfully breaching the resistance levels yesterday, the Cable was able to build a solid base on the intraday and short term trend to gradually incline as it targets 1.6000. However, the pair must breach the 1.5485 level and maintain levels above 1.5190 to continue the upside trend yet we may witness a slight downside correction towards 1.5155 in an attempt to breach it and head towards 1.4850.

The trading range for today is among the key support at 1.4860 and the key resistance at 1.5525

The general trend is to the upside as far as 1.4850 remains intact with targets at 1.6600

Support: 1.5235, 1.5190, 1.5155, 1.5070, 1.5030
Resistance: 1.5300, 1.5345, 1.5380, 1.5480, 1.5505

Recommendation: According to our analysis buy the pair above 1.5235 with targets at 1.5345 and stop loss with a four hour closing below 1.5155

JPY

The USD/JPY pair was able to reach the technical targets for the bearish pattern in an attempt to breach the key support at 96.30 yet it rebounded back to the upside to maintain trading above this level. The bullish harmonic pattern seen has been completed yet we are currently waiting for a close above 96.30 to confirm the intraday trend to the upside targeting 97.65 – 98.10 after gathering bullish momentum. This incline remains as far as 95.75 is intact.

The trading range for today is among the key support at 94.45 and the key resistance at 101.40

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 96.30, 95.75, 95.20, 94.85, 94.45
Resistance: 97.20, 97.65, 98.10, 98.85, 99.05

Recommendation: According to our analysis, buy the pair above 96.30 with targets at 97.65 and 98.10 and stop loss with four hour closing below 95.75

CHF

The Dollar versus Swissy was able to touch the 1.0980 level, which was yesterday's target; before rebounding back to the upside in an attempt to trade within a minor downside channel as seen in the above image. Our outlook remains to the downside to breach the 1.0980 level before reaching 1.0745 as an initial target before heading towards 1.0570 on the short term. This decline remains as far as 1.1300 is intact.

The trading range for today is among the key support at 1.0745 and the key resistance at 1.1400

The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245

Support: 1.0980, 1.0920, 1.0855, 1.0795, 1.0745
Resistance: 1.1075, 1.1110, 1.1165, 1.1220, 1.1265

Recommendation: According to our analysis, sell the pair below 1.0980 with targets at 1.0860 and stop loss with four hour closing above 1.1075

CAD

For the second consecutive day, the 1.1670 level was able to halt further inclines for the Dollar versus Loonie pair to reach the key resistance for the downside channel at 1.2110 and therefore the pair is to decline to levels below 1.1565 where a four hour closing below this level will open the way for the pair towards 1.1456 (key support for the descending channel) and then off to 1.1300. The short term downside trend remains as far as 1.1670 is intact where a breach of this level will reverse movements towards 1.1760 and 1.2110 respectively.

The trading range for today is among the key support at 1.1335 and the key resistance at 1.1975

The general trend is to the upside as far as 1.1335 remains intact with targets at 1.3000

Support: 1.1565, 1.1530, 1.1465, 1.1410, 1.1370
Resistance: 1.1610, 1.1670, 1.1730, 1.1815, 1.1875

Recommendation: According to our analysis, sell the pair below 1.1565 with targets at 1.1465 and stop loss with four hour closnig above 1.1670

Fundamental Analysis

Many USD pairs like the EUR/USD, GBP/USD, NZD/USD and some others are approaching some former high fibbonacci resistance on the daily chart. While the picture continues to highlight some nice bullish momentum, with many USD pairs overextended into resistance, it looks like a good setup for a short to medium term short. Watch the video for more details there. After pushing through 919, gold is looking potentially short term bullish, but the potential for a medium to long term significant decline is still quite palpable, so I'd play it with either a short term buy looking for the 935-950 range to take profits, or wait for a potential rally to that region to get short for a longer position/swing trade. Stocks are starting to exhibit signs of waning momentum and this time sentiment is really starting to flip a bit negative along with it. I think a 100 point or so pullback is inevitable on the S&P and with lower highs and lower lows on the hourly chart, I think it may be brewing even now.

Tuesday saw the UK Claimant Count Change released "accidentally" early in the NY session and came out much better than expected, although that did not benefit the GBP greatly. Because of that there is no 0430 EST release out of the UK, and all eyes will be focused on the 0530 BoE Inflation Report.

0530 BoE Inflation Report - The last 4 straight quarters have produced very large down moves on GBP on a consistent basis; however, the picture seems to be changing in the UK and this could really go either way. I'm expecting a little bit of early buying on GBP/USD early in the session, but it likely be met with some stiff selling heading into this report as people could fear some sobering projections. Fundamentally, there are 3 aspects to look at in this report:
Quantitative Easing Language - This is the main thing the market is looking for on this report. Reassurring language that makes it seem as though the Asset Purchases are working well and further expansions are not needed will be GBP bullish, while language either concerned about its effectiveness or hints that the program is likely to be expanded either further will be GBP bearish.
Growth and Inflation Forecasts - Very pessimistic language on growth and worries about deflation will lead to selling pressure while more optimistic outlooks on growth and more concern on inflation will likely lead to buying pressure.

0830 US Core Retail Sales (0.2% expected) - This should have a good reaction out of the yen crosses as it did last month, but I expect some prenews buying pressure on those pairs like EUR/JPY, GBP/JPY and AUD/JPY as many news items like these have been surprising to the upside and some speculators may want to get in on it early.
If it comes out at 1.0% or higher, EUR/JPY should rally by 40-50 pips (if there is very noticable prenews buying though, those gains may be shortlived)
If it comse out at -0.8% or lower, EUR/JPY should sell off by 40-50 pips regardless of whether prenews buying materialized.

Economic calender

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Trade Tips for Today

Here are my predictions for the ranges and biases of

The four major Forex pairs:

* EUR/USD: Looking for prices to move between
1.3449 and 1.3776. The EUR/USD closed down
during today's session. This pair is starting to move

sideways and has a positive bias at this time.

* USD/JPY: Looking for prices to move between
96.51 and 99.56. The USD/JPY closed down
for today's session. This pair is moving sideways

and does not have a bias at this time.

* GBP/USD: Looking for this pair to move between
1.4922 and 1.5376. The GBP/USD closed down for
today's session. This pair is moving sideways and

has a positive bias at this time.

* USD/CHF: Looking for this pair to move between
1.0933 and 1.1198. The USD/CHF closed up during
today's session. This pair is moving sideways and

has a negative bias at this time.
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