Technical Analysis for Major Currencies
EURO
The Euro versus Dollar pair was able to reach our suggested targets at 1.3920 last Friday before rebounding back to the upside to complete the short term trend. We expect an incline on the intraday basis with targets at 1.4340 after breaching the minor resistance level at 1.4105. The short term trend to the upside remains as far as 1.3920 is intact.
The trading range for today is among the key support at 1.3780 and the key resistance at 1.4340
The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120
Support: 1.3940, 1.3850, 1.3815, 1.3775, 1.3745
Resistance: 1.4050, 1.4105, 1.4180, 1.4245, 1.4340
Recommendation: According to our analysis, buy the pair above 1.3940 with targets at 1.4105 and stop loss with four hour closing below 1.3850
GBP
The Cable is still on its way towards are target at 1.5770 yet momentum indicators are showing the pair trading within an oversold are which may result in an upside correction. We still believe the pair is to decline on the intraday basis towards the above mentioned support after breaching the minor support at 1.5900 before rebounding back to the upside on the short term to target 1.6600.
The trading range for today is among the key support at 1.5715 and the key resistance at 1.6600
The general trend is to the upside as far as 1.4840 remains intact with targets at 1.6600
Support: 1.5900, 1.5850, 1.5770, 1.5715, 1.5700
Resistance: 1.5975, 1.6015, 1.6075, 1.6135, 1.6200
Recommendation: According to our analysis, sell the pair below 1.5900 with targets at 1.5770 and stop loss with four hour closing above 1.5985
JPY
The USD/JPY pair inclined heavily last Friday to breach the pivot resistance for the short term at 97.75. This breakout may alter the short term trend to the upside yet we expect the pair is t decline on the intraday basis to retest 97.75 before confirming the next intraday trend to determine whether the short term decline had ended or will it continue towards 92.40. After touching the 97.75 level will monitor the price action and see the next four hour closing to determine the intraday and short term trends.
The trading range for today is among the key support at 95.30 and the key resistance at 100.70
The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60
Support: 97.75, 97.20, 96.50, 95.90, 95.35
Resistance: 98.85, 99.55, 100.25, 100.65, 101.00
Recommendation: According to our analysis, sell the pair below 97.75 with targets at 96.50 and stop loss with four hour closing above 98.30
CHF
The Dollar versus Swissy was able to reach 1.0900 before reversing back to the downside due to the key resistance for the upside channel and the clear overbought signals seen on momentum indicators. We expect the pair is to decline on the intraday basis supporting the short term trend where our next targets are at 1.0500 as far as 1.0980 remains intact.
The trading range for today is among the key support at 1.0500 and the key resistance at 1.1050
The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245
Support: 1.0815, 1.0745, 1.0665, 1.0635, 1.0555
Resistance: 1.0890, 1.0980, 1.1020, 1.1080, 1.1125
Recommendation: According to our analysis, sell the pair below 1.0890 with targets at 1.0745 and stop loss with four hour closing above 1.0980
CAD
The Dollar versus Loonie pair was able to touch the key resistance for the descending channel yet the 1.1200 level was able to halt further incline. We expect the pair to reverse to the downside on the intraday basis to target 1.0700 and complete the short term direction towards 1.0300 as far as 1.1335 remains intact.
The trading range for today is among the key support at 1.0780 and the key resistance at 1.1395
The general trend is to the downside as far as 1.1870 remains intact with targets at 1.0300
Support: 1.1100, 1.1065, 1.1015, 1.0970, 1.0905
Resistance: 1.1235, 1.1310, 1.1335, 1.1370, 1.1415
Recommendation: According to our analysis, sell the pair below 1.1235 with targets at 1.1100 and stop loss with four hour closing above 1.1335
Technical Analysis for Crosses
GBP/JPY
Sterling versus Japanese yen is still forming the bearish harmonic daily butterfly pattern around the expected -PRZ- potential reversal zone, reviving that the major short term trend is to the downside while the intraday basis is negative also as seen on the secondary four-hour image which shows that a bearish candlestick pattern has been formed with a negative close below 161.8% Fibonacci level. Therefore we will keep our outlook to the downside today particularly if a breakout occurred below 155.86 zones. RSI and AROON support our scenario.
Trading range for today is among key support at 152.60 and key resistance at 161.50.
The general trend is to the downside as far as 164.90 remains intact with target at 116.00.
Support: 156.40, 155.85, 155.00, 154.35, 153.50
Resistance: 157.00, 157.80, 158.90, 159.35, 160.00
Recommendation: According to our analysis, sell the pair at 157.25 with targets at 154.50 and stop loss at 159.30.
EUR/JPY
The CD leg of the bearish harmonic butterfly that is appearing on the daily basis succeeded to form a short term Elliott cycle with a possible top around 139.25 as seen on the above four-hour chart. Now corrective A-B-C waves are needed to complete the sequence. Hence we expect downside actions today to form the mentioned correction particularly if it succeeded to breach the lower line of the ascending channel.
Trading range for today is among key support at 134.15 and key resistance now at 140.95.
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: 137.30, 136.70, 136.00, 135.45, 135.00
Resistance: 138.00, 138.40, 139.00, 139.45, 140.00
Recommendation: According to our analysis, sell the pair at 137.70 with targets at 135.50 and stop loss at 139.45.
EUR/GBP
The overall bullish structure continues to be formed on the above four-hour chart for the royal pair; we see that previous candlestick formed a bullish engulfing pattern that closed above the critical areas of 0.8760. So that the established positive scenario that occurred after breaching the upper line of our detected descending channel is still in favor on the intraday basis while bulls-power is increasing. Only a break of [0.8680-0.8660] zones can damage the intraday positive scenario.
Trading range is among the key support 0.8630 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, 0.8670, 0.8630, 0.8600
Resistance: 0.8790, 0.8840, 0.8870, 0.8900, 0.8930
Recommendation: According to our analysis, buy the pair at 0.8760 with targets at 0.8850 and stop loss at 0.8680.
Fundamental Analysis
Here is the video:
06-08-2009.swf
Big big big turns here on the USD. I explain it in more detail in the video, so please give it a good watch/listen, but suffice to say that I view these turns on the GBP/USD and EUR/USD to be part of a major Primary degree trend shift into USD strength that has thousands of pips further to go. So, I suggest you work a position trade short, sell it on rallies, or just prepare your bias for a protracted downtrend over the next 2-6 months. If the picture changes, we'll be nimble and react accordingly, but that the overwhelmingly convincing case right now in currencies and gold for that matter. Even with NonFarm Payrolls much better than expected, the overall risk appetite rally on EUR/USD and EUR/JPY lasted only 8 minutes. Such good news rejections coupled with record/peak optimism on the EUR/USD and GBP/USD last week are clear indications of a major market top. I don't have a specific target on the GBP/USD just yet, but I believe we'll hit EUR/USD 1.2100 and potentially lower on this decline over the next few months. That said, nothing goes in a straight line, so manage your risk properly and see rallies as a welcome opportunity to short.
Stocks are a bit of a laggard as they often are. We may see modest new highs, or we may have already topped. Ususally big reversals in currencies and some commodities happen ahead of stocks and stocks are soon to follow, but sometimes they take days or weeks to get rolling. We saw enough of a rally rejection on Friday though to get exicited about the downside and start buying some puts though, and I'm looking to add to that position on a break of 923 as that will more concretely confirm the impending downside is at hand.
On the news front, Monday and Tuesday this week have no economic releases that are tradable. However, I think it's an excellent time to join up with the Diamonds room since we're catching this major reversal as it develops and offering a lot of educational webinars to pick up the slack on these slower weeks when there's not a lot of economic data.
