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Technical Major Currencies
Written by article default Monday, 25 July 2011 08:00
EuroWeekly Report 25/07 – 29/ 07/ 2011
The potential reversal zone -PRZ- of our caught bearish Gartly harmonic pattern affected the pair, and we see that it has reached 23.6% Fibonacci correction at 1.4330 inline with our previous expectations. But, the first target of the most harmonic patterns begins at 38.2% Fibonacci correction of the CD leg, which means that Gartly harmonic pattern’s first target is around 1.4270. Therefore, trading below 1.4490, argues us to expect a downside correction during this week. A breach of the last level mentioned may support the pair to reach the X point near the peak around 1.4580.
The trading range for this week is among the major support at 1.4060 and the major resistance at 1.4650.
The short-term trend is to the upside with steady daily closing above 1.2795 targeting 1.5135.
| Support | 1.4330 | 1.4270 | 1.4220 | 1.4170 | 1.4100 |
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| Resistance | 1.4400 | 1.4420 | 1.4450 | 1.4490 | 1.4580 |
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| Recommendation | Based on the charts and explanations above we recommend selling the pair around 1.4400 and take profit in stages at (1.4330, 1.4270, and 1.4220) and stop loss with 4-hour closing above 1.4490 might be appropriate. | ||||
Great British Pound (GBP)
Weekly Report 25/07 – 29/ 07/ 2011
The bullish harmonic AB=CD pattern which has been formed from 1.6745 to 1.5780 succeeded in sending it to approach the first extended technical objective at 76.4% of CD leg as we discussed earlier. We are not completely sure if the pair will penetrate this sensitive level around 1.6365 to achieve more extended waves according to the harmonic rules of achieving the targets or it will accede to the obvious overbought sign appearing on RSI 14 as the pair always acts in response to RSI 14 in both overbought and oversold cases as seen on the graph. Consequently, we will be neutral until we see whether the pair will hit the initial 76.4% retracement of CD leg or the bearishness will come back into focus. The secondary image of the daily studies proves that the pair has retested the previous broken uptrend line which carried the bullish wave from 1.4225 to the peak of 1.6745 and this is an additional technical process that prevents us from supporting a specific direction for the time being since this action is always followed by resuming the recently established new trend appearing after the breakout.
The trading range for this week is among key support at 1.5935 and key resistance at 1.6550.
The general trend over short term basis is to the downside, targeting 1.4225 as far as areas of 1.6875 areas remain intact.
| Support | 1.6250 | 1.6190 | 1.6125 | 1.6075 | 1.5935 |
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| Resistance | 1.6365 | 1.6440 | 1.6500 | 1.6550 | 1.6610 |
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| Recommendation | Based on the charts and explanations above our opinion is, staying aside until a clearer sign appears to pinpoint the upcoming big move. | ||||
Japanese Yen (JPY)
Weekly Report 25/07 – 29/ 07/ 2011
The pair is fluctuating within a tight range after achieving consecutive daily closings below 76.4% retracement of the rally from 76.40 to 85.50 and 23.6% Fibonacci of the bearish wave from 85.90 to the aforesaid trough as seen on the provided daily graph. This fluctuation is a normal reflection for the clear oversold signal appearing on RSI 14 and it may send the pair mildly upwards to retest the lower line of Ribbons lines -EMA 10 to 80-before resuming the bearishness towards 77.10- the technical objective of the descending triangle. The negativity of Vortex indicator -trend indicator- is another technical catalyst that argues us to suggest bearish scenario for this week.
The trading range for this week is among key support at 76.40 and key resistance now at 81.15.
The general trend over short term basis is to the upside, targeting 87.45 as far as areas of 76.40 remain intact.
| Support | 78.20 | 77.85 | 77.45 | 77.10 | 76.40 |
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| Resistance | 78.90 | 79.30 | 79.80 | 80.05 | 80.75 |
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| Recommendation | Based on the charts and explanations above our opinion is, selling the pair around 78.95 targeting 77.10 and stop loss above 80.25 might be appropriate. | ||||
Swiss Franc (CHF)
Weekly Report 25/07 – 29/ 07/ 2011
During the past week, we expected the pair to settle for 0.8255, but we haven’t witnessed any consolidation above this level, which supported a downside wave to control the pair’s movement with the start of this week. Stability below this level should extend the downside trend, and consolidation below 0.8195 should support the bearishness. The pair is approaching the critical level of 0.8015, which is very strong, but until then we should enjoy the downside trend after the descending channel has controlled the pair’s movement.
The trading range for today is among the major support at 0.7920 and the major resistance at 0.8600.
The short-term trend is to the downside with steady daily closing below 1.0330 targeting 0.8000.
| Support | 0.8110 | 0.8080 | 0.8015 | 0.7970 | 0.7920 |
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| Resistance | 0.8195 | 0.8255 | 0.8305 | 0.8350 | 0.8440 |
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| Recommendation | Based on the charts and explanations above our opinion is selling the pair around 0.8195 targeting 0.8015 and stop loss above 0.8255 or might be appropriate. | ||||
Canadian Dollar (CAD)
Weekly Report 25/07 – 29/ 07/ 2011
During the past week, the downside trend was limited between the support at 0.9445 and 0.9400; where as shown above, these levels are potential reversal zones of the bullish AB=CD pattern, which supports the pair now to move toward the first target of 38.2% Fibonacci correction of the CD leg at 0.9560. But, SMA 50 is at 0.9535 and Stochastic is within overbought areas, which may force negative pressures and could lead heavy fluctuations. In general, we expect an upside trend for this week, but a breach of 0.9560 is required for the upside trend to extend, where stability above this level could push the pair toward 0.9640 in stages. A breach of 0.9400 should negate our expectations.
The trading range for today is among the major support at 0.9300 and the major resistance at 0.9770.
The short-term trend is to the downside as far as 1.0665 remains intact targeting 0.9000.
| Support | 0.9500 | 0.9445 | 0.9400 | 0.9350 | 0.9300 |
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| Resistance | 0.9560 | 0.9600 | 0.9640 | 0.9680 | 0.9700 |
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| Recommendation | Based on the charts and explanations above our opinion is buying the pair around 0.9480 targeting 0.9640 and stop loss below 0.9400 might be appropriate this week. | ||||