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Technical Major Currencies
Written by article default Wednesday, 27 July 2011 09:08
Morning Report
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Stability above 88.6% Fibonacci correction of XA leg weakens the bearish bat harmonic pattern, but momentum indicators are within overbought areas, where trading below 1.4490 should keep our suggested downside trend likely. Nevertheless, consolidation above the X top at 1.4565 is risky, and could extend the suggested upside trend. Caution is required, while as we await the breach of the mentioned support or resistance to define the next move, with the conflict seen between momentum indicators and the pair’s trend yesterday and today.
The trading range for today is among the major support at 1.4275 and the major resistance at 1.4780.
The short-term trend is to the upside with steady daily closing above 1.2795 targeting 1.5135.
| Support | 1.4490 | 1.4410 | 1.4375 | 1.4335 | 1.4275 |
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| Resistance | 1.4535 | 1.4565 | 1.4625 | 1.4680 | 1.4720 |
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| Recommendation | Based on the charts and explanations above we recommend selling the pair with 4-hour closing below 1.4490 and take profit in stages at (1.4410, 1.4335 and 1.4275) and stop loss with 4-hour closing above 1.4565, OR buying the pair with 4-hour closing above 1.4565, and take profit in stages at (1.4655, 1.4780) and stop loss with 4-hour closing above 1.4490 might be appropriate. | ||||
Great British Pound (GBP)
Morning Report
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The Cable succeeded in achieving consecutive four hour closing above 76.4% retracement of CD leg for our efficient bullish harmonic AB=CD pattern as seen on the provided graph. According to the harmonic rules, the path becomes clear towards 100% or rather the full correctional level of the aforementioned leg at 1.6550. Having said so, we shouldn't ignore the technical obstacle which resides at 1.6445 -88.6% Fibonacci- as it may cause some kind of fluctuation. We have two positive signs on trend indicators Vortex and SMA 50. Henceforth, we hold onto our positive predictions over intraday basis, supported by our harmonic studies. As far as trading remains above the pivotal support of 1.6250, price behaviors will neglect the obvious overbought sign on RSI 14 indicator.
The trading range for today is among key support at 1.6190 and key resistance at 1.6620.
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 | 1.6365 | 1.6310 | 1.6250 | 1.6225 | 1.6190 |
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| Resistance | 1.6445 | 1.6500 | 1.6550 | 1.6580 | 1.6620 |
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| Recommendation | Based on the charts and explanations above our opinion is, buying the pair around 1.6395 targeting 1.6550 and stop loss below 1.6280 might be appropriate. | ||||
Japanese Yen (JPY)
Morning Report
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The pair is still moving steadily downwards, achieving one more negative daily closing below 76.4% retracement of the move from 76.40 to 85.50 and 23.6% Fibonacci of the bearish wave from 85.90 to the aforesaid trough. Ribbons lines -EMA 10 to 80- are still covering the clear bearish trend; thus, we still see chances for reaching the previous detected technical objective of the descending triangle pattern, seen on the provided image. Our pattern proved its accuracy during the past and current week and the pair becomes very close to the target. Therefore, we should watch the price behaviors around the target as a break of 77.10 will trigger a panic sell-off towards the extended technical objectives of the classical pattern -we will discuss it in the proper time-. Ultimately, risk versus reward ratio is very high today.
The trading range for today is among key support at 76.75 and key resistance now at 79.55.
The general trend over short term basis is to the upside targeting 87.45 as far as areas of 76.40 remain intact.
| Support | 77.45 | 77.30 | 77.10 | 76.75 | 76.40 |
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| Resistance | 78.35 | 78.90 | 79.30 | 79.55 | 79.80 |
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| Recommendation | Based on the charts and explanations above, we believe that risk versus reward ratio is too high; thus, we prefer staying aside. | ||||
Swiss Franc (CHF)
Morning Report
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Over weekly basis, we can recognize a harmonic Deep Crab pattern, but this pattern is not ideal due to the length of the CD leg, which is less than 261.8% of the BC leg, but we could take the pattern into consideration because the pair achieved the primary conditions. The pattern’s potential reversal zone is at 0.8015, and consolidation above it signals a possible upside correction. A breach of 0.7920 with a daily closing will negate our expectations.
The trading range for today is among the major support at 0.7830 and the major resistance at 0.8250.
The short-term trend is to the upside with steady Weekly closing above 0.7920 targeting 0.8930.
| Support | 0.8000 | 0.7965 | 0.7920 | 0.7875 | 0.7830 |
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| Resistance | 0.8080 | 0.8110 | 0.8150 | 0.8195 | 0.8205 |
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| Recommendation | Based on the charts and explanations above our opinion is buying the pair with around 0.8015, targeting 0.8250, and stop loss with daily closing below 0.7920 might be appropriate today. | ||||
Canadian Dollar (CAD)
Morning Report
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Stability above 0.9400 keeps the likelihood for an upside move, which requires 4-hour closing above 0.9445 to be confirmed. The bullish AB=CD pattern is still valid, and the pair is trading around the potential reversal zones for the pattern; the pair should not stabilize with 4-hour closing below the support at 0.9385 and preferably consolidate above 0.9400 for our expectations to prevail.
The trading range for today is among the major support at 0.9305 and the major resistance at 0.9635.
The short-term trend is to the downside as far as 1.0665 remains intact targeting 0.9000.
| Support | 0.9400 | 0.9385 | 0.9350 | 0.9305 | 0.9285 |
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| Resistance | 0.9445 | 0.9485 | 0.9500 | 0.9545 | 0.9600 |
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| Recommendation | Based on the charts and explanations above our opinion is buying the pair with 4-hour closing above 0.9445 and take profit in stages at (0.9500, 0.9545 and 0.9635) and stop loss with 4-hour closing below 0.9385 might be appropriate | ||||