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Technical Major Currencies
Written by article default Friday, 29 July 2011 08:00
Morning Report
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The downside move stopped before reaching 61.8% Fibonacci correction of the crab harmonic pattern’s CD leg at 1.4215, which represents the second target of the harmonic structure and currently the pair returned to trade around 38.2% Fibonacci correction at 1.4335, which is the first harmonic target. Harmonic studies indicate that consolidation below the first target suggests a retest of the second one, while 50% Fibonacci correction acts as a minor support that stopped the downside move. We still think that the pair may extend the downside movement, but requires consolidation with 4-hour closing below 1.4415.
The trading range for today is among the major support at 1.4125 and the major resistance at 1.4535
The short-term trend is to the upside with steady daily closing above 1.2795 targeting 1.5135.
| Support | 1.4335 | 1.4275 | 1.4215 | 1.4165 | 1.4125 |
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| Resistance | 1.4375 | 1.4415 | 1.4470 | 1.4490 | 1.4535 |
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| Recommendation | Based on the charts and explanations above we recommend selling the pair around 1.4375 and take profit in stages at (1.4335, 1.4275 and 1.4215) and stop loss with 4-hour closing above 1.4470 might be appropriate today. | ||||
Great British Pound (GBP)
Morning Report
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The pair is consolidating between 1.6300 levels and 1.6365 since yesterday; thus, we can't judge if the bearishness started after touching the minor resistance of 88.6% retracement of CD leg for the bullish harmonic AB=CD pattern will continue sending the pair lower or the current price behavior above 61.8% is a preparation for achieving more extended targets for the harmonic formation. Breaching 1.6250 -61.8%- will indicate that 88.6% was the ceiling of the effect of this pattern. Therefore, we prefer staying aside over intraday basis.
The trading range for today is among key support at 1.6075 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 | 1.6310 | 1.6250 | 1.6225 | 1.6190 | 1.6125 |
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| Resistance | 1.6365 | 1.6415 | 1.6445 | 1.6500 | 1.6550 |
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| Recommendation | Based on the charts and explanations above our opinion is, staying aside until an actionable setup presents itself over coming sessions. | ||||
Japanese Yen (JPY)
Morning Report
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In line with yesterday's scenario, the pair declined touching 88.6% retracement of the upside rally from the significant trough of 76.40 to 85.50. This level is very important as it will define if the pair will continue achieving downside targets for our efficient descending triangle or the bearishness will be limited here. When we look deeper at momentum and trend indicator, we will notice that the bearish sign on Vortex started to become weaker; whilst RSI 14 reflects clear oversold case. Henceforth, risk versus reward ratio remains too high for intraday traders due to the sensitivity of present levels.
The trading range for today is among key support at 76.40 and key resistance now at 78.90.
The general trend over short term basis is to the upside targeting 87.45 as far as areas of 76.40 remain intact.
| Support | 77.30 | 77.10 | 76.75 | 76.40 | 76.00 |
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| Resistance | 77.90 | 78.35 | 78.90 | 79.30 | 79.55 |
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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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The level of 0.8015 doesn’t provide sufficient momentum to support the upside movement, where the pair is stable around this level and trading within a sideways range, which could push the pair to the downside targeting 0.7965, but not confirmed, where the bullish crab harmonic pattern shown above on the first chart will be completed at 0.7965, while the deep crab pattern was supposedly completed at current levels as shown on the second chart. In general, our positive expectations remain valid supported by the harmonic patterns, and require stability with daily closing above 0.7920.
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 daily closing above 0.7920 targeting 0.8930.
| Support | 0.7990 | 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 0.7965, 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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The pair is stability above the MA 50 and 23.6% Fibonacci CD leg correction of the bullish AB=CD harmonic. This positive signal could push the pair to retest 38.2% Fibonacci correction, which represents the first target of the harmonic pattern. The RSI positively breached the 50 points, which extends the positivity, but Stochastic is negative and attempting also a negative crossover. Taking all these signals together, we expect an upside move, but heavy fluctuations and bearish correctional movements could be seen.
The trading range for today is among the major support at 0.9305 and the major resistance at 0.9700.
The short-term trend is to the downside as far as 1.0665 remains intact targeting 0.9000.
| Support | 0.9490 | 0.9445 | 0.9400 | 0.9385 | 0.9305 |
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| Resistance | 0.9520 | 0.9550 | 0.9600 | 0.9625 | 0.9680 |
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| Recommendation | Based on the charts and explanations above our opinion is buying the pair around 0.9490 and take profit in stages at (0.9550, 0.9635 and 0.9700) and stop loss with 4-hor closing below 0.9400 might be appropriate. | ||||