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Eur/Sek in Search of Fresh Higher Low Ahead of Next Upside Extension
Written by article default Monday, 01 August 2011 07:30
EuroWeekly Report 01/08 – 05/ 08/ 2011
The pair rebounded sharply to the upside after approaching 1.4215, but stable below 23.6% Fibonacci correction of the bearish bat harmonic pattern’s CD leg at 1.4415. We also see Stochastic is within overbought areas; in addition, the pair breached the harmonic support line at 1.4445 and consolidated below it. In the meanwhile, stability above the first target of the harmonic pattern at 38.2% Fibonacci correction of the CD leg at 1.4335 reduces the effects of the harmonic pattern, while the RSI is stable above the 50 points level. Therefore, we stay neutral, unless a 4-hour closing below 1.4335 confirms the suggested downside trend.
The trading range for this week is among the major support at 1.4040 and the major resistance at 1.4620
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 | 1.4040 |
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| Resistance | 1.4415 | 1.4445 | 1.4490 | 1.4550 | 1.4620 |
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| Recommendation | Based on the charts and explanations above we recommend selling the pair with 4-hour closing below 1.4335 targeting 1.4215 and stop above 1.4415 might be appropriate | ||||
Great British Pound (GBP)
Weekly Report 01/08 – 05/ 08/ 2011
The pair failed to complete the potential head and shoulders top formation on past Friday and it was suitable that we suggested a start for selling pressures below 1.6250 as the pair couldn’t maintain levels below it, then began inclining. Now, we can see a negative divergence on RSI 14 after touching 88.6% Fibonacci retracement of CD leg for the bullish harmonic AB=CD pattern appearing on the main chart. This divergence may send it below 1.6365-76.4%- again, limiting the technical targets below 100% and 127.2% of the aforementioned leg. When we look deeper at the secondary graph of the daily basis, we will notice how the pair is presently moving within very sensitive areas as it tests the previous broken uptrend line from 1.4225 to the peak of 1.6745. To recap, only a break of 1.6365 will assist bears to dominate the market; whilst breaching through 1.6545 will give the leadership to the bulls.
The trading range for this week is among key support at 1.5780 and key resistance at 1.6745.
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 | 1.6250 | 1.6125 | 1.6075 | 1.5935 |
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| Resistance | 1.6500 | 1.6550 | 1.6595 | 1.6655 | 1.6745 |
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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)
Weekly Report 01/08 – 05/ 08/ 2011
The pair succeeded in reaching our previous proposed technical target of the efficient descending triangle pattern of the daily basis-we recommend reviewing the previous report for more details about the classical overview-. Moving to the four hour chart, we can see an IM-impulsive- wave presenting itself to us from 81.45 to Friday's recorded low at 76.85. The two positive divergences on RSI 14 could be a sign that reactionary waves (A-B-C) are under preparation to complete the IM structure. A break of 78.05 is needed to make sure that the pair has maintained SMA 20 levels. On the downside, breaching through 76.40 will bring panic selling pressures and will damage the bullish outlook of this week.
The trading range for this week is among key support at 75.25 and key resistance now at 80.05.
The general trend over short term basis is to the upside, targeting 87.45 as far as areas of 76.40 remain intact.
| Support | 77.10 | 76.75 | 76.40 | 76.00 | 75.25 |
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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 our opinion is, buying the pair above 78.05 targeting 80.05 and stop loss below 76.40 might be appropriate. | ||||
Swiss Franc (CHF)
Weekly Report 01/08 – 05/ 08/ 2011
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The pair breached 0.7920 but returned to trade above this level at the start of this week, which indicates that the current situation is very critical. This level represents a critical barrier on the short-term and median-term time frames. During Friday, the crab pattern failed (explained in our previous report), while consolidation above 0.7920 alongside with rebounding from the downside trend’s main support will not completely negate the suggested upside trend on the median-term time frame. We will stay neutral in our weekly report, but we recommend checking our next reports for confirmations regarding the pair’s movement between 0.7920 and the downside trend’s main support at 0.7850.
The trading range for this week is among the major support at 0.7700 and the major resistance at 0.8255.
The short-term trend is to the upside with steady weekly closing above 0.7920 targeting 0.8930.
| Support | 0.7900 | 0.7850 | 0.7800 | 0.7755 | 0.7700 |
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| Resistance | 0.7950 | 0.8015 | 0.8080 | 0.8110 | 0.8195 |
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| Recommendation | Based on the charts and explanations above we recommend observing the pair for more confirmations | ||||
Canadian Dollar (CAD)
Weekly Report 01/08 – 05/ 08/ 2011
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The bullish AB=CD pattern supported the pair successfully to rebound sharply to the upside as we expected in the past week. The pair is currently stable above the MA 50 at 0.9500 and above 23.6% Fibonacci correction at 0.9490. The harmonic pattern is still valid and could extend the upside move, reaching the pattern’s second target and maybe the first extended target during this week, where these targets are at 61.8% and 78.6% Fibonacci corrections at 0.9635 and 0.9700 respectively. Our expectations remain valid, but stability above 0.9400 is required.
The trading range for this week is among the major support at 0.9350 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 | 0.9490 | 0.9445 | 0.9400 | 0.9385 | 0.9350 |
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| Resistance | 0.9550 | 0.9600 | 0.9625 | 0.9700 | 0.9770 |
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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. | ||||