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Technical Major Currencies
Written by article default Tuesday, 02 August 2011 07:50
Morning Report
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The pair didn’t consolidate above 1.4445, where it declined sharply reaching the harmonic pattern’s second target, which formed a bearish bat pattern at 61.8% Fibonacci correction of the CD leg. The sharp bearishness occurred yesterday could form a new harmonic technical pattern, which could be (not confirmed yet) a butterfly harmonic pattern, where this pattern will be ideal at 1.4035, but the critical level of 1.4070 shouldn’t be ignored. This pattern also matches the extended targets of the bearish bat pattern. After all, we expect a downside move to control the pair’s movement, while stability below 1.4275 should support our expectations; noting that, consolidation below 1.4335 is necessary for our negative outlook to remain valid.
The trading range for this week is among the major support at 1.4035 and the major resistance at 1.4425
The short-term trend is to the upside with steady daily closing above 1.2795 targeting 1.5135.
| Support | 1.4215 | 1.4165 | 1.4125 | 1.4070 | 1.4035 |
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| Resistance | 1.4275 | 1.4335 | 1.4375 | 1.4425 | 1.4470 |
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| Recommendation | Based on the charts and explanations above we recommend selling the pair around 1.4275 and take profit in stages at 1.4215, 1.4125 and 1.4070 and stop with 4-hour closing above 1.4375 might be appropriate | ||||
Great British Pound (GBP)
Morning Report
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"Breaching through 1.6365 -76.4% of CD - will assist bears to dominate the market". This was the major sentence written purposely in our previous report although we have been neutral.
Indeed, the aforesaid level is very sensitive and breaching it has sent the pair lower below SMA 50 as seen on the provided chart. The aforesaid breakout could be another negative catalyst that encourages us to say that, the pair started to lose its upside steam. Furthermore, it could be an indication that 88.6% Fibonacci retracement of CD leg for the bullish harmonic AB=CD pattern will cap the movements over upcoming sessions. Thereby, we believe that the bearishness will continue over intraday basis, but not before breaching 1.6250 decisively. Our bearish scenario is supported by the consecutive negative divergences appearing on RSI 14 of the main four hour graph and the negative effect of yesterday's bearish engulfing candlestick pattern, seen on secondary image.
The trading range for today is among key support at 1.6000 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 | 1.6225 | 1.6075 | 1.6000 | 1.5935 |
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| Resistance | 1.6365 | 1.6420 | 1.6500 | 1.6535 | 1.6595 |
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| Recommendation | Based on the charts and explanations above our opinion is, selling the pair below 1.6250 targeting 1.6025 and stop loss above 1.6400 might be appropriate. | ||||
Japanese Yen (JPY)
Morning Report
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The dramatic bounce from 76.25 level yesterday could be assist the pair to start drawing the awaited "A-B-C" recovery for the suggested IM-impulsive wave that started at 81.45 - as seen on the provided four hour graph. At the same time, the positive divergence of RSI 14 is still appearing despite touching levels below 76.40- low of March, 2011 – thus, we believe that more upside actions could be seen over intraday basis, supported by the magnificent positive closing above 76.40 areas. A break of 78.05 is needed to accelerate the bullish scenario. Conversely, areas between 76.40 and 76.25 should hold if the pair tried to penetrate them again.
The trading range for today is among key support at 75.60 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 | 77.10 | 76.75 | 76.40 | 76.00 | 75.25 |
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| Resistance | 77.65 | 77.80 | 78.35 | 78.90 | 79.30 |
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| Recommendation | Based on the charts and explanations above our opinion is, buying the pair at 77.20 targeting 79.20 and stop loss below 75.90 might be appropriate. | ||||
Swiss Franc (CHF)
Morning Report
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The pair continues to trade negatively, as shown above we see the pair below the downside trend’s main support. The SMA 20 and 50 are negative; however, Stochastic is turning positive reaching above the 50 points level, while the RSI is still moving sideways. Our negative expectations remain valid as long as the pair is stable below 0.8015, but due to the high risks associated with this alternative, we will stay aside today.
The trading range for this week is among the major support at 0.7665 and the major resistance at 0.8030.
The short-term trend is to the upside with steady weekly closing above 0.7920 targeting 0.8930.
| Support | 0.7785 | 0.7750 | 0.7680 | 0.7665 | 0.7610 |
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| Resistance | 0.7830 | 0.7875 | 0.7920 | 0.7965 | 0.8015 |
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| Recommendation | Based on the charts and explanations above we recommend observing the pair for more confirmations | ||||
Canadian Dollar (CAD)
Morning Report
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After reaching 0.9490, the pair inclined sharply and we see now it is stable above the bullish AB=CD harmonic pattern’s first target. Technical rules of harmonic analysis indicate that stability above the first target, which represents 38.2% Fibonacci correction (in our scenario at 0.9545), supports the pair to test the second target at 61.8% Fibonacci correction (the second target in our scenario is at 0.9635). Therefore, we expect the upside movement to extend, but heavily fluctuations are possible as Stochastic started to show some kind of negativity.
The trading range for today is among the major support at 0.9445 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 | 0.9520 | 0.9490 | 0.9445 | 0.9400 | 0.9385 |
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| Resistance | 0.9600 | 0.9625 | 0.9680 | 0.9700 | 0.9770 |
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| Recommendation | Based on the charts and explanations above our opinion is buying the pair around 0.9520 and take profit in stages at (0.9590, 0.9635 and 0.9700) and stop loss with 4-hor closing below 0.9445 might be appropriate. | ||||