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Technical Major Currencies
Written by article default Monday, 24 October 2011 08:33
Weekly Report 24/10 – 28/ 10/ 2011
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The pair was able to consolidate again above 127.2% Fibonacci extension of the CD leg of the bullish Crab harmonic pattern. Stability above this level at 1.3825 suggests a test of 161.8% Fibonacci extension of the same leg at 1.4010. The level of 1.4010 also represents 61.8% Fibonacci correction of the downside movement, which started from the top at 1.4550, but we expect the upside move to extend towards this level; however, we recommend reviewing our next reports, awaiting the pair’s behavior around this critical level. Failure to settle above 1.3825 weakens the extension of the upside move.
The trading range for this week is among the major support at 1.3515 and the major resistance at 1.4105.
The short-term trend is to the upside with steady daily closing above 1.2795 targeting 1.5135.
| Support | 1.3825 | 1.3710 | 1.3680 | 1.3620 | 1.3565 |
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| Resistance | 1.3880 | 1.3910 | 1.3970 | 1.4010 | 1.4070 |
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| Recommendation | Based on the charts and explanations above, we recommend buying the pair above 1.3825, and take profit in stages at (1.3910 and 1.4010) and stop loss with 4-hour closing below 1.3710 might be appropriate. | ||||
Great British Pound (GBP)
Weekly Report 24/10 – 28/ 10/ 2011
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Friday's closing above SMA 50 and above 50% Fibonacci retracement of the downside rally from 1.6615 to the significant low of 1.5270 argue us to change our last neutral stance into a bullish one. Having a deeper look at the daily studies we will find that the aforesaid downside move represents the CD leg of a potential bullish harmonic AB=CD pattern. According to harmonic rules that dominate the journey of technical targets, Fibonacci of 61.8% at 1.6100 should be touched since 38.2% was cleared earlier. Studying the movements of Sterling claim that the pair frequently tests 76.4% Fibonacci level in its corrections and actually these price behaviors match the technical idea of retesting the previous broken trend line on the provided graph. To recap, the market is quite bullish; noting that 61.8% of CD leg will be a big technical obstacle and that is why we should be careful when we enter the market this week.
The trading range for this week is among key support at 1.5555 and key resistance at 1.6440.
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 | 1.5880 | 1.5780 | 1.5720 | 1.5630 | 1.5555 |
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| Resistance | 1.6000 | 1.6100 | 1.6150 | 1.6200 | 1.6295 |
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| Recommendation | Based on the charts and explanations above our opinion is, buying the pair very carefully around 1.5900 targeting 1.6100 and stop loss below 1.5750 might be appropriate. | ||||
Japanese Yen (JPY)
Weekly Report 24/10 – 28/ 10/ 2011
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The previous detected pivotal support of 75.80 prevented the pair from collapse pushing the pair inside the sideways range trading areas. According to the classical rules, we should buy on dips of this trading range as these areas should act as strong support, but stability below SMA 20 and SMA 50 combination with a four-hour closing prevents us from obeying the rules. Furthermore, the first support below 75.80 resides around 74.50 due to using Fibonacci expansion tool as seen on the graph. From here, we prefer staying aside until the pair elucidates if it will clear the support of 75.80 or will move towards the upper line of the sideways range.
The trading range for this week is among key support at 75.20 and key resistance now at 78.45.
The general trend over short term basis is to the upside targeting 87.45 as far as areas of 75.20 remain intact.
| Support | 76.10 | 75.80 | 75.60 | 75.25 | 74.50 |
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| Resistance | 76.60 | 76.95 | 77.20 | 77.60 | 77.90 |
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| Recommendation | Based on the charts and explanations above our opinion is, staying aside until an actionable technical setup presents itself to pinpoint the next big move. | ||||
Swiss Franc (CHF)
Weekly Report 24/10 – 28/ 10/ 2011
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The pair is stable below 23.6% Fibonacci correction of the CD leg of the bearish Butterfly harmonic pattern. The pattern’s first target at 0.8695, which represents 38.2% Fibonacci correction of the same leg, was not achieved yet, while consolidation below 0.8930 supports the possibility of the downside movement. Stochastic attempts to provide a positive crossover, but this reversal needs to be confirmed by stability above 0.9030, while any trading below this level drive us to expect the downside movement to continue.
The trading range for this week is among the major support at 0.8505 and the major resistance at 0.9185.
The short-term trend is to the upside with steady weekly closing above 0.8020 targeting 0.9400.
| Support | 0.8810 | 0.8780 | 0.8750 | 0.8695 | 0.8640 |
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| Resistance | 0.8930 | 0.8970 | 0.9030 | 0.9080 | 0.9105 |
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| Recommendation | Based on the chart and explanations above, we recommend selling the pair around 0.8920, and take profit in stages at (0.8695 and 0.8700) and stop loss above 0.9030 might be appropriate this week. | ||||
Canadian Dollar (CAD)
Weekly Report 24/10 – 28/ 10/ 2011
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We recognize a possible bullish Butterfly harmonic structure, where the structure’s first potential reversal zone is at 0.9980 and also represents 127.2% Fibonacci expansion of the XA leg, while the second potential reversal zone is at 0.9905. This structure suggests a slight downside movement, before resuming the upside move this week. A breach of 0.9905 and stability below it could postpone the return of the upside move.
The trading range for this week is among the major support at 0.9970 and the major resistance at 1.0260.
The short-term trend is to the downside as far as 1.0665 remains intact targeting 0.9000.
| Support | 1.0005 | 0.9980 | 0.9950 | 0.9905 | 0.9880 |
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| Resistance | 1.0115 | 1.0185 | 1.0205 | 1.0255 | 1.0375 |
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| Recommendation | Based on the charts and explanations above, we recommend buying the pair around 09980, and take profit in stages at (1.0060 and 1.0125) and stop loss below 09880 might be appropriate this week | ||||
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