Shutterstock photo
Markets

A lot of changes heading our way!

Shutterstock photo

Shutterstock photo

EURUSD – Testing 1.3026? (2)

The Euro didn’t even come close to the support specified in yesterday’s report 1.2872, finding a bottom at 1.2950, and refusing to drift away from the 1.30 level for more than half a cent, before trying to break 1.3026, without being able to hold above it. Therefore, once again, we await a test of the important resistance 1.3026, where there is the 2-month high. But, we will not lose interest in our newly found rising channel we talked about yesterday, and when we look at the hourly chart, we find that Friday’s dive has stopped at the bottom of a new rising channel which will be placed under our focus for today, knowing that the bottom of the channel is at 1.2903. Moreover, we find the area between Fibonacci 61.8% at 1.3075 and May 10th top 1.3092 to be very interesting. Thus, we recommend giving attention to all these areas, and we believe that each of them will play a role in dictating today’s direction! In case we break the support at 1.2903, we will drop with the Euro for today and probably the next few days, targeting 1.2792, and 1.2691. On the other side, the resistance is at the important 1.3026. If broken, the Euro will continue its bounce from the channel bottom, targeting 1.3092 & 1.3200.

Support:

• 1.2903: the bottom of the rising trend channel on the hourly chart.

• 1.2792: Friday’s low.

• 1.2691: Fibonacci 38.2% for the whole rise from 1.2150.

Resistance:

• 1.3026: Jul 20th top & 2-month high.

• 1.3092: May 10th high.

• 1.3200: Apr 23rd low.

USDJPY – Wave C developing smoothly and approaching one of the ideal targets

The Dollar penetrated the resistance specified in yesterday’s report 87.37, and came extremely close to the suggested target 88.01 (yesterday’s high was 87.96). As we have said several times in last week’s reports, signs show that the possibility of a rising correction to correct the fall from June 3rd top 89.09 to July 16th low 86.25 is growing. On the top of these signs: the inverted hammer formation, which appeared on the daily chart, and the completed 5-wave move, and further more what looks to be the corrective waves (a) & (b) forming in an ideal manner (please refer to the attached chart), and wave (c) developing in an ideal fashion, and approaching one of its ideal targets (short term 61.8% Fibonacci level at 88.01). Therefore, and even though we are negative about this pair on the medium term, we should not neglect these signs which force themselves upon us for today! Short term support is at 87.25, and if broken, the price will resume its drop after a 3-wave correction, targeting 86.46 & 85.84. Resistance is at 88.01. A break here indicates that the odds of a continuation of the correction of the 5 waves down from 92.87 are still massive. This will target Fibonacci retracement levels for the whole drop from 92.87, with the first 2 of them at 88.78 & 89.56. It is worth mentioning that breaking wave 5 bottom 86.25 even with a few pips would strongly indicate the termination of the correction we are currently living, and will officially announce a new wave down!

Support:

• 87.25: the rising trend line from Jul 22nd low on the hourly chart.

• 86.46: Jul 19th low.

• 85.84: Nov 30th 2009 low.

Resistance:

• 88.01: Fibonacci 61.8% for the drop from 89.09.

• 88.78: Fibonacci 38.2% level for the whole drop from 92.87 (the 5 waves down).

• 89.56: Fibonacci 50% level for the whole drop from 92.87 (the 5 waves down).

GBP/USD – All eyes on 1.5685!

The Pound broke the resistance specified in yesterday’s report 1.5527, reached a new 5-month high, and stopped before our suggested target with a single pip! (The high at the moment of preparing this report is 1.5624). Breaking 1.5520 yesterday is definitely a positive technical sign, but the Pounds strength will be questionable today, as we approach the top of the rising channel on the hourly & daily charts, which is at 1.5685. This will be the toughest test for the Pound in these areas, much harder than 1.5520 or 1.5625. Thus, we will not take a positive stand towards this pair before breaking this level, and we do not recommend doing so. Short term support is at the Asian session low 1.5560, which was tested 3 times, and yet it survived and pushed the price up above 1.56. If broken, we could be entering a comprehensive correction for the whole rising move from 1.5122. This correction would target Fibonacci retracement levels 1.5432 & 1.5373. On the other side of the river, and as we have mentioned above, the resistance is at 1.5685. And only with a break here the Pound will be able to move forward, targeting 1.5762 & 1.5830.

Support:

• 1.5560: Asian session low, and a very obvious support.

• 1.5432: Fibonacci 38.2% for the whole rise from 1.5122.

• 1.5373: Fibonacci 50% for the whole rise from 1.5122.

Resistance:

• 1.5685: the top of the rising channel on the hourly & daily charts, and Feb 18th high.

• 1.5762: Feb 10th important top.

• 1.5830: Dec 30th 2009 low.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx