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Markets

Will the European currencies prove strength, or will the Dollar has the final say?

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EURUSD – The whole short-term uptrend at stake

The Euro broke the resistance specified in Friday’s report 1.3212, and successfully reached the first suggested target 1.3311, reaching the highest level in more the 3 month in the Dollar-aftermath which followed the coming out of the US monthly employment report. Technically, what is really important is that we came close on Friday to a very important trend line, and we are still around it: the trend line rising from June 29th low on hourly the chart, which is running at 1.3194. Therefore, we should keep eyes & mind open today, and consider all scenarios, and keep separate trading plans ready. If we test the above mentioned trend line, it will be the single most important technical to start the week with. As we said, this line is at 1.3194, and should not be broken in order to keep the technical outlook positive. But before we get ahead f ourselves, there is another important support at 1.3265, if broken we will target a test of the above mentioned line. And if it is also broken, we will witness a strong drop to 1.3118 at the very least. On the other hand, short term resistance is at 1.3306, and it is the key for more gains. If we break it, we will target 1.3383 & 1.3442. When approaching such an important trend line, the following move is usually massive, whether it is broken or it manages to reverse the direction. That is why we will focus our attention on this line, until it is broken to the downside, or the price shoots up very far from it!

Support:

• 1.3265: short term 38.2% Fibonacci.

• 1.3194: the rising trend line from Jun 29th low, the most important short term support.

• 1.3118: Aug 5th low.

Resistance:

• 1.3306: Fibonacci 61.8% for the drop from Friday’s top.

• 1.3383: Mar 31st low.

• 1.3442: Feb 19th important low.

USDJPY – The slow drop goes on

The Dollar/Yen broke the support specified in Friday’s report 85.74, and dropped to a new yearly low at 85, only 19 pips above the 15 year low we have seen in November 09! With this, the falling wave has successfully managed to reach yet another target, but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, since we still expect, as we did before, that it will dive below 84.81. Therefore, we expect the price to reach this target, and as we do, we also realize that the limited volatility of this pair indicates that this will take some time. As for the short term, the support is at 85.31, and breaking it would indicate that we are already moving lower with the objective of breaking 84.81, and reaching lows not seen in 15 years. This break will target 83.87 & at a later time 82.65. The resistance is at 85.89, and if broken, the price will continue its bounce, targeting 86.58 & 87.49.

Support:

• 85.31: Aug 4th low.

• 83.87: Fibonacci extension level 138.2% for the falling wave from 86.86, compared to the wave which started at 88.10.

• 82.65: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.

Resistance:

• 85.89: the falling trend line from Jul 28th high on intraday cahrts.

• 86.58: the retest level for the rising trend line which combines the lows of Jul 16th & 22nd.

• 87.49: Jul 29th high.

GBPUSD – Breaking Fibonacci 61.8%

After dropping 140 pips from it, and trading below if for several days, the Pound came back to break the important Fibonacci level 1.5965 on Friday, in the wake of the disappointing US Jobs report, which harmed the greenback in front of almost every other major currency! Breaking such an important retracement level: the correction level for a move which achieved more than 2800 pips, and lasted more than 9 months, especially after the price stops accurately at it, then comes back to break it, is a massive technical event! We have to face some annoying questions now: was this break just an act of over disappointing in the dollar after some pretty important numbers have hit the market? And will the markets bounce away from favoring the Pound as the new week develops? Or is this an actual break regardless of the affect of the American report? We believe that surpassing the important level we talked about several times with 31 pips is enough to say that it is actually broken, regardless of what figures came out to help with that! However, we need the price to hold above 1.5922, and to break the resistance 1.5987 in order to keep the positive outlook shiny! If we break the resistance 1.5987, we will jump to 1.6067 & then 1.6152. But if we break the support 1.5922, the drop will be hard, and we will target 1.5817, and may be later the important 1.5720.

Support:

• 1.5922: the rising trend lone from Jul 22nd bottom on the hourly chart.

• 1.5817: Thursday’s low.

• 1.5720: Fibonacci 61.8% for the whole rise from 1.5549.

Resistance:

• 1.5987: the falling trend line from Friday’s top on intraday charts.

• 1.6067: Feb 3rd high.

• 1.6152: Aug 27th 2009 low.

EURUSD – The whole short-term uptrend at stake

The Euro broke the resistance specified in Friday’s report 1.3212, and successfully reached the first suggested target 1.3311, reaching the highest level in more the 3 month in the Dollar-aftermath which followed the coming out of the US monthly employment report. Technically, what is really important is that we came close on Friday to a very important trend line, and we are still around it: the trend line rising from June 29th low on hourly the chart, which is running at 1.3194. Therefore, we should keep eyes & mind open today, and consider all scenarios, and keep separate trading plans ready. If we test the above mentioned trend line, it will be the single most important technical to start the week with. As we said, this line is at 1.3194, and should not be broken in order to keep the technical outlook positive. But before we get ahead f ourselves, there is another important support at 1.3265, if broken we will target a test of the above mentioned line. And if it is also broken, we will witness a strong drop to 1.3118 at the very least. On the other hand, short term resistance is at 1.3306, and it is the key for more gains. If we break it, we will target 1.3383 & 1.3442. When approaching such an important trend line, the following move is usually massive, whether it is broken or it manages to reverse the direction. That is why we will focus our attention on this line, until it is broken to the downside, or the price shoots up very far from it!

Support:

• 1.3265: short term 38.2% Fibonacci.

• 1.3194: the rising trend line from Jun 29th low, the most important short term support.

• 1.3118: Aug 5th low.

Resistance:

• 1.3306: Fibonacci 61.8% for the drop from Friday’s top.

• 1.3383: Mar 31st low.

• 1.3442: Feb 19th important low.

USDJPY – The slow drop goes on

The Dollar/Yen broke the support specified in Friday’s report 85.74, and dropped to a new yearly low at 85, only 19 pips above the 15 year low we have seen in November 09! With this, the falling wave has successfully managed to reach yet another target, but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, since we still expect, as we did before, that it will dive below 84.81. Therefore, we expect the price to reach this target, and as we do, we also realize that the limited volatility of this pair indicates that this will take some time. As for the short term, the support is at 85.31, and breaking it would indicate that we are already moving lower with the objective of breaking 84.81, and reaching lows not seen in 15 years. This break will target 83.87 & at a later time 82.65. The resistance is at 85.89, and if broken, the price will continue its bounce, targeting 86.58 & 87.49.

Support:

• 85.31: Aug 4th low.

• 83.87: Fibonacci extension level 138.2% for the falling wave from 86.86, compared to the wave which started at 88.10.

• 82.65: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.

Resistance:

• 85.89: the falling trend line from Jul 28th high on intraday cahrts.

• 86.58: the retest level for the rising trend line which combines the lows of Jul 16th & 22nd.

• 87.49: Jul 29th high.

GBPUSD – Breaking Fibonacci 61.8%

After dropping 140 pips from it, and trading below if for several days, the Pound came back to break the important Fibonacci level 1.5965 on Friday, in the wake of the disappointing US Jobs report, which harmed the greenback in front of almost every other major currency! Breaking such an important retracement level: the correction level for a move which achieved more than 2800 pips, and lasted more than 9 months, especially after the price stops accurately at it, then comes back to break it, is a massive technical event! We have to face some annoying questions now: was this break just an act of over disappointing in the dollar after some pretty important numbers have hit the market? And will the markets bounce away from favoring the Pound as the new week develops? Or is this an actual break regardless of the affect of the American report? We believe that surpassing the important level we talked about several times with 31 pips is enough to say that it is actually broken, regardless of what figures came out to help with that! However, we need the price to hold above 1.5922, and to break the resistance 1.5987 in order to keep the positive outlook shiny! If we break the resistance 1.5987, we will jump to 1.6067 & then 1.6152. But if we break the support 1.5922, the drop will be hard, and we will target 1.5817, and may be later the important 1.5720.

Support:

• 1.5922:the rising trend lone from Jul 22nd bottom on the hourly chart.

• 1.5817:Thursday’s low.

• 1.5720: Fibonacci 61.8% for the whole rise from 1.5549.

Resistance:

• 1.5987: the falling trend line from Friday’s top on intraday charts.

• 1.6067: Feb 3rd high.

• 1.6152: Aug 27th 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.

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