Signals Technical Analysis

Forex Technical Update Prev: EUR/USD in Correction from 200SMA…(7/12) EUR/USD - Bernanke’s testimony talks of stimulus and equities react positively. - EUR/USD surges pass 1.41. - 1.4220 area is next, A break above this level invalidates a bearish impulse wave count. - The filling of the opening gap to this week can also invalidate the bearish outlook. - The bearish outlook is towards 1.3750 to test a channel support shown in the daily charts. - The bullish outlook is to 1.4370 in the short-term.   Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

EUR/NZD is continuing to fall inside the Falling Wedge chart pattern identified by Autochartist on the daily charts. The overall Quality of this chart pattern is measured at the 5 bar level which reflects the following values of the individual Quality indicators: low Initial Trend (measured at the 3 bar level), above-average Uniformity and Clarity (both rated at the 6 bar level). This chart pattern continues the prevailing downtrend visible on the daily and the weekly charts. Point A of this chart pattern formed near the combined resistance area made out of the round price level 1.8800 and the 50% Fibonacci Retracement of the preceding downward impulse (which itself started from the 61,8% Fibonacci Correction of the previous longer-term weekly down impulse, as can be seen on the second chart below). Points C and A enclose the sharp upward ABC correction which was completed by the first downward impulse of this chart pattern (from A to D) – breaking the former...

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EUR/USD The first pair that we will be looking at today is the Euro against the US dollar. As you can see, the 1.3500 area is still holding up as a battleground to determine the future this pair. Today's action saw a strong move down below the 1.35 area, only to be turned around and repelled yet again. During the US session, the Euro has gained and has managed to stay above the 1.35 level on the close. Looking at the daily candle, you can see that we have formed a doji, which perfectly describes how this pair has been behaving. We simply have had mass confusion and fighting at the 1.35 level recently. Normally this type of bar will signal a decision to be made in the near future, with a break below being the stronger of the two signals as the weekly candles have all been fairly weak. A break above would suggest that we are going to continue to...

EUR/USD Looking at the weekly EUR/USD chart, we see that the third shooting star in a row has been formed. It coincides with a previous upward trend line, retesting its resolve. This shows a very bearish tone to this pair. However, it should be noted that the 1.35 level is a massive support area. It looks to have a bias to the down side, but the support is in that 1.35 area is of concern for bears. If we get a close below 1.35, 1.29-1.30 will probably be the first target, with further weakness leading to 1.25 or so. USD/JPY The weekly chart has been bearish for the last couple of years in this pair. Recently however, we have been making higher lows on the weekly chart. This suggests that there might be some strength forming in this pair. Last year, we broke a significant bearish trend line that we have found supportive since. Last week formed a hammer, and we have had a large...

EUR/USD Yesterday formed a bullish “hammer” at the 1.35 level which coincided with previous support and resistance. 1.35 did in fact turn out to be supportive. However, at the end of the day – the up move turned out to be short lived. This shows that bulls may be running out of steam. In the earlier part of the day, it looked like this pair was going to take off. However, in the afternoon part of the New York session, the pair sold off. Today’s bar looks to be forming a “shooting star”, which is the exact opposite of yesterday’s bar. This shows confusion, and lack of direction. The weekly chart shows the two previous “shooting stars” which are still intact. Because of this, it appears the bulls are running into trouble between 1.36 and 1.40, while the 1.35 level still looks very supportive. Any close below 1.35 becomes a strong sell signal. EUR/AUD Yesterday’s hammer looked to be very supportive at the 1.34-1.35...

EUR/USD Weekly This week saw the second shooting star in a row at the underside of the most recent uptrend line. This shows that the buyers are getting exhausted. However, due to the supportive nature of 1.35, this isn’t a straight sell until we get a close below it. If the 1.35 area is breached, the 1.29-1.30 area should be the next target. With the formations and trend being down, odds favor a break down. However, until that 1.35 area is breached, we can only assume it’s going to consolidate for a while. CHF/JPY This pair has become completely locked in consolidation. In the past we have seen various rectangles form, and that is where we are at now. In the 85-90 rectangle area we now find ourselves, as it have been distinct over the last few weeks. We are currently stuck between the 86 and 88 handles. Any close above the 88 handle should see a run towards 90, and a close between 86...

UK data has increased the market’s confidence that the BOE will hike rates and this has UK interest rates broadly higher, with the short-sterling futures strip yields rising 6-9 basis points and the 2-year gilt yield rising 7 basis points. The differential between the US short term yield and UK short term yields have reached a 12 month high. Short term yields in the US remain low. The FOMC has made it clear to the market that they plan on keeping short term borrowing rates targeted to zero for an extended period. The increasing yield differential is driving the price of the Pound relative to the US dollar higher. A break above 1.6250, will likely lead to a new bull trend. It seems that the BOE and ECB are likely on a shorter calendar for tightening rates than the FOMC. On Wednesday, the equity markets in the US were mixed despite better than expected employment data from ADP, helped offset profit taking....

TOKYO, Feb 2 (IFR) - EUR/JPY looks to be very well bid following the break above 1.3800 in EUR/USD. USD/JPY heaviness does look to be a drag but the cross could trade higher on a decisive break above 112.70, currently resistance on the hourly chart. A trade through this level suggests a retest of the 113-handle and a possible retest of the 114.02 high seen on January 27. Offers are eyed ahead of 112.70 and 113.00 but trader stops lurk above both of these levels. Larger stops are seen above 114.10. Asia saw a high of 112.70 yesterday and the high so far this morning has been 112.64. Support in the cross is seen from around the 112.48 low seen so far this morning. More is seen ahead of 112.00 and then at 111.80-90, 111.88 the retracement low seen in London overnight. Technically, EUR/JPY is looking good after a rejection of moves into its Ichimoku cloud. Two attempts down on Friday...

After opening lower, last week, the EURO to DOLLAR recovered rather nicely and climbed higher. However it did cross and important 1.344 line and eventually closed at 1.338. Going forward today and this week, 1.344 is the important resistance line to watch. Going above 1.357 support line was only minor, and is now a minor line of resistance. Going higher, 1.37 served as support and is now another minor line of resistance. Going to 1.378 was the peak before falling in November. This is now the important resistance level. Looking down; minor and immediate support is around 1.3325. We find even stronger support at 1.3080. Also look at 1.2970 at the bottom which occurred last in November. This will be another important support line.