VIDEO: Forex Forecast February 8, 2011 |
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 level, and we are finding that the area seems to be a thick supportive zone, just as the 1.39-1.40 area is massive resistance. Today’s bar did break above the top of the hammer, which would have been a signal for bulls, but like the EUR/USD pair – the strength failed in the afternoon of North American trading.
Any close below the recent lows of 1.33 would be a clear bearish signal, while a move upward will find resistance at 1.37 and 1.39, respectively. Any sell signal could yield 300 or 400 pips, while any move up could be choppy as it would be counter-trend.
GBP/AUD
A recent daily trend line going back to August has recently been broken, and price has “walked” down the line, but not broken below it. This is common as a trend appears to change. The former resistance trend line should continue to be supportive. Of interest is the 1.58 area as it is right under the former down trend line, adding support at current levels.
As long as this pair stays above 1.58, this pair looks constructive. Any daily close below 1.58 or the previous down trend line, this would signal a resumption of the overall down trend. If this pair does turn upward, the initial resistance will be found at 1.62 or so.
Originally posted here.
