VIDEO: Weekly Forex Forecast end of week Feb. 11, 2011 |
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 move in this pair to the upside. It should be noted that the next resistance level is at 84.00, and that is only 50 pips above the close. And break above there would give the pair plenty of room before finding major resistance.
GBP/USD
The cable has had two major consolidation areas over the last two years, one between 1.60 and 1.70, and the other that we are in now, which is the 1.55-1.61 area.
The movement suggests that we are trying to be constructive in this pair over the long-term, but the recent action suggests that we may not be ready to break out of the recent consolidation area yet.
USD/CAD
This pair has been a long, slow grind down over the last couple of years, and as such any strength has been sold by the wise trader. However, we are finding ourselves at a major support area around the 0.98-0.97 handles.
If we can get a clean break below 0.97, there is almost no support until the 0.90 handle. Of course if we don’t break the current support, we will probably see a move back up to the parity level again.
EUR/JPY
This pair is at the top of its most recent range which has found it stuck between the 1.15 and 1.08 handles. It is at the upper area of the range, and it looks to continue back into that consolidation area. Any break over 1.15 would suggest a run all the way up to 1.20 as there is no major resistance above the 1.15 handle.
It should be noted that this pair tends to follow risk appetite in the markets. If the markets sell off, this pair will as well typically. With the issues in the Middle East, it is likely this pair may find trouble clearing that 1.15 level mentioned above.
NZD/USD
The New Zealand Dollar has made a monstrous run since the start of 2009, forming a massive pole and flag. Again, we seem to be close to forming another at first glance. It should be said the flag is getting a bit long to be a true flag anymore.
However, the 0.78 handle has been very strong resistance and the 0.75 level has been massive support. Because of this, we are looking more like consolidation. This chart looks very similar to the EUR/USD pair.
If we break the 0.75 handle, it would be a very bearish turn of events; however there are quite a few support levels below. Any move down could be very choppy, and there will certainly be easier shorts to take if the risk appetite comes out of the markets.
Originally posted here.
