Weakness Stays with Greenback; Yen Might Start Sliding as Well

This week, The US dollar continued to lose ground to the euro, and pound, as well as to the JPY, which competes with the USD for risk-aversion-based flow. The commodity currencies such as AUD and CAD also gained on the greenback. Even gold, which has been declining is gaining again. It appears the dollar has slid across the board. The Japanese yen may also start getting pressured, but only early signals are given to this outlook. Let’s review the technical developments for this week.

EUR/USD Nears Last Resistance Zone for Bearish Outlook (Link)

USD/JPY Remains Bearish with Negative Reversal Signal

• Daily: The USD/JPY fell below its previous support near 86.40, and tested the 86.00 level.
• This came after a rally materializing after a bullish divergence. Because the rally did not reach the previous high near 89.00, the market is showing us a negative reversal. This is a signal when the price high is lower, but the RSI high is higher.
• The projection for this is shown in the chart to about 85.20.
• This is the support zone for the USD/JPY going back to Dec 2009. The timing of the USD/JPY hitting this support, and the EUR/USD hitting an important resistance zone, might give the USD some strength in the next couple of weeks.

GBP/USD Testing Important Resistance Zone

• Daily: The GBP/USD continues to be strong this week. There was a positive reversal spotted last week, and the market continues higher after reaching the projection.
• The RSI did not develope a bearish divergence, a sign of continuing strength.
• I did mention earlier this week that the market should be nearing resistance. The 200-period moving average (in gray), is being tested, and the market continues. It is not testing an important powerline/zone that starts at about 1.57 to 1.5870(61.8% retracement).
• My take is that the market is now ranging, but is overextended to the upside. However, if the market accelerates next week, and the RSI shoots into the overbought zone. I would reconsider.
• If the market finds topping action next week, I will become more confident of this scenario.
• Next couple of weeks appear to be very crucial as the market spends time considering direction from significant powerlines, pivots, resistance, support, whatever technicians call them.

USD/CAD Breaks Below Congestion Pattern

• Daily and 1H: There isn’t much to update on the USD/CAD, except that it indeed broke below the congestion pattern. The target remains the 1.02/1.0180 area, and possibly retest of the parity level.
• The RSI shows ranging momentum, so I would start looking for bottom action soon. The weakness in the USD appears to be bringing it to major supports across the board. Will this help the greenback bounce back?
• If so, I would anticipate sharp reversals, such as a strong rally for USD/CAD from 1.018 next week, back towards 1.04, where the moving averages reside.

EUR/GBP Euro Showing Weakness

• Daily and 4H: The EUR/GBP was seen last week to decline and be supported at 0.8250. This week, the market did indeed continue the decline, but is only showing more confirmation for this outlook today.
• Looking the 4H chart, we see that the latest candle is threatening to break below the 0.8320 area. It broke it, but has not confirmed yet, and the break has not been convincing.
• This does also breaks the SMA 200 in the 4H chart.
• I am interested in seeing the reaction near 0.8250, the 61.8% retracement level. If there is a rally that breaks above the 0.84 area, I am convinced of a continuation rally.
• However, I will be looking for topping action as early as 0.8320.
• Then, the next target for decline is the previous low near 0.81/0.8060.

AUD/USD Struggling to Reach 0.91

• Daily: Last week, I anticipated further rally in the AUD/USD towards the resistance zone around the 78.6% retracement area.
• This week, the market gave us a strong bearish signal, but has not followed through. Instead, the week ended rallying, and testing this week’s high just below 0.91.
• This may complete a 2-swing correction suggesting a bearish attempt following the completion.
• There is possibility of topping action, and a decline towards 0.8550 in the short-intermediate term.

GBP/JPY Breaking Above Congestion Pattern

• Daily: The GBP/JPY did finally break above the congestion pattern we have been stalking the past several weeks now. The break is strong and has impulse type internals. The last few days saw the GBP/JPY slide but this offers a throwback.
• If the market can rally to start next week, it can go towards 140.00, with 138.65 as first resistance.
• The RSI did break above 60 temporarily, but the momentum is not convincing of a bullish rally.
• There is only a slight bias to the upside due to the strength of the rally and the weakness of the subsequent decline. Also, Elliott Wave Principles suggest internals point to bullish scenarios as well in the short-term.
• Perhaps, the Japanese yen will also take a hit. The rally in EUR/JPY and GBP/JPY is more probable if the USD/JPY can find a bottom and rally.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

Greenback Fights Back with Mixed Results

This week, the greenback is seen fighting back, although its gains have been slight. It has been most apparent with the EUR/USD. Against the USD/JPY, it is simply holding the Japanese yen from further gains. It also gained insignificantly against the Sterling. Against the AUD and CAD however, the USD actually continued to lose. These mixed results suggest that even though the USD is fighting back, it may still be weak, with the Euro even weaker. Let’s take a look at this week’s action, and see what we can anticipate.

EUR/USD Eyes 1.27, 1.25, 1.2150 (Link)

USD/JPY: In a Flat (Link)

GBP/USD Testing 1.55

• Weekly and Daily: The greenback is fighting back, but not so successfully against the Sterling. Earlier this week, as the GBP/USD started to decline, I mentioned the rising support seen in the daily chart. This was going to test the USD strength, and apparently, it was not strong enough to bring the pair below.
• The RSI in the daily forms a positive reversal, suggesting a rally towards 1.5610. Basically, the momentum shows that we may have at least another move as capitulation.
• The weekly shows that the pair is attempting to break away from a declining trendline. It has already broken an accelerated trendline, which I did not draw here.
• It appears that there will be a lot of resistance here above 1.56, so the greenback may have more help at this level to fight back.
• Then I want to see what kind of decline occurs from there, if one develops, because there is still a chance for a bearish outlook to materialize. If we are in ranging mode, there still may be some bearish outlook in the short-term after a near-term rally into 1.56.

USD/CAD in a Congestion Pattern

• Daily and 1H: The USD/CAD is in a congestion pattern. This triangle is within the context of sideways action between 1.0 and 1.08. There is also a common support at 1.02.
• The market has been in congestion with apex near 1.0450, which is apparently the equilibrium price level for the market in the recent weeks.
• My count has already wave e complete, suggesting a decline here should break below the triangle.
• The length between c and d projected to e targets 1.02. Then, if a pullback from there confirms weak bullish attempt, a subsequent bearish attempt may bring the pair closer to the parity level.
• The 1H chart shows that in the near-term, the market is testing the 1.0360 low. If this breaks, the market is likely to continue lower to 1.02, assuming the triangle pattern in complete.
• A break above the declining resistance however throws caution at this bearish short-term outlook.

EUR/GBP Euro Trying to Turn the Corner

• Daily and 4H: The EUR/GBP paused its recent rally this week, topping off at the 0.8530 area. The anticipated action from this week’s earlier EUR/GBP update is materializing. The anticipated target for this decline was the 50% retracement, 0.8330 area, and the market is just above this level, testing the 200SMA in the 4H chart.
• At the end of this decline, the market may have completed an AB=CD retracement pattern, suggesting that if this was simply a correction, bulls are looking to rally soon.
• One thing that cautions against the bullish outlook is the strength of the decline. In the daily perspective, the decline this week has been accompanied with higher volatility, which gives it more strenght. If a rally from the 0.83 area fails to break above the SMA50, which at the moment resides near 0.84, then we may have some further bias to the downside.
• In any case, the decline should see support at 0.8250, 0.82. If this breaks, the 0.81/0.8060 low is the next immediate support.

AUD/USD To Finish 2-Swing Correction Rally

• Daily: Last week, I mentioned that the AUD/USD looked bearish in the short-term, if the market breaks below the 0.8700 area. This week, the market started with a gap below, but eventually filled the gap, and continued higher.
• The rally was strong enough to break through the important resistance at 0.8880 and 61.8% retracement. It is now testing the 200SMA. All this was anticipated as resistance, but price action is strong.
• The RSI is also breaking above 60. The current rally is projected to at least 0.91. Therefore, there is still strong resistance in the 0.90-0.91 zone.
• I would like to see what kind of reaction occurs here.
• I no longer have a bearish bias on this pair. The AUD/USD is strong and appears to be starting an impulse wave.  If that is the case, the 0.8880 area should now be support.
• Therefore, I will be looking for a throwback to test this area to see if indeed the AUD/USD has turned bullish.

GBP/JPY Remains in Sideways Action

• Daily and 1H: If you have been following my updates on the GBP/JPY, you would realize how uncertain I have been about this pair and its twist and turns during the current congestion pattern seen in the daily chart.
• In the daily chart, I have shown the congestion pattern in an abcde pattern in two different ways. Trying to anticipate a completion of a pattern is always difficult, but once the market breaks out, there is a strong indication the market will go that direction.
• If the breakout is upwards, a swing projection where A = C, will target 1.40.
• I have a count in the 1H chart, but this is no where resolved. It appears that this week cmopleted an impulse wave down, and a full correction.
• Basically, if the market is held from going above today’s levels, at this 78.6% retracement level, we may have just completed a wave 1 and 2 of a fresh bearish impulse wave.
• This is one scenario. Perhaps, it is still better to wait until the breakout from this congestion pattern.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

Greenback Weakness About to be Tested

This week, the greenback continued to weaken after fighting back a bit last to end last week and the start of this week. However, we saw it slide across the board. Even more pressured were the CAD and AUD. Perhaps global growth concerns are stabilizing the EUR and GBP which has been almost singled out in April and May. The Japanese yen on the other hand is benefiting from this risk aversion.

EUR/USD Approaches Heavy Resistance (Link)

USD/JPY: Measuring the Current Downswing

• Weekly: The 87 “bottom” proved to be temporary, as the market failed to rally above 89 this week. Instead, the market declined and broke below 87.
• I mentioned a possibility of reaching below 86, so is one assessment of the downswing.
• Previous downswings have been getting shorter since 2007, causing a congestion patter. The lows are still getting lower, but at a flatter rate. We see swings taking ratios of approximately 61.8% and 78.6% of the previous swing. If the current swing is 61.8% of the previous, it is projected to 85.33. This is the first area I would start looking for a bottom.
• Then 82.50 is the next area (78.6%). If that is broken, the bottom has opened up, and 79.00 is the next target.

GBP/USD Testing 1.55

• Weekly and Daily: The market initially respected 1.52. This week however, the market plowed right through it, testing the 1.55 area, the previous high in April.
• The RSI is above 60, but today, failed to break above 70.
• This week’s strength and RSI crossing 50 in the weekly, suggests further rally can be expected next week. If the market rallies past 1.5570, it can go to the 61.8% retracement level at 1.5890/1.59 area.

USD/CAD in a Congestion Pattern

• Daily and 4H: The USD/CAD bullish, which is surprising because of major Greenback weakness. However, the same dynamic affecting the greenback is pressuring the currently growth-sensitive currencies such as the CAD, AUD and NZD.
• The USD/CAD actually gained this week, but the rally will be tested at 1.06. The rally can be projected from previous rallies towards 1.08 adn 1.1, but 1.06 is an important level to break for this outlook.
• The 1.06 area is a confluence of 61.8% and 78.6% retracement levels.
• Overall, we are in ranging action between 1.08 and 1.00 so expect some resistance at 1.08 even if 1.06 breaks.

EUR/GBP Euro Trying to Turn the Corner

• Weekly and Daily: The EUR/GBP pair continued with last week’s attempt to turn the corner and establish a bottom near the 78.6% retracement area, seen in the weekly chart.
• You can also see in the weekly that this occurs in the middle of a possible channel, but if the current low is significant, it is more of a wedge pattern, with the support flatter than the one shown above.
• The daily chart shows a break above the 50-period moving average. I mentioned last week, that a break above 0.8450 suggests a rally towards 0.88, (0.8725 is at 61.8% retracement).
• There is still a chance for the EUR/GBP to turn back lower here below 0.85.
• The daily chart also sees the RSI testing the 60 level. If it breaks above 60, the momentum has turned at least ranging if not bullish. However, if topping occurs, we may develop a negative reversal and signal a bearish attempt.
• Topping action should really require confirmation, unless it is strong, such as a 1-day candle that closes more than 80 pips (ATR) to the downside. In that case I would not expect a strong pullback.

AUD/USD Bearish in the Short-term

• Daily: The market for AUD/USD pair is respecting the previous top at 0.8880 area. Although, we may be eventually see the pair move higher, it is in the short-term bearish because it has not established the bullish mode yet. Instead, it is challenging the bearish mode, which makes it ranging.
• Being ranging, and testing a previous resistance, the short-term outlook is bearish.
• The 4H chart shows what can trigger further short-term weakness.
• Currently the market is supported repeatedly at 0.8680 area. A break below this and a pullback to confirm suggests a slide towards 0.83/0.8350 area, which is the previous support.
• This should be accompanied by a break below 40 in the RSI in the 4H chart.

GBP/JPY – Stalking Consolidation

• Daily and 4H: The GBP/JPY pair may be attempting to find a direction.
• It came to 135.80 (I mentioned resistance at 135.30, but the upper bound of the resistance is at 136, as can be seen in the daily chart).
• However, the consolidation has a slight convergence of support and resistance, making it a triangle.
• The daily chart sees a negative reversal (RSI is higher, but price level is not), so there is some bearish bias, and the market is following that at the moment. This may be a wave “e”, meaning it may be the last wave in this congestion pattern.
• However, a break out needs to be confirmed. However, the bearish outlook to me is still near-term, within the context of a consolidation pattern, unless the volatility increases too.
• One way of seeing a rise in volatility is the fact that the market in the 4H chart took out the former took, and came down to take out the former low. So far this volatility has not been “filtered”, and reflects growing “tug-and-pull” between bulls and bears.
• I would look for the the market to find support near 129. First, however, a decline should see support near 131, even if it breaks below what seems to be a triangle ,but may be a declining channel.
• If all this above still leaves you clueless about what direction the market should be in, that is exactly the way you should feel. Therefore, look for more clues. Meanwhile in then near-term, the 4H chart suggests another bearish attempt should take place after today’s consolidation.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

Greenback Tries to Fight Back

The USD was pressured to start the week, and continued further. However, it started to fight back against the JPY, and by Friday, it fought back across the board. The EUR/USD for example was projected to 1.2750 to start the week, and topped at 1.2720. Other USD-crosses look to be topping as well, and a pullback that is starting in the US session and may extend to the start of the next week, may provide clues to whether the market’s have actually topped.

EUR/USD Showing First Signs of Reversal (Link)

USD/JPY: Stalking Possible Bottom

• Daily and 4H: Last week, I cautioned against picking a bottom for the USD/JPY. However, this week saw the market respect the 87 support level. Thursday’s move pushed the pair higher towards 89, a level of expected resistance noted last week.
• If the market tops off where it is now, then we have a negative RSI reversal. In fact as long as the rally does not exceed 90.
• This condition is also expected if the current swing is a C wave. At 89.96, C = 161.8% A. If C extends, it may not be a C wave, and instead of a correction, the current rally could be starting a bullish impulse wave where we are in wave 3. That means a subsequent decline should not go below 88.25 (end of wave 1).
• To be honest, I don’t really have an opinion for USD/JPY inside of 88 and 95. At the 87 level, I had my reasons to avoid picking the bottom, but if the market picks it then that is what it will be. However, I am still not convinced that the bearish attempt in the intermediate term is over.

GBP/USD Respecting 1.52

• Weekly and Daily: The greenback is also fighting back against the GBP/USD pair. In the weekly chart we see the pair testing a declining channel resistance. We also have a negative RSI reversal forming, if today’s decline continues for about another day.
• We see that today’s price action signals a reversal, but the market needs to break below a rising support to truly confirm that this price action is just the beginning.
• A swing projection goes to 1.40. I have been stalking this pair all week at 1.52, and now it is beginning to fall. I want to see a pullback to confirm that indeed bulls lost their momentum. The daily RSI was unable to cleanly break above 60, so the mode may still turn back to bearish.
• To start the week, I wanna see if there can be one more confirmation. The 4H RSI at the moment is testing 40, if it can break below, and if you see 1H RSI go way below 30, you have signs that a strong bearish attempt is developing.

USD/CAD Ranging with Strong Volatility

• Daily and 4H: The USD/CAD is in sideways action, with slight bearish bias, and has been choppy. Characteristics that make uncertainty hard to deal with. However after this week’s slide, it appears a range was formed.
• The resistance is near 1.08 and the support near 1.0150. We can also see support near 0.9950.
• Honestly, I have trouble assessing this pair except for the fact that it has been ranging after declining for a while.

EUR/GBP Euro Trying to Turn the Corner

• Weekly and Daily: The EUR/GBP pair is reversing sharply. The past 2 week’s have seen the pair establish a bottom at 0.8070.
• The weekly shows that the current rally is within the context of a larger decline. The rally came after the pair was unable to break below the 50% retracement level near 0.81. This is also the powerline that acted as resistance in a previous period of consolidation.
• The market still looks overall bearish for the pair, but short-term momentum might bring it towards levels with stronger resistance.
• The daily shows that the rally is about to test a fast declining channel resistance. The 50% retracement level lies just above at 0.8420. So far, the pair has rallied through many topping patterns. The has shown some topping actions, but were not confirmed by pullback.
• If the pair breaks above the channel resistace at 0.8450, further rally towards 0.88 can follow.

AUD/USD Momentum Reflects Ranging Mode

• Daily: The AUD/USD pair has been moving sharply back and forth. After finding resistance at 0.8870 are, it has fallen sharply, but was supported at 0.83. The RSI was also supported at 40, suggesting that the market is in a ranging mode.
• If the market tops off at 0.88, a decline may go to the 0.8250 area for a swing projection.
• Look in 4H and 1H charts to see if topping occurs next week. Here the greenback could not really fight back against the strength in the Aussie. It was only by week’s end that  there were some consolidation.

GBP/JPY – Possible Double Top; If not, Resistance Lies at 135.30

• Daily and 4H: The daily chart shows the GBP/JPY pair in sideways action between 136 and 131. The market is in the middle of this range, so there is not a strong opinion for the pair in either direction.
• However we do see some possible topping in the 4H chart, as the market attempts to complete a double top. A break below 133 suggests a decline towards 130.60, but we have see support at 131.
• Another possibility is that the “double top” is just a flat correction, and a rally can follow to the 135.30/50 area. There is resistance here. This will make a C=150% to 161.8% of A, assuming we are in a type of wave C. This is also near a former top, but we know 136 is the resistance level, 135.30/50 is just a projection of the currently.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

Greenback Showing Weakness, Euro Hanging Tough

There continues to be risk aversion, but the greenback is not benefiting. The greenback started the week gaining, but lost its appeal towards the end of the week. The EUR/USD reflects this volatility. The euro had some surprising strength and with broad USD weakness, the EUR/USD pair is attempting to bottom out.

Also See: Cover-it-Live Fundamental News and Technical Analysis Wrap-up 7-02-2010

EUR/USD Testing Important Resistance (Link)

USD/JPY: Caution Against Bottom Picking

• Daily and 4H: The USD/JPY pair has had a very persistent decline. It has extended past the 88 support. Although this is the range support area, the daily chart RSI suggests caution against trying to pick a bottom, especially when the decline has accelerated, as seen in the 4H chart.
• There are still negative reversals in the 4H chart, where the RSI makes a higher high after bottoming, but the price level does not. This reflects the continuing pressure on the USD, as well as the strength in the JPY.
• The market may continue lower towareds the 85 area, near the 2009 low.
• There will be some convincing bottoming action here to consider any bullish outlook, and the bullish outlooks have very limited target.
• 89 for example is a level of expected resistance, and therefore limits the bullish projection.
• The low also is limited by the 85  area, as it was a significant low in 2009. I have no opinion for this pair at the moment, as it tests this large support zone between 88 and 85.

GBP/USD Testing Channel Resistance

• Daily: The daily chart shows a GBP/USD continuing to surge upwards. After Tuesday and Wednesday’s the pair has sprung towards the 1.52 area.
• This is the 78.6% retracement level, channel resistance, and makes his current rally 161.8% of the first rally in May.
• There may be some resistance here. A break below a rising support would suggest a bearish continuation. A break above 1.5240 is a sign that this may be the start of a rally, and this may not be a correction rally, but instead the start of an impulse wave upwards.

USD/CAD Choppy and Bearish

• Daily and 4H: The USD/CAD pair rallied this week. In the daily, we see that this rally came after testing 1.02 level.
• The RSI also suggests that the market may be turning bullish, if it can cross above 60 without breaking below 40.
• The 4H chart shows the pair reach a declining channel resistance, where the market is developing a possible double top.
• It is probably best to see if a subsequent rally is weak. If weak, it is a pullback and is a  bearish confirmation. In the near-term a downswing aims at 1.0250.
• Otherwise, it will threaten to break above channel resistance and the high of the consolidation near 1.0470.

EUR/GBP Euro Strength Tested at End of Week

• Daily: The EUR/GBP pair has been very week, but the Euro got a spark on Wednesday. The market is seen in the daily to be reversing, but the momentum is not right. If we see topping action to start next week around 0.83, there is a negative reversal, suggesting another decline.
• Therefore, I will be stalking this correction rally until it shows me topping, if it is below 0.84.

• 4H and 1H: Since I am sensing some possible topping at 0.83. Looking at the 4H chart, we see no evidence of such, as the market rallies above 61.8% retracement, and the RSI breaks above 60.
• The 1H chart shows some signs that 0.83 may hold as resistance. The market has then declined and is testing the 0.8250 level. This is a good test of both resistance and support, and should give us some clues to start next week. If the market breaks below 0.8250 and the the rising channel support, a reversal is in play.
• However note the RSI behavior and price behavior. There was a positive reversal during the consolidation between 0.82 and 0.8250. The suggested target is just above 0.83, which the market missed.
• To me, this price action already did what the postive revesrsal suggested – push for another high instead of toppin. If such a signal appear again, I will be cautious about the topping at 0.83 outlook.

AUD/USD Avoids NFP Volatility; Stalking Correction (Link)

GBP/JPY – Pullback After Double Top…(Link)

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

Yen Outperforms Greenback

This week, the greenback started with a bang. However after the FOMC announcement, which puts a lid on interest hike prospects, dimmed the USD gains. By Friday, the USD has lost most of the gains from earlier in the week. The yen held its gains better. Commodity currencies such as CAD and AUD also started the week strong, but reversed these gains into losses by Friday. Let’s take a look.

Also See: Cover-it-Live Fundamental News and Technical Analysis Wrap-up 6-25-2010

EUR/USD Unconfirmed Bearish Engulfing

• Daily and 1H: The daily chart shows this week’s move dominated by the first day, which created an engulfing pattern. However, the rest of the week has laboriously pared some of the initial loses in the EUR/USD.
• The projection to 1.17 is still valid, with two negative reversals with the RSI in the Daily chart suggesting this target. (This is when the RSI makes a higher high from bottoming, but price action does not).
• Basically there was no bearish confirmation after the signal offered at the start of the week
• Looking at the 1H chart, we see the latest twist and turns develop a downswing and then a gartley retracement pattern yesterday. This suggests a swing towards 1.2150 sometime in the beginning of the next week.
• We can see in the daily, that the 1.2150 area is an importan powerline, and may be tested as support when the decline reaches it.

USD/JPY Continues Slide Towards 88.30

• Daily: Since last Friday, the USD/JPY pair dcelined as expected, but not after starting the week with a bullish engulfing pattern. This false signal was followed by 4 days of strong decline. We see that the pair is nearing a support zone, with an ultimate target to 88.30 suggested by the negative reversal.

• The 4H chart shows oversold conditions. The price action however is very bearish, and we may break below the current low.
• The 1H chart shows a negativer reversal as the market attempts to bottom. This suggests we may continue lower even in the near-term toward 89, the beginning of the support zone.

GBP/USD Refuses to Top off

• Daily: The above chart with the projections is a premature one, but is suggested by negative reversals. The 1.42 and 1.37 are projection targets. However we see that the momentum is still bullish, and if the RSI breaks above 60, these bearish projections must be reconsidered.

• 4Hand  1H: The intraday charts show some early signs of possible topping. The 4H chart does not show it, but the 1H chart shows a possible  double top.
• As I am writing about this, the market has already pulled back almost 100% to the previous top.
• This may be a development of a double top in the 4H chart.
• In anycase, it is going to be important to see the topping action develop some kind of candlestick reversal in the daily. So far every attempt has failed this past week.
• Look to see if the market can top off near 1.5030 to start next week.
• Early signals should not be processed until we have some confirmation. Today for example, we saw a possible double top, and if we did not wait for confirmation in a weak pullback, the strong pullback would have caused pain.
• A bearish outlook next week should not aim below 1.4850. A break below this is the first true signal of topping.

USD/CAD Choppy and Bearish

• Daily and 4H: The USD/CAD pair rallied this week. In the daily, we see that this rally came after testing 1.02 level.
• The RSI also suggests that the market may be turning bullish, if it can cross above 60 without breaking below 40.
• The 4H chart shows the pair reach a declining channel resistance, where the market is developing a possible double top.
• It is probably best to see if a subsequent rally is weak. If weak, it is a pullback and is a  bearish confirmation. In the near-term a downswing aims at 1.0250.
• Otherwise, it will threaten to break above channel resistance and the high of the consolidation near 1.0470.

EUR/GBP in Diagonal Triangle

• Weekly: The weekly suggests we should be in a C wave, and possible the wave 3 of a C wave. We see this week’s action spell bearish continuation. The 0.80 may offer psychological support, but the 0.7740 level is the 61.8% retracement and is a valid projection. We may find support a little higher in the central area of the consolidation seen in second half of 2009.
• The RSI also suggests we are in some kind of wave 3. Perhaps a closer look offers better clues to the structure.

• Daily and 4H: The daily chart shows the pair testing the previous low. The wave count also suggests we may be in a wave 3 of a wave 3 kind of scenario. Please forgive and overlook any unconventional labeling. I am only labeling for purpose of identifying structure.
• The 4H chart shows our scenario from last Friday develop almost exactly as expected. The market is now testing the 0.82/0.8250 low. Some short-term bullish attempt can be expected, but the bias is that it may break and continue.
• The ability of the RSI to reach oversold levels confirms the bearish outlook. I might look for another upswing towards 0.83, before considering the bearish scenario.

AUD/USD Has (c) Finished?

• 4H and 1H: I have been stalking the AUD/USD rally, as a (c) wave. After this wave ends, I am looking for a bearish continuation, seen more clearly in the daily, which is not shown here.
• The 4H chart RSI is at 40. A break below makes it more likely that (c) wave is done with. However, if the market rallies, we may not be done, and a swing towards 0.8880/0.89 is possible.
• There is a channel seen in the 1H chart. The market is rallying towards the channel resistnace at the moment. This is also now testing 61.8% retracement of the previous downswing.
• If the RSI in the 1H chart also stays below 60, and the market tops off before breaking out of the channel, look for bearish action next week.
• The 0.8550 level is the first target. It is the resistance during the previous consolidation period that was in second half of May, a the start of June.

GBP/JPY:  Continues to Twist and Turn

• 4H: GBP/JPY contineus to twist and turn but is in sideways action this week. Pretty much continuing its mode frmo last week.
• Therefore, not much to add. When market breaks below 133.30, or breaks above 136, something more significant will probably develop.
• I have bearish bias on this pair as that is the mode when seen in the daily and weekly charts.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

A Test of Risk Appetite

After the market put on some risk last week, it spent this week fiddling. USD and JPY crosses as well as commodity related and growth related currencies were all tested this week. The Euro led this week in gains against the greenback. The Japanese yen held its ground after 2 weeks of decline. Timing is becoming ripe for a continuation of risk aversion. The question is whether this week’s actions indicate reversal, or if there is yet another risk supported attempt.

Also See: Cover-it-Live Fundamental News and Technical Analysis Wrap-up 6-18-2010

EUR/USD Correction Rally At Resistance Zone

• Daily and 4H: This week, the market did not respect continued putting back on risk, pushing the Euro higher against the dollar and other currencies. As I mentioned earlier this week, the rally could reach 1.24, and it has.
• The daily chart shows a significant negative reversal, unless the market finds more momentum to push through 1.26. The swing projection targets the 1.17 area.
• The 4H chart shows that the rally is still intact, with a rising support.
• The RSI is bullish but is flattening. Price action on Friday provided a strong bearish candle, but again, this is not much of a clue. Breaking below the rising trendline should be a major clue to bearish continuation.

USD/JPY Slides as Suggested by Negative Reversal

• Weekly and Daily: I have had the projection seen in the daily chart on the USD/JPY for a couple of weeks now, since the market rallied to test the 50-period moving average to start  June,  but failed to break it.
• A negative reversal also formed, and this week the decline continued. This is a second leg.
• Choppiness of this pair suggests caution of this projection. A near-term projection is shown in the daily chart going to 90. This would complete a gartley retracement, suggesting continuation of the bullish attempt that started at 89 in mid-May.
• There should be some support here for a rally. It is difficult at this point to assess whether a rally from there should be temporary or a significant rally towards 95.
• My opinion is the latter because of the choppiness of the market. However this opinion would go against the bearish mode in the higher weekly time-frame.

GBP/USD Stalking Consolidation

• 4H and Daily: The GBP is also gaining against the USD in what appears to be a second leg to a correction rally. The full equality projection at 1.49 has not been reached, but is very close at 1.4880.
• The market is testing a confluence of 50% and 78.6% retracement, 50-simple moving average in the daily chart, and the 1.48 powerline.
• A decline from here has a swing projection of 1.4060, perhaps 1.41.
• The 4H chart shows the market in a diagonal triangle, indicative of terminal waves. This is suggesting that next week, we may see a reversal, which means a bearish continuation.

USD/CAD Choppy and Bearish

• Daily and 4H: Last week, I mentioned that the USD/CAD was choppy and bearish. This week’s price action was exactly that. In the daily, we saw a strong bearish day, but when we look at the detail in the 4H chart, we see a decline in a channel.
• The 4H chart also shows bullish divergence. Accompanied with negative reversal, this is suggesting some further bearish attempts.
• In other words, looking back at the daily, the current low may not last. A bullish projection from the current low is to 1.0925. A rally from lower, near 1.0150, would aim near 1.0860.
• The bearish outlook would say that the counter-trend support has been broken in the daily chart, and suggests a re-test of the previous low near parity. This however happened after a rally broke a previous high at 1.08 area. This showing a bullish attempt suggest we may have found a bottom for ranging action if not reversal. Therefore, the counter-trend breakout outlook may not be appropriate.

EUR/GBP in Diagonal Triangle

• 4H: As mentioned last week, the EUR/GBP was due for a correction. This week, the market indeed developed twists and turns, but overall in a diagonal triangle.
• If this week’s price action is a wave (c), it may near its target. 0.8396 makes it 150% of (a), and 0.8412 makes it 161.8% expansion of (a).
• Also note 38.2% retracement at 0.8427.
• The RSI is showing bearish divergence, and no positive reversal. Look for the market next week to cap off the current rally and continue a wave 3 decline.

AUD/USD Finishing Up Wave (c) (Link)

GBP/JPY:  Continues to Twist and Turn

• 4H: Continuing the “twist and turn” theme from last week, the GBP/JPY pair continued to be choppy. It has been in a general uptrend in June, but that is coming after strong declines that came in May.
• This week kept the same volatility but was sideways. A positive RSI reversal suggests there may be another push.
• However, this short-term outlook is a prelude to the intermediate term bearish mode. Look for some more near-term bearish attempt, but the short-term bullish attempt to continue. In the intermediate term (2-3 weeks), it may reverse.
• If the market breaks the rising trendline, it may not take 2-3 weeks, and a reversal/bearish continuation may be starting. So far this week, price action is not telling us much, except that risk appetite is being tested.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

Markets Put Back Some Risk

The risk sentiments in the global markets stabilized this week after sliding last week. We saw the Japanese Yen and the Greenback lose some of its flight to safety appeal. Friday saw some of this fizzle but both currencies were still pressured within this week’s context. The GBP however was hit on Friday, as it posted poor manufacturing data. Let’s take a look at what we can expect next week.

EUR/USD Still Pointing South to 1.17

• Daily and 4H: The continued slid last Friday below the 1.2150 support. This week, the EUR/USD pair crawled back up to retest the 1.2150 level.
• The 4H time-frame shows new negative reversals forming, suggesting this market is still very bearish and that the 1.17 projection is still valid.
• The daily chart shows we may be in a third wave, so a sharp decline may be coming next week.
• However, I am not so convinced the internals of this week’s rally correction is over. So monitor the rising support in the 4H and 1H charts. If that breaks, then it is more likely the market is ready to head lower to 1.17.

USD/JPY Similar Dynamics to Risk Sentiment Keeps Pair Ranging

• Daily and 4H: Both the USD and JPY are currently affected by risk sentiments in similar ways. In the daily time-frame, we can see that the pair has been ranging between 95 and 88 in the intermediate term.
• The 4H chart shows that the market is a narrow range between 91 and 92.
• The daily RSI shows some short term bullish momentum but it is developing a negative reversal since the rally attempt has been weak compared to the decline that brought the pair from 95 to 89.
• Therefore even though the pair is in ranging mode in the intermediate term, it is bearish in the short-term, but slightly bullish in the near-term.
• The bearish outlook has a target of 88.30, seen in the daily, as suggested by a negative revesral.

GBP/USD Stalking Consolidation

• 4H and Daily: The USD was also week against the GBP for most part of the week. The market rallied within a rising channel, but when it hit the channel resistance along with the 200 period simple moving average in the 4H chart, it declined sharply. This move was accompanied by poor UK manufacturing data.
• The daily shows the projection towards 1.3925. But the 1.40 may provide some psychological support as well.

USD/CAD Choppy and Bearish

• Weekly and Daily: The USD/CAD is continuing its decline, right after ending last week with bullish attempt. The market is now testing 1.03, 61.8% retracement. The weekly shows a negative reversal suggesting another test of parity, and possibly lower to 0.97.
• The daily however, is showing a possible bullish reversal.
• The pair is very choppy as can be seen by the different signals in different time-frames. The market is however bearish. But signals will likely lag significantly because the market is also very choppy. Stalking this pair by paying attention to candlestick action can be very difficult.
• In anycase, the most likely scenario is that the market will continue lower next week, to test 1.02.

EUR/GBP Due for a Correction

• Daily and 4H: The EUR/GBP pair may be looking at a bit of a correction next week. The market’s decline seen in the daily chart is throwing over below the channel support. This is a sign that it is a third wave in that time-frame.
• This is 50% retracement of a larger rally not shown, but to the left of the daily chart.
• The 4H chart shows that we may be in an (a)-(b)-(c) correction, and is developing a (c) wave.
• In the 4H chart, if the RSI breaks above 60 (which it is testing), then it can be confirmed that we are indeed in this correction, but may already be towards the end of it.
• Now, there is also a possibility this correction may end up being a longer consolidation.
• In the daily, wave 2 was a zig zag type correction. Therefore, I would anticipate form, although this is not a rule but a guide.
• So there is a possibility that wave (c) could stop below 0.8350, as this would be a flat correction. It is also possible we will be looking at a longer correction in terms of time to complete.
• If the market continues to rally, there should be some resistance at 0.8450. In any case, we are in wave (c), so anticipate some correction rally next week towards 0.8450 if 0.8340 does not hold.

AUD/USD in Wave (c)

• Daily and 4H: As we see in the daily chart, we are still in correction, and probably in wave (c). A flat correction means (c) should top off very soon. There is a negative reversal forming suggesting a retest of the current low at 0.8070.
• The 4H chart shows the internal to this week’s rally. I am looking for wave 4, so I can anticipate wave 5, and topping action. wave 4, should be different from the previous declines within the channel, all being short 1-wavers.
• However, if the market continues to throw-over the channel resistance, we are still in wave 3, and a push towards 0.87 – 50% retracement seen in daily chart- is probably next. Also wave (c) can be something like 150% of (a) also suggesting a projection near this level, maybe slightly higher like 0.8750.

GBP/JPY:  Twisting and Turning

• Daily and 4H: Stalking the GBP/JPY can be like riding a wild stallion. This week’s sharp rally, and equally sharp decline to end reflects this comparison. The daily chart shows that momentum is bearish, and a negative reversal projection targets 123 area.
• Today’s decline improves the chance of that in the intermediate term. However in the short intermediate term we can see 131 and 128 as support. In the near-term, the decline is supported just below 133. A wave following that may go to 131.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

EUR/USD Leads in Completing Consolidation

The market has been consolidating for the last couple of weeks. As the market consolidates, imbalances build up like potential energy, and when confirmations start working like a feedback mechanism, the market accelerates to another level where the bullish and bearish forces are balanced. In this context, pairs such as EUR/USD are ready to find another pivot. Commodity currencies are still consolidating. Japanese yen crosses sensitive to risk sentiment are also still within consolidation. So it appears that the EUR/USD pair is taking the lead in continuing the trend before the last 2 weeks. If other pairs fail to follow, and instead reverses, the outlook for EUR/USD or the scale of its decline may need to be adjusted.

EUR/USD Supported at 1.2150

• Daily and 4H: The EUR/USD finally broke below the 121.50 and 121 support with force. No need to repeat details, the target is 1.17.
• The 4H chart shows the market pushing lower in a declining channel. Some pullback should help confirm. Anticipate some support near the 119.0 area.

USD/JPY Tops Off Below 93 (Link)

GBP/USD Stalking Consolidation

• Daily and 4H: We were stalking the correction rally last week. Looking at the 4H chart, a channel break out projection to 1.47 was reached and the market topped before reaching 1.48. After a double top, the market is starting to declining.
• The current decline should see some support at 1.4450, the 61.8% retracement level.
• Another support after that is the 1.42 area.
• The daily chart shows good reversal candlestick combination after hitting 38.2% retracement of the decline from 1.55. This is coincident with the 61.8% retracement of the smaller swing seen in the 4H chart from 1.5050.
• The daily chart also shows a negative reversal, which suggests the swing projection to 1.40.
• Don’t rule out the continuing rally correction scenario, which should be considered if the market can rally back above 1.4650. This should target 1.48.

USD/CAD Continuing Rally Scenario to 1.10

• Daily and 4H: The USD/CAD looked like it was topping last week, and some support levels were established to follow the decline, which materialized. This decline came to the 1.40 area as anticipated, although that was only the conservative target.
• Looking at the 4H chart, we saw that the market broke below 1.55 and stayed consolidating for first half of the week, until it broke below with a strong move on Wednesday.
• The market has then rallied (not just a  pullback), so the bearish scenario from yesterday’s video post is now invalid. A break above 60 in the RSI and a break above 1.55 in price should further negate any bearish outlook and improve probability of a bullish scenario.
• The bullish scenario can be seen in the daily chart and targets 1.10. This is suggested by a positive reversal with the RSI.
• For now the target in the short-term should be 1.0850 if the market breaks above 1.55.

EUR/GBP Negative Reversal Target Hit

• Daily and 4H: Let’s stalk by a look at the daily. Last week, the EUR/GBP was projected to 0.8350 as suggested by a negative RSI reversal, but the 0.8430 held. A break below this was anticipated as a signal to 0.8350.
• This week, the market came to the 0.8350 level and in the 4H chart, you can see a minor consolidation, with the market attempting to break below it today with a strong bearish candle in the early US session.
• A stretch of the current decline should see some support at 0.82.

AUD/USD To Retest Support near 0.81

• Daily and 4H: The AUD/USD has been consolidating. It failed to rally above the consolidation high at 0.8550 seen in the 4H chart.
• The market is currently testing 0.8250, 61.8% retracement. A break below should provide a vacuum until 0.81, a very important support. If broken, the market can extend lower to 0.78.
• There might be a minor rally to start next week from the current support level. Watch this bounce. If indeed it is minor, the bearish scenario is more likely. But if the market rallies above 0.8450, the market is NOT ready to continue lower yet.

GBP/JPY:  Still Resolving Correction

• Daily and 4H: The GBP/JPY came to the 136.50 level and topped off. The daily chart shows a strong reversal candlestick combination after hitting 50% of the latest downswing.
• The RSI sets up a negative reversal, suggesting a swing to 123.
• The 4H chart shows the market diving after breaking below 134.50 area.
• Support exists near 131, then 127 area. In following the bearish scenario, these are areas of interest for considering reduction in position size or deploy exit-re-entry tactics.

Fan Yang
Currency Analyst
Commodity Trading Advisor
fyang@fxtimes.com

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 analyses.

The EUR/USD had a dramatic Tuesday session as the U.S. markets began the shortened week by selling off the U.S. Dollar from the daily chart highs along the range from 87.50 to 87.60. This, in turn, allowed the battered Euro to rally against the greenback. Identifying the intraday exhaustion high in the EUR/USD pair is the key to finding where the daily chart’s downtrend may resume. Currently, the series of lower highs on the EUR/USD points to lower prices ahead as the bears continue to sell into short-term bounces and intraday rallies. There continues to be significant support amidst all the bearish sentiment, and the near-term low (support) is now at 1.2111.

The Three Point Extension Fibonacci pattern on the EUR/USD’s 60-minute chart has outlined a very accurate picture of the current support and resistance levels that affect this pair. This Fibonacci pattern relies on three points, the first of which is the sell-off – in this case from B to C – to project the high (D) that will act as a turning point in the market. The D point is most often a 1.272 or 1.681 Extension level of the move from B to C. Once point D is reached, a high has been set in the market – as long as prices exhaust at that level, confirming a shift in sentiment. (In this case, the shift was from bullish to bearish.) The Fibonacci support levels plotted below are calculated from the move from C to D; these levels are based on a certain percentage of the C-to-D move being “retraced,” and are therefore called Fibonacci Retracements.

Notice that the 1.000, or “full,” retracement did support prices. The 1.000 is the level from which the move originated, and in fact is the low at point C, or 1.2153. The EUR/USD is currently trading within the area between the 0.618 at 1.2267, and the 0.500 at 1.2303. If the downtrend is to resume, the Fibonacci Retracement levels below current price action will have to be broken – most especially the C low at the 1.2100 level.

For further information on this and other Autochartist products visit www.autochartist.com

Disclaimer: Autochartist, MDIO Software, agents and resellers of Autochartist services do not guarantee the completeness, accuracy or timeliness of the information supplied. Users of this service should take independent decisions regarding any securities or financial instruments mentioned herein. Trading involves considerable risk: therefore, before trading you need carefully reflect on your risk appetite, investment objectives and level of experience. Do not invest money you cannot afford to lose. Past performance of strategies is not indicative of future performance.

Information and opinions contained contained in this video are for educational purposes only and do not constitute trading recommendations.

Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any.