EUR/USD is seeing some corrective activity from 1.3159
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THE TECHNIQUE OF GIVING A GOOD MASSAGE
14 years ago
Tuesday, September 21, 2010
, Posted by Usman Ali Minhas at 4:33 AM
Strategy: Buy Limit 3 at 84.71, Objs: 85.97/87.86/89.75, Stop: 83.45
USD/JPY is seeing the typical reaction lower from 85.94 as last week’s powerful bullish outside pattern is retraced. While further side to down action may ensue over the next week or two the velocity of the rebound from 82.88 suggests that a bear trap has formed below the November swing low of 84.84, raising the prospects of seeing a stronger advance over coming weeks. I look for 83.89/84.90 to hold prior to seeing an attack on broken head and shoulders neckline support at 88.14 and possibly psychological 90.00. In the meantime, loss of 83.89 would suggest that bears have regained control, signalling a resumption of the major downtrend through 82.88 for the all time low at 79.75 (posted in 1995) over subsequent weeks.
Strategy: Buy Stop 3 at 1.5590, Objs: 1.5730/1.5993/1.6255, Stop: 1.5490
Cable is seeing a pullback from 1.5729 as last week’s powerful bullish First Thrust pattern is retraced. The velocity of last week’s rebound suggests that 1.5297 marked completion of the correction of the advance from the 1.4230 May swing low and while support at 1.5439/1.5582 holds I look for an attack on the 1.5997 recent swing high, the breach of which could see follow-through buying for the 1.6458 reaction high ahead of key resistance at 1.6878/1.7043 (August/November 2009 highs) as the top of a large range is probed. In the meantime, loss of 1.5439 would suggest that the 1.5297 rally is corrective, increasing risk of eventual breakdown through 1.5297 for 1.4948/1.5000 (outside week support/psychological) then the bear trap level at 1.4781 initially.
Strategy: Buy Limit 3 at 1.2953, Objs: 1.3161/1.3473/1.3785, Stop: 1.2745
EUR/USD is seeing some corrective activity from 1.3159 as last week’s powerful First Thrust pattern is retraced. The velocity of last week’s advance suggests that 1.2588 marked completion of the correction of the 1.1876/1.3334 bull swing increasing the odds of seeing 1.3334, breach of which could then see follow-through gains for the 1.3692/1.4000 region as the 1.1876 advance extends over subsequent weeks. I look for support at 1.2815/1.2983 to hold for moves higher, with loss there to suggest that the 1.2588 move is corrective putting pressure back on 1.2588 then outside week support at 1.2151 ahead of the 1.1876 May swing low in a resumption of the 1.5144 bear run.
Strategy: Stand Aside
Exited Long position at cost. USD/CHF has rebounded sharply from 0.9932 to form a potentially bullish lower shadow on the weekly candles signalling bear failure at key support coming in from the November 2009 swing low at 0.9919. While we could see some lateral price action over the short-term as the CHF starts to underperform across the board following the recent bout of outperformance, I would expect the 1.0331/1.0626 congestion zone to contain upside probes prior to topping for fresh weakness through 0.9919/0.9932 towards the March 2008 all-time low at 0.9648. Settlement below 1.0060 from here would suggest that we will see the breakdown sooner rather than later.
Strategy: Look to sell
The recovery from last week’s 1.0215 low is not seeing much in the way of thrust warning of an absence of buying pressure. With the decline from 1.0673 appearing to signal completion of a bearish continuation pattern the risk appears to be for an attack on the 1.0107 recent swing low, loss of which would suggest that the 1.0853 May swing high marked completion of a bear market rally risking breakdown through the 0.9930 April swing low in a resumption of the major downtrend from 1.3063. I would need to see the re-capture of weekly opening gap resistance at 1.0368 from here to suggest further upside within the range, although 1.0517 is key to a bullish turn, switching the focus back to 1.0673/1.0853 as a potential base pattern forms.
Strategy: Look to buy
AUD/USD has aborted a potential topping attempt to clear major resistance coming in from the November and April swing highs at 0.9388/0.9406. The move forced a change of medium-term outlook suggesting that the 0.8067 advance can extend towards the July 2008 major swing high at 0.9850 in due course as the larger advance from the October 2008 low at 0.6008 looks to extend. I would expect support at 0.9093/0.9247 to hold for moves higher, with loss there to offer early warning that a bull trap may have formed increasing the risk of seeing a return to 0.8770 then 0.8067/0.8316 as medium-term bears gain control.
Strategy: Buy Limit 3 at 132.08, Objs: 135.11/139.65/144.20, Stop: 129.05
GBP/JPY is seeing some corrective downside activity as last week’s potentially bullish outside week pattern is retraced. The pattern confirmed a solid reaction low above the 126.72 May swing low at 127.63 keeping immediate pressure on the upside and while support at 130.07/132.52 holds I see scope for an attack on key resistance at 137.77, the breach of which would confirm a double bottom pattern calling for a period of multi-month gains towards the April reaction high at 145.96 initially. Failing that, loss of 130.07 from here would risk breakdown through 126.72/127.63 for psychological 120.00 initially as the 163.09 downtrend resumes.
Strategy: Buy Limit 3 at 110.10, Objs: 113.00/117.35/121.70, Stop: 107.20
EUR/JPY is seeing some sideways activity as last week’s powerful First Thrust pattern is retraced. The rebound confirmed a solid swing low at 105.42 trapping bears below the July swing low at 107.31 raising the prospects of seeing a stronger advance towards the last reaction high at 114.73, clearance of which would confirm a large double-bottom pattern calling for a period of multi-month gains towards broken support at 119.65 initially. In the meantime, loss of support at 108.17 would suggest that the rebound has run its course, exposing 105.42 then 99.89/100.00 (June 2001 low/psychological) over subsequent weeks as the major downtrend resumes.
Strategy: Stand Aside
EUR/GBP continues to see further gains from 0.8142 as the cross probes the upper end of the recent trading range. Further out the outlook remains negative as the rebound from the 0.8067 July swing low is seen as a correction within the major downtrend and I would expect failure below the 0.8531 recovery high to set the stage for the eventual loss of support at 0.8067/0.8142, penetration of which should then see breakdown towards 0.7693 over subsequent weeks as the major downtrend extends. I would need to see the breach of key resistance at 0.8531 to confirm a major base pattern calling for a stronger advance towards 0.8773 then psychological 0.9000 as medium-term bulls gain control.
Strategy: Buy Limit 3 at 1.3140, Objs: 1.3395/1.3778/1.4160, Stop: 1.2885
EUR/CHF is seeing a pullback from 1.3390 as last week’s potentially bullish First Thrust advance is retraced. The rebound from the 1.2765 recent swing low trapped sellers of the break below the previous swing low at 1.3073 raising the prospects of seeing further short covering going forward, and I look for support at 1.2971/1.3178 to contain dips prior to seeing a return towards 1.3390 then the last reaction high within the 2007/2010 bear market at 1.3924 and possibly broken support at 1.4300 before renewed selling pressure can emerge. In the meantime, loss of support at 1.2971 would suggest that bears have regained control, risking breakdown towards 1.2500 next.
Strategy: Look to buy
Gold is starting to see an acceleration of recent gains after a brief pause, the June major swing high at 1265.30 now cleared. This move sets the stage for an extension of the 1157.03 advance overcoming weeks, with scope seen for an attack on the 1300.00/1373.50 area (psychological/projection target) as the major bull-run extends. I would need to see the settlement back under 1265.30 to consider the prospects that a bull trap may have formed, with focus then to turn to outside week support at 1210.30 and possibly 1157.03 as medium-term bears gain control.
Strategy: Look to buy
Silver is seeing an acceleration of gains after last week’s brief pause around psychological 20.00 as follow-through gains are seen after clearance of the May swing high at 19.826. With the bias firmly to the upside I look for old resistance at 19.465 to hold for an attack on the March 2008 major swing high at 21.335, the breach of which should then see a run up to a measured move target at 24.265 over subsequent weeks. In the meantime, settlement back under 19.465 would suggest that a bull trap could have formed raising the spectre of seeing a return to 17.198/17.337 supports initially as medium-term bears gain control
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