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THE TECHNIQUE OF GIVING A GOOD MASSAGE
14 years ago
Monday, October 18, 2010
, Posted by Usman Ali Minhas at 7:48 AM
Chart Levels:
Support 81.00..80.88..80.00..79.75.
Resistance 81.65..82.20..83.00..84.00.
The Japanese authorities may protest but can expect little sympathy let alone help at this week’sG20 meeting hosted by South Korea. Generalised US dollar weakness has taken the yen almost to its record low of 79.75 of 1995, a multi-year low at 80.88. Other major currencies are doing something similar, Cable and the Euro among the weaker ones. The greenback is very oversold yet all elements of this weekly Ichimoku chart continue to suggest a short position. On balance volume may be at a record but futures open interest remains subdued. Proceed with caution.
Chart Levels:
Support 1.3775..1.3700..1.3635..1.3550.
Resistance 1.4030..1.4161..1.4200..1.4340.
Last week’s ‘spike high’ and ‘doji’ candle at the top of a narrow weekly Ichimoku ‘cloud’ suggests we will consolidate under 1.4161 this week and maybe until month-end. The overbought situation has already been corrected but bullish momentum has halved. First Fibonacci 38% retracement support lies close to a horizontal, widening weekly ‘cloud’ in December which will hopefully provide support for another rally at year-end. Note that in Q2 2010 the Euro saw one of its biggest quarterly rallies ever, both against the US dollar and as measured by the ECB’s Effective Exchange Rate.
Chart Levels:
Support 112.00..111.00..110.50..109.30.
Resistance 113.75..114.00..114.75..115.75
Retreating from the upper edge of the range since May, as expected, but keep in mind that the formation could actually be a potential ‘broadening bottom’. We continue to favour a pullback into the middle of the range and the 26-week moving average at 110.50. Other yen crosses also retreated last week, though few have chart levels as clear as this pair. Momentum has switched from very bullish to marginally bearish, the RSI tumbling dramatically. Until year-end a case can be made for a series of random moves roughly between 105.00 and 115.00.
Chart Levels:
Support 127.60..126.70..125.25..120.00.
Resistance 131.35..133.05..134.55..135.05.
Though still holding above this year’s low at 126.70 set in May, which lies ahead of 2009’s record low at 118.80, this pair is trading well over two standard deviations below the mean of the last twenty years. Price action looks ‘heavy’ so we continue to favour another small notch lower some time this quarter. Momentum remains bearish, as it has been all this year, and sterling is not especially oversold against the yen. One-month at-the-money should hold around the 14.00%, where it has spent most of 2010. A daily close below 120.00 would set up for a rush to re-test the record low.
Chart Levels:
Support 1.5750..1.5650..1.5500..1.5300.
Resistance 1.6000..1.6110..1.6275..1.6335.
Cable continues to struggle with Fibonacci 61% retracement resistance while hovering above a large weekly Ichimoku ‘cloud’. Hopefully the rising 9-week moving average will add some much-needed bullish momentum. Until then conceivably it could drop all the way back down to 1.5350 prior to a rally to pivotal very long term resistance clustered between the 1.6800 and 1.7000 levels next year. Consensus opinion has it holding at current levels for the next twelve months, unlikely against a backdrop of generalised US dollar weakness, but a possibility. (It held 1.5700 to 1.6700 May-Dec09).
Chart Levels:
Support 0.8695..0.8625..0.8425..0.8200.
Resistance 0.8805..0.8850..0.8910..0.9055.
Last week’s irregular ‘doji’ above 61% Fibonacci retracement resistance of the decline from March’s peak at 0.9150, just under a descending weekly Ichimoku ‘cloud’, adds fractionally to our view. We expect another new interim high to form, maintaining the succession of lower highs starting with January 2009’s peak, for a drop back down to what is in our opinion the pivotal 0.8400 area. Note how the lower edge of the weekly ‘cloud’ drops from 0.8800 to 0.8400 starting in November. Only when this pair starts holding clearly below 0.8400 can we be more confident that another bout of serious and sudden sterling weakness has been avoided.
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