Thứ Hai, 5 tháng 7, 2010

Forex Trader's Weekly Update (July 05 2010 to July 09 2010) - By Daneil S


EUR/USD  

EUR/USD's rebound from 1.1875 resumed late week and surged to as high as 1.2610, breaking 38.2% retracement of 1.3691 to 1.1875 at 1.2569. Initial bias remains mildly on the upside this week and further rise could still be seen. Nevertheless, note that such rise from 1.1875 is treated as a correction in medium term down trend from 1.5143 only. Hence, we'd expect strong resistance between 1.2671 resistance and medium term falling trendline (now at 1.2826) to limit upside and bring fall resumption. Below 1.2434 minor resistance will flip intraday bias back to the downside for 1.2149 support first.
In the bigger picture, fall from 1.5143 is part of the whole down trend from 2008 high of 1.6039. Nevertheless, sustained trading above the trend line will be the first alert that EUR/USD has bottomed earlier than we thought and will turn focus to 1.3266/3691 resistance zone.

In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend. However, note that sustained break of 1.1209 key fibonacci level will dampen this view and open up the case of a take on parity.

Pips Mover's Weekly Pivot Point for this week: 1.2464
Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600


GBP/USD   

GBP/USD rose further to as high as 1.5228 last week, just inch below 38.2% retracement of 1.6875 to 1.4230 at 1.5240. Initial bias remains on the upside this week and further rise could still be seen. However, whole recovery from 1.4230 resistance is treated as a correction in the larger decline from 1.6875 only. Hence, we'd expect strong resistance between 1.5240 fibo level and channel resistance at 1.5306 and bring reversal. Break of 1.4873 will argue that rebound from 1.4230 is completed and will flip bias back to the downside for retesting this low.

In the bigger picture, our bearish view remains unchanged. Fall from 1.7043 is tentatively treated as resumption of the whole down trend from 2007 high of 2.1161. Such fall should target 61.8% projection of 2.1161 to 1.3503 from 1.7043 at 1.2310 after taking out 1.3503 low. However, decisive break 1.5521 resistance will argue that whole fall from 1.7043 is finished. This will also suggest that medium term rise from 1.3503 is not finished yet and another high above 1.7043 might be seen before long term down trend from 2.1161 resumes.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Rebound from 1.3503 should have completed and the whole fall from 2.1161 is likely resuming for 61.8% projection of 2.1161 to 1.3503 from 1.7043 at 1.2310 next.

Pips Mover's Weekly Pivot Point for this week: 1.5118
Historical Levels up to date: 1.9445, 1.8490, 1.7520, 1.6570, 1.6255, 1.5675


USD/CHF  

USD/CHF dropped further to as low as 1.0577 last week but drew support from 61.8% retracement of 0.9916 to 1.1729 at 1.0609 and turned sideway. A temporary low should be in place and initial bias is neutral this week. Some recovery might be seen but another fall will remain in favor as long as 1.1009 resistance holds. Sustained trading below 1.0609 fibonacci level will target 1.0434 support next. Though, break of 1.1009 will indicate that fall from 1.1729 is possibly over and will turn bias back to the upside for stronger rebound.

In the bigger picture, the close below medium term trend line support argues that rise from 0.9916 is finished but 61.8% retracement of 0.9916 to 1.1729 at 1.0609 is still intact. We'll turn neutral first. Sustained trading below 1.0609 will indicate that whole rise from 0.9916 is finished. This will also argue that recent price actions are merely part of the sideway pattern that started at 2007 low of 0.9634. In such case, deeper fall would be seen to outer trend line support (0.9634, 0.9916, now at 1.0009). On the upside, break of 1.1009 resistance will revive the case that fall from 1.1729 is merely a correction and rise from 0.9916 is still set to resume for 1.2296 resistance next.

In the longer term picture, a long term bottom is no doubt in place at 0.9634 with bullish convergence condition in monthly MACD. Rise from 0.9916 is set to resume the rise from 0.9634 and 55 months EMA should be taken out firmly. Such development will favor the case that long term down trend from 1.8305 has reversed and would favor stronger rise to 1.3283 resistance and above.

Pips Mover's Weekly Pivot Point for this week: 1.0701
Historical Levels up to date: 0.9880, 1.0685, 1.0830, 1.0875, 1.1000, 1.1175


USD/JPY  

USD/JPY dropped sharply to as low as 86.96 last week. The break of 88.13/25 support zone confirmed that fall from 94.97 has resumed. A temporary low is formed at 86.96 after the fall and hence, some consolidation might be seen initially this week. But recovery should be limited well below 90.27 resistance and bring fall resumption. Below 86.96 will target a retest on 84.81 low.

In the bigger picture, the break of 88.13 support confirms that medium term rebound from 84.81 has completed to 94.97 already. The corrective structure in turn indicates that whole down trend from 2007 high of 124.13 is still in progress. Retest of 84.81 should be seen next and break will confirm down trend resumption for next key level of 79.75. On the upside, break of 94.97 resistance is needed to be the first sign of medium term reversal. Otherwise, we'll stay bearish.

In the long term picture, current development suggests that USD/JPY has not bottomed out yet and the down trend will extend beyond 84.81 to 79.75. However, we'd be cautious on any sign of loss of momentum and reversal on next fall.

Pips Mover's Weekly Pivot Point for this week: 87.98
Historical Levels up to date: 93.50, 95.75, 98.00, 99.70, 101.35, 101.70, 103.00, 104.95, 105.50, 106.30, 107.20, 110.50


EUR/JPY  

EUR/JPY dipped to as low as 107.30 last week but recovered since then. Initial bias remains neutral this week and some more consolidations would be seen above 107.30 first. But after all, upside is expected to be limited below 113.40 resistance and bring down trend resumption. Below 107.30 will target 61.8% projection of 169.96 to 112.10 from 139.21 at 103.45 next. However, note that decisive break of 113.40 resistance will argue that an important bottom might be formed and bring stronger rebound.

In the bigger picture, fall from 139.21 is treated as resumption of long term down trend from 2007 high of 169.96 and should target 61.8% projection of 169.96 to 112.10 from 139.21 at 103.45 which is close to 100 psychological level. Though, we'd expect strong support between 2000 low of 88.96 and 100 psychological level to contain downside and bring reversal. On the upside, break of 119.64 support turned resistance is needed to be the first signal of medium term reversal. Otherwise, outlook will remain bearish.

In the long term picture, up trend from 88.96 has completed at 169.96 and made a long term top there. Based on the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. The third falling leg is now in progress but would be contained above 88.96 key support level. We'll hold on this this view unless fall from 169.96 shows sign of acceleration.

Pips Mover's Weekly Pivot Point for this week: 109.58
Historical Levels up to date: 124.25, 126.50, 130.90, 133.25, 135.65, 138.00, 140.00, 151.95, 156.00, 156.85, 164.00



USD/CAD

USD/CAD's strong rebound last week indicates that corrective fall from 1.0851 has completed at 1.0138 already. Such rebound stalled ahead of 1.0678 resistance and turned sideway. Initial bias remains neutral this week and some consolidations might be seen first. But in case of another fall , downside should be contained by 1.0319/0468 support zone and bring rally resumption. Break of 1.0678 will target 1.0851 high first.

In the bigger picture, the fall from 1.0851 to 1.0138 suggests that it's corrective in nature and revives the case that whole rebound from 0.9929 is not completed. Break of 1.0678 will affirm this bullish case and target 1.0851 and then 38.2% retracement of 1.3063 to 0.9929 at 1.1126 first, with prospect of extending further to 61.8% retracement at 1.1866 and above. However, note again that break of 1.0138 support will shift favor back to the case that 0.9929 is not the bottom yet. Though, considering bullish convergence conditions in daily and weekly MACD, we believe that medium term decline from 1.3063 is going to reverse soon, probably after a brief break of 0.9929 low. Hence, focus will be on reversal signal even in case of another fall.

In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term sideway pattern.

Pips Mover's Weekly Pivot Point for this week: 1.0568
Historical Levels up to date: 0.9805, 1.0060, 1.0270, 1.0470, 1.1025, 1.1140, 1.1270, 1.0160, 1.1940, 1.2040, 1.2225, 1.2475


AUD/USD

AUD/USD dropped sharply to as low as 0.8315 last week. The break of 0.8549 support suggests that corrective rise from 0.8066 is finished to 0.8858, just ahead of 61.8% retracement of 0.9380 to 0.8066 at 0.8878. While some recovery might be seen initially this week, we'd expect upside to be limited well below 0.8858 resistance and bring fall resumption. Below 0.8315 will target a test on 0.8066 support next.

In the bigger picture, the failure to sustain above 55 days EMA argues that rebound from 0.8066 was merely a correction in the larger decline and has finished. Break of 0.8066 will target next key support level at 0.7702 as medium term correction from 0.9404 extends. On the upside, break of 0.8858 is needed to confirm rebound resumption. Otherwise, we'll favor more downside.

In the longer term picture, long term correction from 0.9849 has likely completed at 0.6008 already, after being supported slightly above 76.4% retracement of 0.4773 to 0.9849. Rise from 0.6008 is possibly developing into a new up trend which extend the long term rise from 0.4773. We'll continue to favor the long term bullish case as long as 0.7702 support holds and expect an eventual break of 0.9849 high. However, a break of 0.7702 support will firstly argue that whole rise from 0.6008 has completed. Secondly this will open up the case that AUD/USD is in phase of a long term consolidation and will gyrate in the large range of 0.6008/0.9849 for some time.

Pips Mover's Weekly Pivot Point for this week: 0.8469
Historical Levels up to date: 0.7695, 0.7870, 0.7930, 0.8000, 0.8200, 0.8350, 0.8670

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