Monday, March 12, 2012

Week 11 Fx-Analysis

Commodity dollars Vs. Usd

Aud.Usd never ended up rallying north last week but did decide to break out of the flag towards the south making lower lows. At the moment this pair is heading towards 1.0500 levels where we might observe a small bounce up. The bears are also after 1.0426 with a fib target of 1.0321. Nzd.Usd shows a similar picture where it broke out of the channel towards the south. Shortly after the bulls took control around the 0.8100 level but failed to break above resistance levels (the bottom of the channel) around 0.8250. as we speak this pair is heading to take out the low around 0.8100 levels and if the bulls remain in control this week they will be after 0.8022 with a fib target of 0.7917. Usd.Cad is currently trading almost at the same level as last Sunday. The bulls took over this pair and rallied it back into the channel where they failed to break through major resistance levels. Im currently still bearish on this pair seeing how the bulls failed to take out the resistance levels around 1.0030, having that said, it is quite possible for the bulls to retest the resistance levels if the major USD fundamentals this week are positive. Currently the bears are still after 0.9779 and 0.9722.

Commodity dollars Vs. Jpy

The strong uptrend on Aud.Jpy, Nzd.Jpy came to a halt last week with evening stars on the daily. At the moment the market is a bit nervous with these two pairs, rightfully so; both pairs had an aggressive sell off two weeks ago where the bears managed to take out support. Furthermore both pairs failed to make a new high last week and these pairs are currently pointing down. So now the main question is who is going to take control between the bears and the bulls? The answer: which ever makes a new high or low. For Aud.Jpy the high and lows are around 84.80 and 87.59 and for Nzd.Jpy this is around 65.30 and 67.95. Cad.Jpy is the only one out of the trio that continued its aggressive move north last week and did make a new high. The bulls in this pair are after 85.09 but if the other two in this trio decide to tank expect this pair to have a deep retracement.

European countries Vs. Jpy

Gbp.Jpy, Chf.Jpy and Eur.Jpy show signs of nervousness and indecision. The investors seem to be waiting for the JPY fundamentals before deciding which side to choose. This partially explains the indecision we have been seeing lately. For all 3 pairs it will also come down between who can make a new high or low. Do proceed with caution around the upwards trendline and if the bears break through it expect a deeper retracement. And if the bulls take control they will complete their fib targets shown on the charts.

Eur. Usd and Usd.Chf

Eur.Usd broke through the upwards trendline and failed to stay above it during the retest—Major warning signs for the bulls. The bears are currently after 1.3030, 1.2975 with a fib target of 1.2856. 1.3030 has shown in the past as strong support levels so proceed with caution around this area. Usd.Chf got taken by the bulls last week and managed to break through the downwards trendline and is back in the channel between roughly 0.9110 and 0.9230. This pair is currently pushing up against the top of the channel and if the bulls manage to break through they will be after 0.9300, 0.9340 with a fib target of 0.9365. Also keep in mind all those USD fundamentals coming out this week that can really sway the market one way or another.

Gbp.Usd

The cable broke through the upward trendline and failed to stay above it during the retest, which is why im currently bearish on this pair. At the moment this pair is sitting on support levels around 1.5650 and if this level of support holds we might see this pair rally towards the top of the channel which is around 1.5881. On the other hand if support breaks the bears will be after 1.5528 with the potential to bring it down all the way to 1.5423 where strong support levels can be found.

By: Elias Osman

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