Technical Analysis

Polish Zloty (EUR/PLN) – low inflation implies another interest rate cut

The EUR/USD rally and improved global sentiment helped emerging market currencies to regain ground they have lost the previous week. In Poland, also closely followed was the inflation reading, which showed historic lows of 0.5% in May (on a yearly basis). Core CPI on the other hand declined to 1% in May. Such low inflation rather confirms the MPC has no time to waste and we should expect another interest rate cut in June. Theses cut has already been discounted by the market and it had not affected the PLN. The sellout of treasuries also halted (the sellout accelerated the previous week) and with decreased risk aversion the Zloty appreciated this past week.*
It has to be noted that the central bank intervened (sold Euros for Zlotys) on the currency market last week in order to “decrease volatility on the Zloty market”. The effect, as usual, was short-term but it helped the EUR/PLN to decline to 4.23 from which level the market rebounded to the resistance of 4.28. Unable to fly higher, the market tumbled to the important support of 4.21. This level is crucial and if broken it can take the EUR/PLN down to 4.17. More probable though (supported by the stochastic oscillator showing the market is oversold) is a rebound next week, first to 4.25 and possibly to the resistance of 4.28
Hungarian Forint (EUR/HUF) – is the economy rebounding?

In the last couple of weeks macro data from Hungary positively surprised traders. First – better than expected GDP reading. Today, industrial production increasing as forecasted but showing even more potential (industrial orders increased by 10% on a yearly basis in April). Are the steps taken by PM Victor Orban more effective than those taken by Brussels in other Eurozone countries? That might be the case as Hungary is showing some signs of recovery. Of course, we need a series of reports confirming the economy is doing better, but still, it all looks promising. Also bullish on the local economy is Mark Mobius, who runs the Templeton Emerging Markets fund (holding large amounts of Hungarian sovereign debt). In a widely commented interview give to the largest finance newspaper in Hungary, Napi Gazdesagi, he stated the outlook looks bright and he does not expect big downturns. The future will show if he was right.*Looking at the chart, we see the EUR/HUF tested the crucial 300 level but was unable to break it. The corrective movement brought it down all the way to 290 (breaking on the way the 295 support). If the market ends this week below 290, it will have the door open to attack 285 next week. On the other hand, any rebound will be targeting the resistance at 295.
Romanian Leu (EUR/RON) – The other side of the argument

Mentioning volatility that would help the RON in the last report was just a general , still, while 4.60 was a step away, things looked overextended for EUR/RON. It was time for the National Bank to step in, and although there is no official comment on intervention, one may suppose that it actually happened. There were some good data points as well, as trade deficit shrank by about 323 mil. EUR in April (one third lower than in 2012) and industrial production rose by 1.9% m/m. CPI rose 5.23%, possibly delaying, in the overall volatile market environment, the start of rate cuts cycle. However, if this week was RON-powered, things may again sustain the Euro, given the jitters over the IMF visit that may bring a cease of a standby agreement.*Technical analysis showed a reversal for EUR/RON moving quotes to the lowest support we mentioned in the last report. 4.45 is definitely the most important level to watch, and a break below would signal piercing the 50% retracement and open room for a test of the 61.8% retracement at 4.4189 in a scenario that appears interesting. However a positive correction may let prices test resistances, and that brings us to 4.5479 and 4.5806, previous level of resistance and recent high respectively.


More...

EURUSD

What Forex Target Traders See: We are currently sitting @ 1.3347 in a wedge suggesting maybe one more move to the top. We are looking for that move to the R6 @ 1.3406 and then a reversal back to the 0.618 fibo @ 1.3187. The average (14 day) daily true range (ATR) for the pair currently is 110 pips.

http://mediaserver.fxstreet.com/Repo...0615152959.jpg

——————————————————————————–
USDJPY

What Forex Target Traders See: We are currently @ 94.35 in what could be the bottom and the start of an a-b-c retracement back to the 96.86. Should we see a break up there, look to the 99.37 area ( 0.500 Fibo) and a break down there and look for a double bottom @ 93.92. The average (14 day) daily true range (ATR) for the pair currently is 199 pips.

http://mediaserver.fxstreet.com/Repo...0615153027.jpg

——————————————————————————–
GBPUSD

What Forex Target Traders See: Cable is currently @ 1.5707 at the day chart trend line in a rising wedge. All are bearish signs. Look to the short side to the support (.500 Fibo) @ 1.5440 and then bounce or back to the bottom. The average (14 day) daily true range (ATR) for the pair currently is 126 pips.

http://mediaserver.fxstreet.com/Repo...0615153049.jpg

——————————————————————————–
AUDUSD – A great smooth currency for Newbie’s!

What Forex Target Traders See: Aussie is currently @ 0.9591 after breaking the down trend line. Expecting a bounce to the upside to the R3 @ 0.9700 and then another break to the R6 target @ 0.9937 area. We would finish up 5 waves at the R3 so don’t rule out the downside risk there. The average (14 day) daily true range (ATR) for the pair currently is 154 pips.

http://mediaserver.fxstreet.com/Repo...0615153111.jpg


More...

AUDUSD continues its downward movement from 1.0582, and the fall extends to as low as 0.9326. Further decline is still possible after a minor consolidation, and next target would be at 0.9200 area.Key resistance is at 0.9800, only break above this level will indicate that the downtrend from 1.0582 had completed at 0.9326 already, then the following upward movement could bring price back to 1.0700 zone.For long term analysis, AUDUSD formed a sideways consolidation in a range between 0.9390 (Oct 4, 2011 low) and 1.1080 (Jul 27, 2011 high). Deeper decline to 0.9000 area could be expected over the next several weeks.

http://www.forexcycle.com/archive201...5_audusd_1.png


More...

We have seen some massive turnover in all of the majors over the last two weeks and these flows finally seem to be drying up. The Yen crosses across the board have seen a big retracement, which is a healthy sign in any trend, and the AUD has been the big loser.

Not much of note on the economic calendar today and the main focus for AUD traders will be tomorrow’s RBA minutes. Yen traders will be watching the Nikkei for leads on the Tokyo open but overall I’m expecting a fairly quiet day with topside potential for pairs like AUD/JPY.

AUD/JPY has a potential inverted head and shoulders with a neckline at 90.00. There was a marginal break lower in early interbank trade but the full market open was back above there again. A bullish sign in my view!

http://mediaserver.fxstreet.com/Repo...0616233321.png

USD/JPY, apart from one obvious spike, hasn’t been able to rally much at all since the big slide began at 103.50 and the obvious target there for mine is the 93.40/50 level which was where the big 1000 pip rally began from after the April BOJ meeting.

I’m starting to turn a bit bullish in the short-term on AUD/USD, and if reported bids at .9550 are solid, then we could see a sharp push higher towards the first Fibo at .9805.

http://mediaserver.fxstreet.com/Repo...0616233337.png

EUR/USD is being capped by heavy protection of a long-term double no touch option structure ahead of 1.3400 but otherwise the main interest remains elsewhere.
Cable remains very well bid and EUR/GBP has slipped back towards the lower end of its recent ranges. I’m still quite bearish on the cross in the medium term and cable could see levels close to 1.60 before it runs out of steam.
Good luck today.


More...

US Oil (WTI) has continued to rally over the past few days, as people are worried that the rising conflict in Syria could spread to other regions in the Middle East. This problem was exacerbated yesterday when President Obama decided to provide the Syrian rebels with U.S. weapons after it was determined that Assad’s forces used chemical weapons.

Crude Oil’s break above the key $96.50-97.00 area, which saw the convergence of triangle resistance and inverted H&S neckline, indicates a potential further continuation higher. Presently, Oil is trading just below the 2013 high around $98.20/25, after testing it earlier in the session. This comes as daily RSI tests the key 60/65 level, yet still remains below – A break above would be indicative of a bullish move higher.
Next potential levels of resistance if new 2013 high is made:

• $100 – Psychological & barrier/option related
• $100.35/75 – 2012 April low & Sept. high
• $103.50/60 – 78.6% retracement of 2012 decline
• $104.25/50 – Triangle resistance drawn from 2011 high

http://mediaserver.fxstreet.com/Repo...0616224040.jpg
Chart Source: Forex Charts by eSignal

More...

EURJPY- WEDGE?

Currently we are at 149.05.. A couple of different scenarios. 1: bullish: a move to the upper day chart trend line @ 150.68 area) and break out we will look to the 0.382 fibo @ 151.52. 2: Bearish : A break down at the 1.2996 area would set up a nice move to the S7 @ 147.10. The average daily true range (ATR) for the pair currently is 233 pips.

http://mediaserver.fxstreet.com/Repo...0617131206.jpg

More...

Date: 06/17/13
EUR/USD (Momentum Review for 06/17/2013):

RSI (14): The RSI (14) is showing a bullish set up on the 1 hour chart, consolidating just above the 60 with no ‘bearish divergences’ between momentum and price present. The set up on the daily chart is strongly bullish, with RSI sitting above 60 (and no bearish divergences present)
MA’s of RSI (14): The 9MA of RSI has crossed above the 45MA of RSI (1 hour chart) which is a bullish development. The MA’s of RSI on the daily chart are strongly bullish

Pattern Review for (06/17/2013):

EUR/USD: 1 hour chart confirmed a pennant pattern with the close above 1.3355. The pattern has a measured move target of 1.3465

Shorter term patterns should always be taken in account with the longer term time frame in mind

Shorter Term Time Frames Pattern Table

http://mediaserver.fxstreet.com/Repo...0618003428.png

EUR/USD (1 hour chart): Pennant - (Bullish)

>1 hour close above 1.3355 confirmed the pennant pattern. The pattern has a measured move target of 1.3465

http://mediaserver.fxstreet.com/Repo...0618003449.png

Longer Term Time Frames Pattern Table

http://mediaserver.fxstreet.com/Repo...0618003532.png

**only closing prices (daily and weekly) are used for confirmation and exit levels.
**the ‘level’ column displays trigger for pattern to be confirmed, although entry price may be different based on where the market closes that particular day.


More...

Yesterday’s ‘risk-on’ rally in the Yen crosses was sharply reversed overnight after an article in the FT*suggested that Fed tapering of its QE program was very close. The overreaction to this story across all financial markets suggests that market positioning is at very uncomfortable levels and may even be reaching ‘bubble’ proportions across certain asset classes. I’d expect Asia to stay reasonably quiet ahead of tomorrow’s FOMC but the danger side would seem to be the downside for pairs like USD/JPY.

Today’s main risk event in Asia will be the release of minutes from the last RBA meeting and the market is not expecting any surprises.

The short-term down trend in USD/JPY remains in control and the wedge pattern (see chart) suggests some more sideways action before lower again. The*big downside level to watch is near 93.40 which was the launch-pad for a 1000 pip up-move after the April BOJ meeting.

http://mediaserver.fxstreet.com/Repo...0617230430.png

The inverted head and shoulders in AUD/JPY remains relevant (see chart) but a break below 89.90 will negate this. Topside resistance is at 91.50 and again at 92.50.

http://mediaserver.fxstreet.com/Repo...0617230448.png

AUD/USD should be the busy today around the time of the RBA minutes release. A resistance line is forming now around .9630 and support levels should be strong near .9430 ( see chart).

http://mediaserver.fxstreet.com/Repo...0617230507.png

The most interesting thing about EUR/USD is the reported barrier protection ahead of 1.3400 but this should change after the FOMC tomorrow when the market is likely to take on a different look.
EUR/CHF hasn’t succumbed to the risk-off bug and is back above 1.2325. The market remains bearish on EUR/GBP which suggests to me that we will have a short-covering stop-driven rally before the downtrend takes off.
Good luck today.


More...

EUR/USD Current price: 1.3353

http://mediaserver.fxstreet.com/Repo...0618135043.png

The EUR/USD maintains these last days range, having tested the 1.3400 level before falling on disappointing US housing data, but quickly recovered back to where it started, around current levels. The hourly chart, shows a short term ascendant trend line offering support around 1.3330, while technical readings remain flat in neutral territory. In the 4 hours chart, price just bounced higher from its 20 SMA, while indicators hold in positive territory, showing not much strength at the time being. Will be hard to see a clearer definition ahead of FOMC meeting tomorrow, with the pair expected to continue ranging in the 1.33/34 area.

Support levels: 1.3330 1.3300 1.3270
Resistance levels: 1.3400 1.3440 1.3480

GBP/USD Current price: 1.5584

http://mediaserver.fxstreet.com/Repo...0618135200.png

Pound nose dived on increasing UK inflation that reached 2.7% annual bases. The pair printed so far a daily low of 1.5564, and maintains a strong bearish tone according to the hourly chart, with indicators heading south in oversold levels and 20 SMA gaining bearish slope above current price. In the 4 hours chart technical readings also present an increasing bearish momentum, which points for a challenge of the 1.5550 support. A break below this last should trigger stops and see further depreciation in the pair.

Support levels: 1.5550 1.5520 1.5490
Resistance levels: 1.5610 1.5660 1.5700

USD/JPY Current price: 95.49

http://mediaserver.fxstreet.com/Repo...0618135306.png

The USD/JPY is finding some buyers amid dollar demand, having reached so far a daily high of 95.75. The hourly chart shows indicators aiming higher in positive territory, while price recovered above its 100 SMA that maintains a bearish slope. Short term bullish, an advance above mentioned high should favor an upward continuation towards 96. 20 area, 200 SMA in the mentioned time frame.*

Support levels: 95.25 94.90 94.50
Resistance levels: 95.75 96.05 96.30

AUD/USD: Current price: 0.9469

http://mediaserver.fxstreet.com/Repo...0618135336.png

Australian dollar extended its slide after RBA, having erased most of past week gains against the greenback. The hourly chart shows an upward corrective movement, with indicators aiming higher form oversold readings, but with price well below 20 SMA, now offering dynamic resistance around 0.9510. In the 4 hours chart technical readings present a strong bearish tone, that support a stronger downward continuation on a break below 0.9420 support.

Support levels: 0.9420 0.9380 0.9345
Resistance levels: 0.9510 0.9560 0.9600



More...

Good Afternoon, When I said "up week" in yesterday's blog, I wasn't thinking it could be this big. But, then again, we do have the Fed tomorrow. What does the market like to do ahead of the Fed? It tests it. Remember all of the "stress tests"? Well, the Fed has passed every one. Will they disappoint this time? I doubt it. So there should be some type of accomadative rhetoric that takes back any "when" scenario for tightening. If for some reason, the rhetoric does come across with an "end in sight", then the markets could very well be very, very overvalued.

Technically, the SPX broke out above local resistance and only has one more high to go. The same high that was put in when Bernanke spoke about how to exit the easy money stance.

In forex, the GBP was in a DOUBLE FALL LINE type of mood, with stong USD early and weak USD late. A pretty big range with a large retracement:

http://www.financebanter.com/assets/...bpusdmm151.png

Past performance is not indicative of future results
Happy Trading and Be Environmentally Cool
Coach Brian


More...