Technical Analysis

Propareos levels (areas where probabilities of price action reversal or saturation reach 90%; valid till 09:00 GMT):

• EURUSD: 1.3310-1.3325 on the upside, 1.2945-1.2960 on the downside.
  
• AUDUSD: 0.9270-0.9285 on the upside, 0.9165-0.9180 on the downside.
  
• USDJPY: 98.85-99.00 on the upside, 96.65-96.80 on the downside.
  
• GBPUSD: 1.5585-1.5600 on the upside, 1.5270-1.5285 on the downside.
  
• USDCAD: 1.0595-1.0610 on the upside, 1.0270-1.0285 on the downside.
  
• NZDUSD: 0.7820-0.7835 on the upside, 0.7680-0.7695 on the downside.
  
• EURJPY: 129.95-130.10 on the upside, 127.40-127.55 on the downside.
  
• EURGBP: 0.8560 -0.8575 on the upside, 0.8475-0.8490 on the downside.
  
• USDCHF: 0.9430-0.9445 on the upside, 0.9185-0.9200 on the downside.
  
• AUDJPY: 91.25-91.40 on the upside, 89.00-89.15 on the downside.
  
• EURAUD: 1.4440-1.4455 on the upside, 1.4105-1.4120 on the downside.
  

Warning! Propareos levels do not take into account fundamental developments. Their validity is reduced on days when the NFP is released and when Central Banks change their interest rate.




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Majors

EUR/USD: SELL AT 1.3150 FOR 1.3034 OBJECTIVE, STOP 1.3185
USD/JPY: BUY 97.50 NOT FILLED, POSS BUY
GBP/USD: SELL AT 1.5445 FOR 1.5290 OBJECTIVE, STOP 1.5497
USD/CHF: LONG AT .9280 FOR .9418; REVISED STOP AT .9267
AUD/USD: SELL AT .9285 FOR .9092; STOP AT .9330

USD/CAD: BUY DIPS
Crosses

EUR/JPY: POSSIBLY SELL
EUR/GBP: POSS SELL

EUR/CHF: SELL AT 1.2288 FOR A 1.2191 OBJECTIVE; STOP AT 1.2330
EUR/CAD: POSS BUY
GBP/JPY: BUY AT 151.10 FOR 154.20, STOP AT 150.35

NZD/USD: SELL AT .7840 FOR A .7620 OBJECTIVE; STOP AT .7900


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• As expected, a low level consolidation (neutral outside Monday) to start the week after a push last week to hold just ahead of our long-held target at the critical 38.2% retrace of the entire 2008-11 rally at .9145.

• Having pushed below the key 2011 low at .9388, to complete a long term top, we see threat below .9145 into July, through psychological .9000 to chart props .8900 & .8770 and maybe to the 50% retrace at .8545.

• We favour further consolidation Tuesday, capped by the .9440/50 area, but with growing risk through midweek for a break below .9145..

WHAT CHANGES THIS?

• Only above .9450 eases bear risk with a switch to neutral above .9665.

Monthly AUDUSD





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Propareos levels (areas where probabilities of price action reversal or saturation reach 90%; valid till 09:00 GMT):

• EURUSD: 1.3150-1.3165 on the upside, 1.3055-1.3070 on the downside.
  
• AUDUSD: 0.9335-0.9350 on the upside, 0.9115-0.9130 on the downside.
  
• USDJPY: 98.90-99.05 on the upside, 96.80-96.95 on the downside.
  
• GBPUSD: 1.5510-1.5525 on the upside, 1.5305-1.5320 on the downside.
  
• USDCAD: 1.0560-1.0575 on the upside, 1.0440-1.0455 on the downside.
  
• NZDUSD: 0.7795-0.7810 on the upside, 0.7665-0.7680 on the downside.
  
• EURJPY: 129.50-129.65 on the upside, 127.00-127.15 on the downside.
  
• EURGBP: 0.8550 -0.8565 on the upside, 0.8445-0.8460 on the downside.
  
• USDCHF: 0.9395-0.9410 on the upside, 0.9265-0.9280 on the downside.
  
• AUDJPY: 91.10-91.25 on the upside, 89.25-89.40 on the downside.
  
• EURAUD: 1.4355-1.4370 on the upside, 1.4070-1.4085 on the downside.
  

Warning! Propareos levels do not take into account fundamental developments. Their validity is reduced on days when the NFP is released and when Central Banks change their interest rate.




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• More significant erosion this morning after, a low level consolidation pause thus far this week reinforces the aggressive erosion of last week.

• The prior break below the 1321 low to hit long term chart/ 50% retrace support, 1309/02 target has been enhanced today already by the break below modest support from a previous peak at 1266.

• We now see little support of note down to the 61.8% retrace/ chart supports at 1155, which we now see as the risk into July.

• Moreover, overshoot risk for Q3 will be closer to the 2010 swing low at 1044 ahead of the psychological 1000 level.

Weekly Gold Future




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Propareos levels (areas where probabilities of price action reversal or saturation reach 90%; valid till 09:00 GMT):

• EURUSD: 1.3165-1.3180 on the upside, 1.3010-1.3025 on the downside.
  
• AUDUSD: 0.9305-0.9320 on the upside, 0.9185-0.9200 on the downside.
  
• USDJPY: 98.45-98.60 on the upside, 96.80-96.95 on the downside.
  
• GBPUSD: 1.5475-1.5490 on the upside, 1.5370-1.5385 on the downside.
  
• USDCAD: 1.0555-1.0570 on the upside, 1.0435-1.0450 on the downside.
  
• NZDUSD: 0.7780-0.7795 on the upside, 0.7675-0.7690 on the downside.
  
• EURJPY: 128.60-128.75 on the upside, 127.20-127.35 on the downside.
  
• EURGBP: 0.8510 -0.8525 on the upside, 0.8440-0.8455 on the downside.
  
• USDCHF: 0.9435-0.9450 on the upside, 0.9285-0.9300 on the downside.
  
• AUDJPY: 91.20-91.35 on the upside, 89.40-89.55 on the downside.
  
• EURAUD: 1.4250-1.4265 on the upside, 1.4040-1.4055 on the downside.
  

Warning! Propareos levels do not take into account fundamental developments. Their validity is reduced on days when the NFP is released and when Central Banks change their interest rate.




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In our original update, EURUSD diverges from our proprietary mode on June 12th, we cited that our “model takes into account EURUSD’s 1-month at-the-money option volatility, equity spread between Spain’s Ibex 35 & the US’s S&P500, and the 2-year interest rate differential between Germany & the United States – produces an R2 of 0.8708 since the beginning of June 2012 and implies a “fair value” of 1.3088. Accordingly, based on current levels this suggests EURUSD is overvalued by approximately 2.05 standard deviations.”
Taking a look at this same model, updated with the past 2 weeks of inputs, it currently implies a “fair value” of 1.2855. Thus, we could see a further EURUSD decline over the coming days. Keep in mind we could see additional month-end flows heading into Friday’s 11am ET fix, which as represented by today’s price action may continue to underpin the USD.


Source: Bloomberg, FOREX.com
Just for safe measures, we decided to run a second proprietary model which takes into account:

• EURUSD 1-week 10 delta Risk Reversal
• 2-year interest rate differential between Germany & the United States
• 5-year CDS spread between Spain, Italy, Ireland & Portugal and Germany

This produces an R2 of 0.8804 since the beginning of June 2012 and implies a more modest “fair value” of 1.2950.


Source: Bloomberg, FOREX.com


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EUR/USD - Euro / US Dollar
Entry: 1.3025
Stop: 1.3055
Resistances: 1.311 - 1.3085 - 1.3045
Supports: 1.2935 - 1.297 - 1.2995



USD/CHF - US Dollar / Swiss Franc
Entry: 0.943
Stop: 0.9395
Resistances: 0.952 - 0.9495 - 0.9445
Supports: 0.932 - 0.937 - 0.9405



USD/CAD - US Dollar / Canadian Dollar
Entry: 1.044
Stop: 1.046
Resistances: 1.0495 - 1.046 - 1.0445
Supports: 1.0365 - 1.039 - 1.0425



GBP/USD - British Pound / US Dollar
Entry: 1.5335
Stop: 1.5365
Resistances: 1.5435 - 1.5395 - 1.5345
Supports: 1.5235 - 1.5275 - 1.53



EUR/GBP - Euro / British Pound
Resistances: 0.854 - 0.852 - 0.851
Supports: 0.845 - 0.847 - 0.849



AUD/USD - Australian dollar / US Dollar
Resistances: 0.9435 - 0.9395 - 0.934
Supports: 0.9155 - 0.924 - 0.929



EUR/CHF - Euro / Swiss Franc
Resistances: 1.235 - 1.231 - 1.229
Supports: 1.222 - 1.2235 - 1.226



EUR/CAD - Euro / Canadian Dollar
Resistances: 1.3675 - 1.364 - 1.361
Supports: 1.3525 - 1.3565 - 1.3585



EUR/AUD - Euro / Australian dollar
Resistances: 1.41 - 1.406 - 1.401
Supports: 1.383 - 1.389 - 1.395



USD/JPY - US Dollar / Yen
Resistances: 99 - 98.7 - 98.25
Supports: 96.9 - 97.2 - 97.6



EUR/JPY - Euro / Yen
Resistances: 128.4 - 128.15 - 127.8
Supports: 126.6 - 127 - 127.45



GBP/JPY - British Pound / Yen
Resistances: 151.35 - 150.95 - 150.4
Supports: 148.6 - 149.25 - 149.8




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• We have stressed over the past week that although we viewed recent price action as defensive within a range, the bias was skewed lower for a more negative tone to surface.

• The plunge through recovery support at 1.3178 last Friday shifted the tone to range defensive and the break over the past 24 hours below 1.3040/30 has shifted the near term outlook to more negative for further erosion to retrace and chart supports at 1.2930 and 1.2835/20 into July.

• The neckline/ chart support area at 1.2795 should provide a solid support.

WHAT CHANGES THIS?

• Above 1.3235/40 would switch back to a neutral theme; only through 1.3416/34 resistance would re-energize upside.

Daily EURUSD





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EURUSD

What Forex Target Traders See: We are currently sitting @ 1.3016 just below the .618 Fibo in a 5 wave move down. We are waiting to see if we get a bounce on the day chart trend line or bottom 1.2952-1.2975 back to the top of the trend and then we will see. A breakout look to the 0.382 Fibo @ 1.3183 and a break down look to the S6 @ 1.2806. The average (14 day) daily true range (ATR) for the pair currently is 101 pips.



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USDJPY

What Forex Target Traders See: We are currently @ 99.19 in a rising wedge which is ultimately bearish for the pair but will take a while. Should we see a move all the way to the top of the wedge @ the R5 @ 100.63. Dips will give a great opportunity on the way. average (14 day) daily true range (ATR) for the pair currently is 165 pips.



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GBPUSD

What Forex Target Traders See: Cable is currently @ 1.5210 just above the day chart up trend. The recent move however indicates a 4th wave correction and then a move to the 5th wave @ 1.5000. Watch 1.5100 as another bounce point. The average (14 day) daily true range (ATR) for the pair currently is 123 pips.



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AUDUSD – A great smooth currency for Newbie’s!

What Forex Target Traders See: Aussie is currently @ 0.9144 on the 0.500 fibo and a big support cluster. If we assume the wave count starts @ 0.9779 then the 5th wave is still below. Look to the S8 9 `1 y chart bottom @ 0.8809 as the target but don’t look for a straight shot sell on the rallies. The average (14 day) daily true range (ATR) for the pair currently is 142 pips.




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