Technical Analysis

Originally Posted by lion of gail

but approx average volume if U say

You can check CME website herebritish pound quotes globex. You get real time pound dollars futures quotes and volume.

Talking Points:

• A Pullback in the Weekly Uptrend
• 2 Qualities Going Against This Trade
• The Key Support Zone for New Longs

GBPCAD is in a weekly uptrend, as shown on the chart below. Although the rising wedge is an end-of-trend signal, it is quite rare for it to end by tagging the upper trend line perfectly and then breaking down.
Instead, it is far more common for prices to first overshoot the top before staging a turn down. Thus, there may still be room for new long positions at this juncture.

Guest Commentary: Rising Wedge on GBP/CAD Weekly Chart



On the daily chart below, there is ample evidence of rising support from a shorter-term trend line, as shown. Price is now headed down to test this level, and although a bounce is possible, there are two key qualities that stand in the way of this trade:

• So far, there have only been two daily bearish candles (one is still forming) towards the level of support. It is more common to see at least three develop before a decent bounce
• The first bearish candle also completed a bearish engulfing pattern on the daily chart, which is a strong bearish signal

Guest Commentary: 2 Barriers Facing GBP/CAD Longs



On this basis, there is some doubt as to whether this trade has the potential to run very far, but the fact remains that no one knows for certain what the market will do next, so the best a trader can do is to take the trade and manage it accordingly.

If market conditions do become favorable for long positions, this could become a nice running trade as the trend continues. If it does not, however, there is still room to make a small profit on this trade because the level of support is significant.

Estimating the zone of support using the four-hour chart below is fairly straightforward. The rising support line provides the general support zone, and the lower level of support terminates at previous resistance. This gives the zone of interest as 1.6917-1.6977.

Guest Commentary: Key Support Zone for GBP/CAD



The time frame for entering this trade would be the hourly (not shown), with reversal divergence, pin bars, and bearish engulfing patterns all being viable triggers.

Although most set-ups are worth at least two or three tries, for the reasons mentioned earlier, this is true of this one in particular. More conservative traders may even decide to skip the first potential entry and only begin taking stabs at it on the second and third entries.

This has pros and cons, of course, with the major drawback being that the first entry may wind up being the right one, and price could take off on its merry way before giving a second entry opportunity.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com


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Talking Points:

• US Dollar Stumbles at November Top as Expected
• S&P 500 Chart Setup Warns of Reversal Downward
• Crude Oil Edging Back to November Swing Bottom

US DOLLAR TECHNICAL ANALYSIS – Prices pulled back as expected, forming a bearish Dark Cloud Cover candlestick patter below resistance in the 10641-53 area marked by the November 12 high and the 23.6% Fibonacci expansion. Initial support is at 10589, the 23.6% Fib retracement, with a break below that targeting the 38.2% mark at 10589. Alternatively, a turn above 10653 aims for the 38.2% expansion at 10839.




S&P 500 TECHNICAL ANALYSIS – Prices put in a Shooting Star candlestick below resistance at 1808.20, the 150% Fibonacci expansion, hinting a turn lower may be ahead. Negative RSI divergence and the outlines of a Rising Wedge chart formation reinforce the case for a downside scenario. Initial support is at 1798.50, the 138.2% Fib, with a break below that eyeing the 123.6% level at 1779.80. A push above resistance targets the 161.8% expansion at 1820.80.



GOLD TECHNICAL ANALYSIS – Prices bounced from support at 1222.60, the 76.4% Fibonacci expansion. Resistance is at 1256.18, the intersection of the 23.6% Fib retracement and a falling trend line set from late October. A break above that targets the 38.2% retracement at 1276.35. Alternatively, a reversal below support eyes the $1200/oz figure and the 100% expansion at 1179.63.




CRUDE OIL TECHNICAL ANALYSIS– Prices continue to consolidate above the November 14 low 92.49, with positive RSI divergence hinting a reversal higher may be in the works. Initial resistance at 94.47, marked the top of a falling channel set from late August. A break above that initially exposes the 14.6% Fibonacci retracement at 95.37. Alternatively, a move below 92.49 targets the 38.2% Fib expansion at 91.06.




--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Daily

Chart


-EURUSD continues to crawl higher. Near term focus is on 1.3650 (10/3 high and 10/21 low) and it’s worth noting that the rally from 1.3296 would consist of 2 equal waves at 1.3682.
-Only a drop below 1.3489 (previously 1.3400) would begin to suggest that the trend is not higher.
Trading Strategy: This market may be re-establishing its larger uptrend. At worst, the trend is sideways towards 1.3650 and maybe closer to 1.3800 at this point. Only a move below 1.3489 would suggest that we consider the short side. GBPUSD may be breaking out.

LEVELS: 1.3463 1.35001.3559 | 1.9586 1.3650 1.3695

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Talking Points:

• US Dollar Treading Water at November Swing High
• S&P 500 Remains Vulnerable to Downward Reversal
• Crude Oil Aims at $91.00 After Range Bottom Break

US DOLLAR TECHNICAL ANALYSIS – Prices pulled back as expected, forming a bearish Dark Cloud Cover candlestick patter below resistance in the 10641-53 area marked by the November 12 high and the 23.6% Fibonacci expansion. Initial support is at 10589, the 23.6% Fib retracement, with a break below that targeting the 38.2% mark at 10589. Alternatively, a turn above 10653 aims for the 38.2% expansion at 10839.




S&P 500 TECHNICAL ANALYSIS – Prices put in a Shooting Star candlestick below resistance at 1808.20, the 150% Fibonacci expansion, hinting a turn lower may be ahead. Negative RSI divergence and the outlines of a Rising Wedge chart formation reinforce the case for a downside scenario. Breaking the Wedge bottom – now squarely at 1800.00 – exposes the 138.2% and 123.6% Fib levels at 1798.50 and 1779.80, respectively. A push above resistance targets the 161.8% expansion at 1820.80.



GOLD TECHNICAL ANALYSIS – Prices bounced from support at 1222.60, the 76.4% Fibonacci expansion. Resistance is in the 1251.21-56.18 area, marked by the 23.6% Fib retracement and a falling trend line set from late October. A break above that targets the 38.2% retracement at 1276.35. Alternatively, a reversal below support eyes the $1200/oz figure and the 100% expansion at 1179.63.




CRUDE OIL TECHNICAL ANALYSIS– Prices broke lower out of consolidation, taking out the 23.6% Fibonacci expansion at 92.79 to expose the 38.2% level at 91.06. A further push beneath that eyes the 50% Fib at 89.66. Alternatively, reversing back above 92.79 aims for a falling channel top at 94.23.




--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Talking Points

• EUR/USD testing key resistance
• USD/CAD touches highest level since July
• AUD/USD rebounds of key support zone

Price & Time Analysis: EUR/USD

• EUR/USD probed above the 2nd square root relationship of the year’s high at 1.3595 on Thursday to trade to its highest level in three weeks
• A daily close over 1.3595 will shift our near-term trend bias to higher
• Interim support is seen at 1.3540, but weakness under 1.3475 is really needed to signal that a more important decline is developing
• The middle of next week is a medium-term cycle turn window
• A daily close over 1.3595 will shift our near-term trend bias positive

EUR/USD Strategy: Focus on long side opportunities on a close over 1.3595.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	*1.3475	1.3540	1.3590	*1.3595	1.3655

Price & Time Analysis: USD/CAD

• USD/CAD closed above the 4th square root relationship of the September low on Wednesday to trade to its highest level since early July
• Our near-term trend bias is higher in Funds while above 1.0505
• The 6th square root relationship of the 2Q13 high at 1.0610 is an important upside pivot with traction above exposing the 127% extension of the 2012 range at 1.0665
• A medium-term cycle turn windown is seen around the 1st half of next week
• Only a daily close below 1st square root relationship of the year’s high at 1.0505 would turn us negative on USD/CAD

USD/CAD Strategy: Like the long side while over 1.0505

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/CAD	*1.0505	1.0535	1.0575	*1.0610	1.0665

Focus Chart of the Day: AUD/USD

AUD/USD has rebounded sharply from just above the key support zone we highlighted on Tuesday. With the .9330 to .9360 area marking a convergence of several key Gann levels including the 7th square root relationship of the October high, the 2x1 Gann angle line of the year’s closing low and the 2nd square root relationship of the year intraday low it is a natural stopping point. Just how important this counter-trend move is will depend on the price action over the next few sessions. If Aussie can gain traction over .9170 on a daily close basis it likely sets up a stronger correction – perhaps back towards the neckline of the Head & Shoulders pattern. A potential hindrance to further upside is the short-term cyclical picture which is not particularly positive on the exchange rate as a minor turn window is seen today. A clear move under .9030 is required to signal that the broader downtrend is resuming.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Points

• EUR/USD nearing important cycle turn window
• USD/JPY smashes through important resistance
• AUD/USD rebounds off key support zone

Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: USD/JPY

• USD/JPY probed above the 1st square root progression of the year’s high at 102.75 to reach its highest level since late May on Monday
• Our near-term trend bias is positive on the exchange rate while over 100.65
• The 161.8% extension of the September/October decline at 103.05 is the next level of resistance ahead of the year’s high
• A medium-term cycle turn window is seen next week
• Only a daily close below the 2nd square root progression of the year’s high at 100.65 would undermine the immediate positive tone in the rate

USD/JPY Strategy: Focus on long side opportunities while over 100.65.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	*100.65	101.60	102.75	103.05	*103.70

Price & Time Analysis: AUD/USD

Charts

• AUD/USD fell to its lowest levels since early September on Friday before rebounding from strong support at the 7th square root relationship of the October high
• Our near-term trend bias is lower in the Aussie while below .9170
• A convergence of several important Fibonacci and Gann levels between .9060 and .9030 suggest it is an extremely important support zone and a daily close below is needed to confirm a resumption of the broader decline
• A medium-term cycle turn window is seen next week
• Only a daily close over .9170 will shift our near-term trend bias to positive in the Aussie

AUD/USD Strategy: We like being flat following the rebound from key support.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
AUD/USD	*0.9060	0.9100	0.9145	*0.9170	0.9220

Focus Chart of the Day: EUR/USD



The next week or so looks to be quite important for the Euro from a cyclical perspective. Starting around Wednesday and extending to next Tuesday a myriad of different cyclical methodologies all begin to converge. Perhaps the most important is a Fibonacci time relationship with last year’s low and the 1Q13 high at the end of the week. With EUR/USD having rallied steadily for over three weeks now a secondary high (versus the October high) of some kind forming during this turn window is clearly the favored scenario. Only aggressive weakness on a daily close basis over the next few days below 1.3430 would warn that the Euro has peaked ahead of schedule. Such aggressive weakness could also raise the possibility of a cyclical inversion (low instead of a high). Both look like relatively low probability scenarios at the moment.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Points

• Prices broke above resistance at 167.10 (100% Fib expansion)
• Resistance is now at 170.03 (123.6% Fib); above that targets 171.84 (138.2% Fib)
• A turn back below 167.10 aims for 164.18 (61.8% Fib exp.)

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Talking Points:
- The RBA held its main rate steady and tried to weaken the Aussie verbally.
- European currencies back at September/October 2008 highs versus Yen.
- Markets look to quiet ahead of event risk Wednesday through Friday.

INTRADAY PERFORMANCE UPDATE: 13:00 GMT
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): -0.24% (-0.10% prior 5-days)
ASIA/EUROPE FOREX NEWS WRAP
Higher yielding currencies are moving higher on the day although the same cannot be said about risky assets in general. US equity futures are slightly lower on the day and US yields are rather mixed. ‘Mixed’ would also be the best way to describe the US Dollar’s performance over the past several days, it having moved in an approximate 0.7% trading band since November 21.

The main push against the US Dollar today comes not from European FX (although they remain in the thick of things) but rather from the Tokyo session currencies. Of note, the Australian Dollar, after diving back to last week’s lows under $0.9060, has rebounded across the board in tandem with the New Zealand Dollar. The Reserve Bank of Australia kept its main refinancing rate on hold at 2.50% last night, and traders have thus far shrugged off commentary that the Aussie remains overvalued.


With perhaps a bit of short covering occurring in the commodity currencies after several days of weakness, a backdrop of steady or weakening US yields today or tomorrow might afford a bit of upside in the AUDUSD the next few days. While we remain bearish on the AUDUSD (given general upside pressure on US yields past week, month, and quarter), a rebound today could offer an opportunity to resell the currency higher:

AUDUSD Daily Chart: July 19 to Present



- The AUDUSD has carved out a sideways channel the past four days, between $0.9050 and 0.9160.
- The daily 8-EMA has been respected thus far as resistance during the downtrend the past three weeks.
- A close above the daily 8-EMA (0.9145) would give room for the pair to rebound back into a familiar supply/demand zone since July, between 0.9210 and 0.9280.
- Given the nature of the decline, preference is to sell rallies rather than buy dips.
- Ideal selling zone over next few days: 0.9250/55 (21-EMA) to 0.9280 (descending TL off of October 23 and November 20 highs).

--- Written by Christopher Vecchio, Currency Analyst

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Daily



-USDOLLAR traded to a nearly 3 month high on Tuesday before reversing and closing near the lows. The day qualifies as a key reversal.
-A higher low is in place at 10535. Look higher towards 10708 and 10757 as long as price is above 10535.
Trading Strategy: Long against 10535.
LEVELS: 10535 10566 10594 | 10661 10708 10757

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

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