Technical Analysis

Good Afternoon,
We had the pleasure of receiving the FOMC statement - no change there. But could it be "buy the rumor, sell the fact?" What about the ECB tomorrow. If they come out with the same stance and don't do anything drastically more accomodative, could we see the same thing?
So far, weakening fundamentals haven't been able to get us through the 1600 double top in the SPX. Will poor(er) economic data push us over the top?
And what about the poor performance by the USD? 50% back in the GBP/USD. Could that come to an end as the Euro area gets more accomodative tomorrow?



Past performance is not indicative of future results
Here is that double top in the SPX with the projected target if it is in fact a double top:



Past performance is not indicative of future results
Check out USO to see a similar pattern.
Let's see if the jobs data comes in poor (for a second month in a row) on Friday and if that gives equities a bid.
Happy Trading and Be Environmentally Cool
Coach Brian


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EUR/USD Current price: 1.3078



The ECB cut rates by 0.25% as expected, and the EUR/USD maintained the positive tone, posting intraday gains above the 1.3200 level, and looking for an upward continuation. However, failure to overcome 1.3225 resistance, and Draghi’s words regarding the possibility of negative rates was enough to trigger a selloff in the pair towards current daily lows. The fact is that the bank did not announced negative rates, and barely considered them as a possibility. However, that was enough to set market mood. Moreover, confirms the pair is trading range bound in the 1.30/1.32 area, as now approaches to the base.*
The *hourly chart shows a strong break below the 38.2% retracement of the latest daily fall, around 1.3115, now key resistance, as bears will lead as long as below it. Despite the wide move, the pair has still more room for slides, with 1.2970/1.3000 as probable bottom for today.*

Support levels: 1.3050 1.3010 1.2970
Resistance levels: 1.3115 1.3150 1.3185

GBP/USD Current price: 1.5539



Pound is being weighted by EUR slide, although price is holding above the 1.5520/40 static support area. The hourly chart shows price hovering around a flat 20 SMA as technical indicators turn bearish and approach their midlines, although with no strength. In the 4 hours chart the pair maintains the positive tone, with 20 SMA offering dynamic support around current levels. With dollar on demand, there are not much chances of a strong recovery, yet the upside remains limited by 1.5605 Fibonacci resistance for today.

Support levels: *1.5530 1.5490 1.5450*
Resistance levels: 1.5580 1.5610 1.5650

USD/JPY Current price: 97.75



The USD/JPY trades back lower after testing 98.38 with the ECB, capped in the short term by 200 SMA. The hourly chart shows price finding now some buyers around former resistance of 97.50, while indicators continue heading higher in positive territory. In the 4 hours chart technical readings remain neutral, and a break above 98.40 resistance is now required to confirm and advance towards 98.80/92.00 area.

Support levels: 97.50 97.10 96.70*
Resistance levels: 98.20 98.40 98.80

USDCAD remains in downtrend from 1.0293, the rise from 1.0051 is likely consolidation of the downtrend. Resistance is at 1.0145, as long as this level holds, another fall could be expected after consolidation, and a breakdown below 1.0051 could signal resumption of the downtrend. On the upside, a break above 1.0145 will suggest that the downtrend had completed at 1.0051 already, then the following upward movement could bring price back to 1.0250 area.

The market reacted in quite a surprising fashion to comments from Mario Draghi that the ECB is ‘technically ready’ to lower deposit rates. He has said this before so it shouldn’t have come as too much of a surprise but obviously the short-term EUR market was caught long.
EUR/USD fell very sharply from 1.3200 to 1.3040 but reports from some of the major banks put all of the selling down to leveraged accounts, which would support the theory that last night’s sell-off was just a clean out of speculative intraday longs. The bullish trend-line was marginally breached but prices are now back above there.*



USD/JPY has bounced almost 100 pips from yesterday’s lows with barrier protection ahead of 97.00 proving to be very solid indeed. I’m expecting a fairly quiet Asian session but with a definite buy-dip bias now in play. Remember that tonight is NFP so we may get some positional readjustment as well.
AUD/USD has been supported by very solid bids around 1.0220/25 and the bears will need to break below there to generate some momentum. I’d expect many of these bids to be cancelled around the time of the NFP data so keep that in mind. Offers are waiting near 1.0330/40 so risk-reward pre-NFP would seem to favour the bulls from current levels near 1.0250.
AUD/NZD support at 1.2050 was marginally broken and of course EUR/AUD gave back all of the previous day’s gains.
EUR/CHF is back at 1.2200, and this is the level where volumes suddenly spiked higher on a bullish break some weeks ago. A few daily closes below here and we may see a further wearing-down of bullish conviction.
Sterling made some modest gains on the crosses, against the EUR and the JPY, after slightly improved construction PMI data improved the mood toward the UK economy.
Good luck today and TGIF.


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USDCAD has come onto our radar recently as it has moved inversely to our proprietary model, with the model remaining firm and price continuing to decline.
Backdrop:
These models were built in an effort determine where many of the FX pairs should be trading, thus we continuously monitor currencies which we have deemed to have a stronger degree of explanatory power using our regression analysis (R2), with variables which we see as statistically significant.
Our proprietary model, which takes into account the VIX Index, CRB Index and 5-year interest rate differentials between the United States & Canada – produces an R2 of 0.8580 since April 2011 and implies a “fair value” of 1.0214. Based on current levels, this suggests USDCAD is approximately 1.61 standard deviations below this reading.
Technically speaking, USDCAD has largely been in correction mode since the beginning of March, but appears to be finding support around 1.0070/80 – Convergence of the 100-day sma, daily 144 & 169 EMA’s & 38.2% retracement of the September-March advance. While this in itself is not necessarily indicative of a rally going forward, it would not be a complete surprise if it were to occur. *
In other news, a little over an hour ago the Bank of Canada finally named a replacement for the outgoing Governor. Mark Carney’s successor is Stephen Poloz, a former central bank economist and present head of Export Development Canada. Over the coming days and weeks the market will likely be hanging on every comment Poloz makes with regard to future monetary policy.
Keep in mind tomorrow sees the all-important US April Employment report (8:30am ET) – Market consensus is currently looking for Non-Farm Payrolls (NFP) to come in around +140K jobs and the unemployment rate to remain unchanged at 7.6%.




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The EUR/USD continues mounted in a roller coaster, nose diving to 1.3032 where it set a double floor with yesterday low, on up beating US employment figures. US stocks soared along with the news, and current session is all about risk appetite: dollar gains have been completely reversed by European currencies, with the EUR/USD breaking back above 1.3115, now short term support. Technically, the hourly chart is bullish, with 1.3150 now as next strong resistance level to watch. Current upward momentum may ease now and find sellers around the level, with buyers still aligned around 1.3040: after all the huge noise, the pair is heading to close the week inside its last month range.
Support levels: 1.3115 1.3070 1.3040*
Resistance levels: 1.3150 1.3190 1.3225




The GBP/USD fall up to 1.5479 before recovering over 100 pips in a bit more than an hour still trading below key 1.5605, this week high and Fibonacci resistance. The hourly chart shows price back above 20 SMA that maintains the bullish slope as indicators head strongly north in positive territory supporting current upward tone. Still a break of mentioned high is required to confirm an extension of current trend, towards 1.5650/60 in the short term but eyeing 1.5780 area for next week.
Support levels: *1.5530 1.5490 1.5450*
Resistance levels: 1.5610 1.5650 1.5690

USD/JPY Current price: 99.13





USD/JPY soared to 99.25 with the news, trading steadily near that high and with scope now to extend its gains towards 99.60 amid strong market sentiment. The hourly cart shows a limited downside correction, as indicators reach extreme overbought readings, but as long as price stands above 98.80, buyers will remain in control. In the 4 hours chart technical readings turned bullish from its previous neutral stance, supporting the shorter term view.
Support levels: 98.80 98.40 98.10*
Resistance levels: 99.20 99.60 100.00

AUD/USD: Current price: 1.0316





AUD/USD trades back above 1.0300, with a strong upward momentum in the hourly chart that shows indicators going straight north while price moves well above a slightly bullish 20 SMA. However, the bigger picture continues to be bearish, and the pair needs now to face strong selling interest around 1.0330/50 price zone. The area should be enough to keep the upside limited today, with possibilities of a retracement back towards 1.0280 after being tested.
Support levels: 1.0300 1.0260 1.0220*
Resistance levels: 1.0335 1.0380 1.0410

EURUSD
What Forex Target Traders See: We are currently sitting @ 1.3118 and direction is still unknown since we have had 5 waves up and an abc correction fueled by NFP. A couple of different scenarios. 1: bull move- a break to the R1 @ 1.3009 with resistance at the day chart top @1.3252 2: Bear move- a break down to the R3 @ 1.3099 with support at the day hcart bottom @ 1.3020 area and then a bounce. The average (14 day) daily true range (ATR) for the pair currently is 110 pips.

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USDJPY
What Forex Target Traders See: We are currently @ 99.04 and in a sideways move on the lower time compressions which is bullish for the cross. Looking to move to the R4 resistance (which may prove to be the end). Longer term target is the day chart top @ 99.97. The average (14 day) daily true range (ATR) for the pair currently is 117 pips.



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GBPUSD
What Forex Target Traders See: Cable is currently @ 1.5580 and has been testing the upper trend line. Look to square up at the 0.500 fibo @ 1.5518 and then continuation to the S3 @ 1.5463. Maybe a strong enough move to get top the S4 @ 1.5374. The average (14 day) daily true range (ATR) for the pair currently is 106 pips.



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AUDUSD – A great smooth currency for Newbie’s!
What Forex Target Traders See: Aussie is currently @ 1.0320 in a box after bouncing off the day chart bottom @1.0231 area. Expecting a short move to the upside ( 1.0351) and then another thrust down. The average (14 day) daily true range (ATR) for the pair currently is 76 pips.

GBPUSD stays in a upward price channel on daily chart, and remains in uptrend from 1.4831. Support is located at the lower line of the channel, as long as the channel support holds, the uptrend could be expected to continue, and next target would be at 1.5800 area.On the downside, a clear break below the channel support will indicate that the uptrend has completed, then pullback to 1.5000 area could be seen.For long term analysis, GBPUSD is in uptrend from 1.4831. Further rise towards 1.6000 could be expected over the next several weeks.




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

• EURUSD: 1.3170-1.3185 on the upside, 1.3060-1.3075 on the downside.
  
• AUDUSD: 1.0340-1.0355 on the upside, 1.0200-1.0215 on the downside.
  
• USDJPY: 100.25-100.40 on the upside, 97.70-97.85 on the downside.
  
• GBPUSD: 1.5615-1.5630 on the upside, 1.5480-1.5495 on the downside.
  
• USDCAD: 1.0150-1.0165 on the upside, 1.0020-1.0035 on the downside.
  
• NZDUSD: 0.8580-0.8595 on the upside, 0.8470-0.8485 on the downside.
  
• EURJPY: 131.40-131.55 on the upside, 127.20-127.35 on the downside.
  
• EURGBP: 0.8450 -0.8465 on the upside, 0.8365-0.8380 on the downside.
  
• USDCHF: 0.9390-0.9405 on the upside, 0.9270-0.9285 on the downside.
  
• AUDJPY: 103.70-103.85 on the upside, 99.40-99.55 on the downside.
  
• EURAUD: 1.2840-1.2855 on the upside, 1.2630-1.2645 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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Current level - 1.3113
Two consecutive tests of 1.3035 support area have failed and the pair is caught in *a range below 1.3150 resistance zone. While the mentioned resistance is intact, my outlook will be bearish, for a slide through 1.3030, en route to 1.2950 low.

1.3150	1.3244	1.3320	1.3710
1.3035	1.2950	1.2950	1.2740

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Current level - 99.26
The outlook here is bullish, for a another tight test of 100.00 sentiment area before one more downswing to 98.40. Initial support is projected at 99.00, followed by the major level at 98.40.

100.00	100.00	100.00	104.20
99.00	98.40	97.00	95.75

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Current level - 1.5576
Although the uptrend here is still intact, my outlook is counter-trend due to the major resistance around 1.5610-30 and I expect a sell-off through 1.5480, en route to 1.5370. Initial minor support is projected at 1.5550.

1.5610	1.5610	1.5610	1.5840
1.5550	1.5480	1.5197	1.4830