Technical Analysis

• EURUSD reacts to long term slope and Fibonacci confluence
• AUDUSD trying to bounce
• USDCHF median line structure proving useful

EUR/USD
Weekly



-“BIG picture, monthly RSI has broken out of a triangle pattern. Sometimes, a pattern breakout in momentum (or OBV) precedes the breakout in price. The development’s implications are obviously significant.”
-A number of calls for parity have been published recently. While the long term pattern suggests an eventual print near .90, the sudden aggressively bearish calls come just after a record small speculator short position and record open interest in euro futures was recorded in November. The same COT profile was evident in May 2012, before the EURUSD bottomed in July. Aggressive forecasts are often published when it’s comfortable to do so, which means that the trend is embedded in the public consciousness to the point of extremity. The path to .90 or so won’t be smooth (in other words…more 2 way trade). Former support may provide resistance from 1.1640 to 1.2040.

GBP/USD
Weekly




-The recent GBPUSD bounce was rejected at channel resistance, which sets the stage for additional weakness towards 1.4812 and possible 1.4550 (measured move).

AUD/USD
Weekly



-AUDUSD may be trying to put in a floor of sorts as the rate has held up since putting in a large range and volume reversal on Tuesday. The larger trend remains lower however with resistance estimated at .8030/50. The next potentially important support probably isn’t until the 61.8% retracement of the 2001-2011 rally at .7183.

NZD/USD
Weekly




-“NZDUSD traded to the 61.8% retracement of its 3 year range today (.7929) and the next level of interest probably isn’t until the 2013 Labor Day gap at .7722. One can’t help but notice that an epic double top is possible with a target of .5898. That would trigger on a drop below .7370.”
-The large double top triggered so watch for resistance near .7530/50 now.

USD/JPY
Weekly



-“USDJPY held up into the New Year and said January decline is underway. A sideways pattern could take hold between roughly 117 and 120.”
-Favor a broad range as 119.80-120.70 as resistance and 116.40-117.10 as support. A move through either one of these zones would usher in larger move towards 124-128 or 110-114.

USD/CAD
Weekly




-“USDCAD has pushed through the 2007 high at 1.1875, 61.8% extension of the 2007-2009 rally from the 2011 low at 1.1882, and several upward sloping parallels. The next cluster of technical levels is between 1.25 and 1.2730.”
-USDCAD nearly traded 1.28 on January 30th (the rate put in a top last year on the 31st) and has since retraced everything since 1/23. 1.2180 (38.2% of rally from November low) may provide important support for another rally attempt. Near term, 1.2640 is resistance.

USD/CHF
Weekly



-Since banging off of a lower parallel (after SNB), USDCHF has rallied and is just pips from the median line of that structure. The line in question is just pips from the October 2014 low at .9352. Watch for resistance. A reaction targets .8820/30 as support. A move over the mentioned median line opens up .9530/50 (November and December 2014 lows).



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Talking Points:

• US Dollar Continues to Tread Water Below Six Year High
• S&P 500 Stalls at Familiar Monthly Range Top Once Again
• Crude Oil Stalling, Gold Sinks to Lowest Level in 4 Weeks

US DOLLAR TECHNICAL ANALYSIS – Prices may be preparing to decline after prices put in a bearish Evening Star candlestick pattern. Negative RSI divergence reinforces the case for a downside scenario. Near-term trend line support is in the 11740-73 area, marked by a rising trend line and the 14.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 23.6% level at 11653. Alternatively, a push above the 11854-76 zone (March 2009 high, 14.6% Fib expansion) clears the way for a test of the 23.6% threshold at 11963.



S&P 500 TECHNICAL ANALYSIS – Prices are in consolidation mode after declining as expected following the appearance of a bearish Evening Star candlestick pattern. A daily close below the 23.6% Fibonacci retracement at 2028.00 exposes the 1982.70-88.00 area marked by the 38.2% level and a rising trend line. Alternatively, a push above the January 9 high at 2068.60 targets the December 29 top at 2092.60.



GOLD TECHNICAL ANALYSIS – Prices resumed moving lower anew, sliding to the weakest level in four weeks. Sellers now aim at 1220.58, the 61.8% Fibonacci retracement, with a break below that exposing the intersection of the 76.4% level and a rising trend line at 1200.05. Alternatively, a move above the 50% Fib at 1237.18 targets the 38.2% retracement at 1253.77.



CRUDE OIL TECHNICAL ANALYSIS – Prices pushed higher following a prolonged period of consolidation after bottoming as expected above the $45.00/barrel figure. A daily close above the 38.2% Fibonacci retracement at 59.08 exposes the 50% level at 63.38. Alternatively, a reversal below the 23.6% Fib at 53.77 targets the 14.6% retracement at 50.49.




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

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Talking Points:

• US Dollar May Have Finally Began a Bearish Reversal
• S&P 500 Aims for December Top After Resistance Break
• Gold Finds Support, Crude Oil Rally May Fail Near $59

US DOLLAR TECHNICAL ANALYSIS – Prices may have finally started to turn lower as expected following the appearance of a bearish Evening Star candlestick pattern. Near-term support is at 11740, the 14.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 23.6% level at 11653 Alternatively, a reversal above trend line support-turned-resistance at 11819 clears the way for a test of the 11854-76 zone (14.6% Fib expansion, March 2009 high).



S&P 500 TECHNICAL ANALYSIS – Prices edged above resistance at 2080.70, the 38.2% Fibonacci expansion, to expose the December 29 high at 2092.60. A break above that on a daily closing basis exposes the 50% level at 2112.90. Alternatively, a turn back below 2080.70 targets resistance-turned-support marked by the January 9 top at 2068.60.



GOLD TECHNICAL ANALYSIS – Prices are testing support at 1218.80, the 50% Fibonacci retracement, with a break below that on a daily closing basis exposing the intersection of rising trend line support and the 61.8% level at 1197.86. Alternatively, a reversal above the 38.2% Fib at 1239.73 aims for the October 21 high at 1255.20.



CRUDE OIL TECHNICAL ANALYSIS – Prices continue to push higher as expected, with a narrow breach of the 38.2% Fibonacci retracement at 59.08 exposing the 50% level at 63.38. A further push beyond that targets the 61.8% Fib at 67.68. Negative RSI divergence wars of fading upside momentum however, hinting a turn downward may be ahead. A reversal back below 59.08 aims for the 23.6% retracement at 53.77.




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

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• USDJPY broad range still favored
• GBPUSD resistance likely near 1.55
• AUDUSD weekly candles point to behavior change

EUR/USD
Weekly



-“BIG picture, monthly RSI has broken out of a triangle pattern. Sometimes, a pattern breakout in momentum (or OBV) precedes the breakout in price. The development’s implications are obviously significant.”
-A number of calls for parity have been published recently. While the long term pattern suggests an eventual print near .90, the sudden aggressively bearish calls come just after a record small speculator short position and record open interest in euro futures was recorded in November. The same COT profile was evident in May 2012, before the EURUSD bottomed in July. Aggressive forecasts are often published when it’s comfortable to do so, which means that the trend is embedded in the public consciousness to the point of extremity. The path to .90 or so won’t be smooth (in other words…more 2 way trade). Former support may provide resistance from 1.1640 to 1.2040.

GBP/USD
Weekly



-GBPUSD has turned up from slope support on the weekly and a breakout from a 1 month inverse head and shoulders pattern is valid above 1.5195 low. The reversal pattern’s objective is 1.5494, which is in line with the December low at 1.5485.

AUD/USD
Weekly



-“AUDUSD may be trying to put in a floor of sorts as the rate has held up since putting in a large range and volume reversal on Tuesday. The larger trend remains lower however with resistance estimated at .8030/50. The next potentially important support probably isn’t until the 61.8% retracement of the 2001-2011 rally at .7183.”
-The last 2 weekly candles (key reversal and inside doji), at slope support mind you, are consistent with a near term change in behavior.

NZD/USD
Weekly



-“NZDUSD traded to the 61.8% retracement of its 3 year range today (.7929) and the next level of interest probably isn’t until the 2013 Labor Day gap at .7722. One can’t help but notice that an epic double top is possible with a target of .5898. That would trigger on a drop below .7370.”
-The large double top triggered so watch for resistance near .7530/50 now.

USD/JPY
Weekly



-Continue to favor a broad range as 119.80-120.70 as resistance and 116.40-117.10 as support. A move through either one of these zones would usher in larger move towards 124-128 or 110-114.

USD/CAD
Weekly



-“USDCAD has pushed through the 2007 high at 1.1875, 61.8% extension of the 2007-2009 rally from the 2011 low at 1.1882, and several upward sloping parallels. The next cluster of technical levels is between 1.25 and 1.2730.”
-USDCAD nearly traded 1.28 on January 30th (the rate put in a top last year on the 31st) and has since retraced everything since 1/23. 1.2180 (38.2% of rally from November low) may provide important support for another rally attempt.

USD/CHF
Weekly




-Since banging off of a lower parallel (after SNB), USDCHF has rallied and is just pips from the median line of that structure. The line in question is just pips from the October 2014 low at .9352. Watch for resistance. A reaction targets .8820/30 as support. A move over the mentioned median line opens up .9530/50 (November and December 2014 lows).


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Talking Points

• Next couple of days key for the pound
• EUR/USD stuck between Gann levels
• S&P 500 closing in on important upside attraction

EUR/USD

• EUR/USD is in consolidation mode near the 3rd square root relationship of the year’s low
• Our near-term trend bias remains positive while above 1.1315
• Interim resistance is seen around 1.1445, but a move through 1.1515 is really required to signal that a more meaningful extension higher is underway
• An important turn window is eyed here
• A close below 1.1315 would turn us negative on the exchange rate

EUR/USD Strategy: Like holding reduced long positions while above 1.1315.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.1315	1.1360	1.1405	1.1445	1.1515

S&P 500

• S&P 500 traded to a new all-time high late last week
• Our near-term trend bias is positive while above 2064
• The 3rd square root relationship of the year’s low at 2108 is the next upside attraction with traction above needed to confirm that a new leg higher is underway
• A minor turn window is seen on Thursday
• A close below 2064 would turn us negative on the index

S&P 500 Strategy: Like the long side while 2064 holds

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
S&P 500	2064	2077	2094	2108	2124

GBP/USD


As we noted yesterday, this week is shaping up to be an important one for the euro from a near-term timing perspective as various cyclical relationships will be aligning over the next couple of days. The same can be said about GBP/USD as the exchange rate has similar influences these next few days. Our view is the same in the sense that if Cable is going to see a quick and orderly resumption of the downtrend then this is probably where it should happen. Continued strength in the pound into the latter part of this week through key resistance at 1.5440 would serve to undermine these negative cyclical influences and set the stage for a deeper correction higher over the next couple of weeks into the next important ‘turn window’ eyed around the first week of March.

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

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• Just a minor recovery or something more in Gold?
• USD/JPY rebounds off key Gann level
• AUD/USD consolidates below important resistance

USD/JPY

• USD/JPY remains in consolidation mode above the 3rd square root relationship of the 2014 high near 118.40
• Our near-term trend bias remains positive while above 118.40
• Interim resistance is seen around 119.65, but a move through 120.80 is really needed to signal that a more meaningful extension higher is underway
• A minor turn window is eyed early next week
• A close below 118.40 would turn us negative on the exchange rate

USD/JPY Strategy: Like the long side while 118.40 holds

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	117.95	118.40	118.85	119.00	119.65

AUD/USD

• AUD/USD remains in consolidation mode below the 3rd square root relationship of the year’s low at .7885
• Our near-term trend bias is negative while below .7885
• The year’s closing low around .7715 remains a key downside pivot with weakness below needed to signal a resumption of the broader trend
• A very minor turn window is seen tomorrow
• A close above .7885 would turn us positive on the Aussie

AUD/USD Strategy: Like the short side while below .7885

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
AUD/USD	.7715	.7740	.7790	.7840	.7885

GOLD



We are still waiting to see how the timing relationships we mentioned earlier this week are going to play out. The euro is starting to show signs of stalling out while Cable remains pretty bid. How we close the week out should help clear up the cyclical/technical picture and give us some directional clarity. Another market worth watching closely here is Gold. It has a similar cyclical set up as that of the European currencies and actually might be leading by a day or so. On Wednesday the metal found support where it needed to with a reversal occurring just a bit under 1200 dollars an ounce at a convergence of the 78.6% retracement of the year-to-date range and the 1x1 Gann angle line of the 2013 closing high. A move through 1236 is now needed to confirm that a more meaningful push higher is underway. Weakness below 1197 would invalidate the burgeoning positive cyclicality and re-focus lower.

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


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Talking Points:

• US Dollar Waiting for Direction Cues at Range Support
• S&P 500 Continues to Tread Water at New Record High
• Crude Oil Holds Support, Gold Digesting at 1200 Mark

US DOLLAR TECHNICAL ANALYSIS – Prices look to have reversed downward as expected after putting in a bearish Evening Star candlestick pattern. A daily close below the 14.6% Fibonacci retracementat 11740 exposes the 23.6% level at 11653. Alternatively, a turn above the 11854-76 zone (14.6% Fib expansion, March 2009 high) clears the way for a test of the 23.6% expansion at 11963.



S&P 500 TECHNICAL ANALYSIS – Prices appear poised to continue upward after setting another record high. A break above the 76.4% Fibonacci expansion at 2112.20 exposes the 100% level at 2134.10. Alternatively, a reversal below the 61.8% Fib at 2098.60 targets the 50% expansion at 2087.60.



GOLD TECHNICAL ANALYSIS – Prices challenging pivotal support at 1197.86, marked by the intersection of a channel floor, a rising trend line and the 61.8% Fibonacci retracement. A break below this barrier exposes the 76.4% level at 1171.96. Alternatively, a reversal above the 50% level at 1218.80 targets channel top resistance at 1227.65.



CRUDE OIL TECHNICAL ANALYSIS – Prices corrected lower after reversing upward as expected. A break back below the 38.2% Fibonacci retracement at 59.08 exposing the 23.6% level at 53.77. Alternatively, a break above the 50% Fib at 63.38 targets the 61.8% retracement at 67.68.




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


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EUR/USD

• EUR/USD remains in consolidation mode below 1.1500
• Declining volume during the recent rise suggests the advance is likely only corrective
• A lack of momentum in daily OBV also favors an eventual downside resolution
• A close above 1.1535 on above average volume will turn attention higher

USD/JPY

• USD/JPY has come under steady downside pressure over the past week
• The lack of volume during the recent push higher raises concerns that consolidation is not yet finished
• The persistent decline in daily OBV over past few weeks is also a warning sign that a deeper decline may be unfolding
• A close under 116.35 on above average volume would turn us negative on the exchange rate

GBP/USD

• GBP/USD traded at its highest level in almost two months earlier this week
• The lack of volume during the recent advance does suggest the recovery is likely only corrective
• A weakening daily OBV also suggests recent action is only corrective
• A daily close above 1.5500 on above average volume would turn us positive on Cable

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

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Talking Points:

• US Dollar Flat-Lining at Familiar Range Floor Support
• S&P 500 Consolidating Gains After Hitting Record High
• Crude Oil, Gold Price Action Stalls at Technical Barriers

US DOLLAR TECHNICAL ANALYSIS – Prices look to have reversed downward as expected after putting in a bearish Evening Star candlestick pattern. A daily close below the 14.6% Fibonacci retracementat 11740 exposes the 23.6% level at 11653. Alternatively, a turn above the 11854-76 zone (14.6% Fib expansion, March 2009 high) clears the way for a test of the 23.6% expansion at 11963.



S&P 500 TECHNICAL ANALYSIS – Prices paused to consolidate after establishing a new record high. A daily close above the 23.6% Fibonacci expansion at 2113.60 exposes the 38.2% level at 2131.30. Alternatively, a reversal below the 14.6% Fib at 2102.60 targets the February 20 low at 2084.90.



GOLD TECHNICAL ANALYSIS – Prices challenging pivotal support at 1197.86, the 61.8% Fibonacci retracement. A break below this barrier exposes channel floor support at 1176.34, followed by the 76.4% level at 1171.96. Alternatively, a reversal above 50% Fib at 1218.80 targets the 38.2% retracement at 1239.73.



CRUDE OIL TECHNICAL ANALYSIS – Prices are digesting gains below the $64/barrel figure after reversing upward as expected. A break above the 50% Fibonacci retracement at 63.38 on a daily closing basis exposes the 61.8% level at 67.68. Alternatively, a reversal below the 38.2% Fib at 59.08 targets the 23.6% retracement at 53.77.



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


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Talking Points:

• US Dollar Continues to Tread Water in a Narrow Range
• S&P 500 Resumes Upward Push, Sets New Record High
• Crude Oil in Digestion Mode, Gold Attempting Recovery

US DOLLAR TECHNICAL ANALYSIS – Prices are struggling to find follow-through after falling as expected having formed a bearish Evening Star candle pattern. Near-term support is at 11740, the 14.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 23.6% level at 11653. Alternatively, a reversal above the 11854-76 zone (14.6% Fib expansion, March 2009 high) opens the door for a challenge of the 23.6% expansion at 11963.



S&P 500 TECHNICAL ANALYSIS – Prices resumed their upward push after a brief period of consolidation, rising to set yet another record high. A daily close above the 38.2% Fibonacci expansion at 2131.30 exposes the 50% level at 2145.70. Alternatively, a reversal below the 23.6% Fib at 2113.60 targets the 14.6% expansion at 2102.60.



GOLD TECHNICAL ANALYSIS – Prices are attempting to launch a recovery from support at 1197.86, the 61.8% Fibonacci retracement. The reversal requires a push above a major resistance cluster in the 1209.67-18.80 area, marked by a falling channel top, the underside of a recently broken trend line and the 50% Fibonacci retracement. If a break does materialize, the next upside barrier comes in at 1239.73, the 38.2% level. Alternatively, a turn below 1197.86 aims for the intersection of channel floor support and the 76.4% Fib at 1171.96.



CRUDE OIL TECHNICAL ANALYSIS – Prices remain in digestion mode after an expected recovery found resistance below the $63/barrel figure. A break below the 58.17-78 area marked by the February 9 close and the 23.6% Fibonacci retracement exposes the 38.2% level at 56.18. Alternatively, a turn above the 14.6% Fib at 60.38 targets the February 17 high at 62.98.



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

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