Technical Analysis

AUD/USD - Australian dollar / US Dollar
Entry: 1.0055
Stop: 1.009
Resistances: 1.0205 - 1.016 - 1.01
Supports: 0.9965 - 0.9995 - 1.0045



EUR/AUD - Euro / Australian dollar
Entry: 1.2955
Stop: 1.2925
Resistances: 1.302 - 1.3 - 1.298
Supports: 1.2835 - 1.2875 - 1.2915



USD/JPY - US Dollar / Yen
Entry: 101
Stop: 100.7
Resistances: 102 - 101.55 - 101.2
Supports: 99.4 - 100.45 - 100.85



EUR/JPY - Euro / Yen
Entry: 131.6
Stop: 131.2
Resistances: 133.1 - 132.25 - 131.9
Supports: 130.45 - 130.8 - 131.5



EUR/USD - Euro / US Dollar
Resistances: 1.3115 - 1.3075 - 1.305
Supports: 1.2955 - 1.299 - 1.301



EUR/GBP - Euro / British Pound
Resistances: 0.849 - 0.8465 - 0.845
Supports: 0.8405 - 0.842 - 0.843



USD/CHF - US Dollar / Swiss Franc
Resistances: 0.9565 - 0.955 - 0.951
Supports: 0.938 - 0.942 - 0.9475



USD/CAD - US Dollar / Canadian Dollar
Resistances: 1.013 - 1.011 - 1.0095
Supports: 1.0015 - 1.004 - 1.006



EUR/CHF - Euro / Swiss Franc
Resistances: 1.245 - 1.241 - 1.2385
Supports: 1.2315 - 1.2335 - 1.2365



EUR/CAD - Euro / Canadian Dollar
Resistances: 1.324 - 1.3195 - 1.316
Supports: 1.308 - 1.31 - 1.3135



GBP/USD - British Pound / US Dollar
Resistances: 1.552 - 1.549 - 1.546
Supports: 1.529 - 1.5385 - 1.542



GBP/JPY - British Pound / Yen
Resistances: 157 - 156.6 - 156.3
Supports: 154.05 - 155.05 - 155.75




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S&P 500 Index: The S&P 500 rallies on upbeat earnings reports

U.S. equities traded green on Wednesday as Whole Foods Market Inc. and Electronic Arts Inc. posted forecast that topped the analyst estimates. The S&P 500 Index advanced 0.4% to 1,632.69. All but one industry group inched higher with basic materials climbing the most among all ten S&P 500 groups. Among the top performers was Electronic Arts Inc. with a 17% rally, as the video game maker forecasted adjusted income of $1.20 per share in the fiscal year ending March. That beat the average estimate of $1.10. Another market gainer was Whole Foods Market that jumped 10.1% to finish at $102.19 after the company’s profit surged to around $142 million from $118 million in the year 2012. DaVita Health Care Partners Inc. followed with a 10% advance to $129.37 on news Warren Buffett’s Berkshire Hathaway, a company known for aggressive takeovers, has started talks on increasing its stake in the health care providing company.
Dow Jones Industrial Average Index: Dow extends the winning streak

U.S. stock market was bullish on Wednesday, after the Dow Jones Industrial Average surpassed 15,000 points for the first time ever on upbeat earnings forecasts. The Dow Jones Index rallied 0.3%, or 48.92 points, to finish the trading session at 15,105.12. Consumer services was the only sector declining, as McDonald’s Corp plunged 1.3% to $100.95, as its store sales dropped 0.6% in April and growth slowed in Asia-Pacific region. Meanwhile, UnitedHealth Group Inc. jumped 3.3% to $62.51 for the biggest rise on Dow. Among technology shares, Hewlett-Packard Co posted the second biggest increase among all components in the index. The PC maker added 2.8% to $21.07, even though analysts at Topeka Capital Markets reaffirmed its “sell “ stock rating. Alcoa Inc. followed with a 2.7% gain dragging higher the basic materials group.
Nikkei Index: Nikkei snapps its winning streak on Thursday

Japanese shares dropped on Thursday, halting their winning streak earlier this week, amid appreciating Yen and technical indicators showed the marked. The Nikkei 225 Index erased as much as 0.7%, or 94.21 points, to finish the trading session at 14,191.48. Eight out of ten Nikkei industry groups posted losses, while telecommunications rallied as much as 4%. Tech shares also stayed in a positive territory, as Sharp Corporation jumped nearly 15 % to 423 yen. The TV maker climbed the most in four months, as on of the Tokyo newspapers said the company might seek for investments from the Asian biggest electronics maker, Samsung Electronics Co. NTT Data Corp. followed with a 10% increase, also pacing gains in technology group. Meanwhile, among industrials, Sumitomo Heavy Industries dropped 10.5% for the biggest decline on Nikkei, as the shipbuilder’s net income will increase to 14 billion yen, instead of the estimated 17 billion yen.
Hang Seng Index: Hang Seng drops on Chinese inflation data

Hong Kong shares plummeted, halting their winning streaks after data on Chinese inflation topped the estimates, while producer prices plunged in April. In addition, solar companies posted losses after a report on European tariffs was released. The Hang Seng Index declined as much as 0.1%, or 32.87 points, to finish at 23,211.48. Six out of ten industry groups in the Hang Seng edged lower with consumer services declining the most. Among the worst performers, China Resources, a partner of SABMiller supported by the government, that retreated 4.4% for the biggest drop on Hang Seng. Another market loser was HKEx as an increase in the number of employees and IT costs offset contributions from the London Metal Exchange that the company acquired recently. Want Want China slid 2.7% as its stock rating was cut to “underperform” Bank of America.
FTSE 100 Index: Footsie little changed on Thursday

U.K. shares were little changed on Thursday, after reaching their highest level since the year 2007 yesterday prior to the BOE announcing the final decision on monetary stimulus activities. The FTSE 100 Index dropped 0.08%, or 5.23 points, to 6,578.25 at 16:52 p.m. in London. Six out of ten industry groups inched lower with consumer services slipping the most. British Sky Broadcasting Group slumped 6.4% after announcing a share buyback. Among basic material shares, Eurasian Natural Resources Corp dropped 4.9% after the mining company said its first-quarter sales revenue was lower than the corresponding period in 2012 amid falling commodity prices. Another top loser was Standard Chartered Plc. that retreated 2.5% to trade at 1,584 pence, pacing losses in financial shares. Meanwhile, Experian Plc jumped 6.4% after the credit-checking company reported higher than expected earnings and increased its dividend.
DAX Index: DAX little changed amid national holiday

German stocks swung between gains and losses on Thursday, after the benchmark index extended trading at a record high level yesterday, as markets stayed open during a national holiday. The DAX Index rose 0.14%, or 11.85 points, to 8,261.56 close to the end of the trading session. Seven out of nine group industries edged higher with health care shares rallying 1%. Fresenius Medical Care AG was 2.5% up to trade at 54.29 euros, as the compny is strongly supported by a robust industry growth with a continuous increase in the number of patients. ThyssenKrupp AG climbed 1.8%, while the steelmaker still posts a 15% decline so far in 2013. Among industrials, Daimler AG gained 1.3% to 43.99 euros as it is currently in talks with Aston Martin on technical-cooperation that would enable reducing the spending on developing car models.
EXPLANATIONS

Indexes

• Standard & Poor's 500 Index (S&P 500) or (SPX) - U.S. stock market index consisting of the 500 large-cap shares widely traded on the New York Stock Exchange and the NASDAQ.
  
• Dow Jones Industrial Average Index (INDU) - U.S. stock market index consisting of the 30 large publicly owned U.S. companies , primarily industrials
  
• Hang Seng Index (HI) - Hong Kong’s stock market index consisting of 48 largest companies listed on the Hong Kong Exchange
  
• Japan’s Nikkei Stock Average (Nikkei 225 Index) or (NKY) - Japanese stock market index consisting of the 225 largest companies listed on Tokyo Stock Exchange
  
• FTSE 100 Index (UKX) - U.K. stock market index consisting of the 100 most capitalized U.K. companies trading on the London Stock Exchange
  
• DAX Index (DAX) - German stock market index consisting of the 30 largest and most liquid German companies trading on the Frankfurt Stock Exchange
  

Chart

• SMA (20) - Simple Moving Average of 20 periods;
  
• SMA (60) - Simple Moving Average of 60 periods.
  
• Correlation - a statistical measure of the linear relationship of two random variables. It is defined as the covariance divided by the standard deviation of two variables.
  

Indicators

• Industry performance - daily performance of industries within the particular stock market index
  
• Top performers - companies within the particular stock market index that showed best or worst daily performance
  
• Performance - relative historical change of stock market index value
  

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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, 1.2945-1.2960 on the downside.
  
• AUDUSD: 1.0225-1.0240 on the upside, 1.0020-1.0035 on the downside.
  
• USDJPY: 101.80-101.95 on the upside, 98.15-98.30 on the downside.
  
• GBPUSD: 1.5550-1.5565 on the upside, 1.5365-1.5380 on the downside.
  
• USDCAD: 1.0115-1.0130 on the upside, 1.0005-1.0020 on the downside.
  
• NZDUSD: 0.8495-0.8510 on the upside, 0.8300-0.8315 on the downside.
  
• EURJPY: 132.30-132.45 on the upside, 129.00-129.15 on the downside.
  
• EURGBP: 0.8495 -0.8510 on the upside, 0.8375-0.8390 on the downside.
  
• USDCHF: 0.9535-0.9550 on the upside, 0.9320-0.9335 on the downside.
  
• AUDJPY: 102.50-102.65 on the upside, 99.80-99.95 on the downside.
  
• EURAUD: 1.2990-1.3005 on the upside, 1.2775-1.2790 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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After the previous eventful week (Fed, ECB, NFP) this past week was rather calm. Published macro data from the U.S and China was positive, which decreased global risk aversion. This in turn, helped emerging market currencies regain some ground. In Poland, the MPC cut interest rates by 25 bp to 3.00%, which was surprising to some, including me. I was expecting rather the conservative MPC taking action in June, not in May. It seems though, the market has had discounted the May cut as the PLN reaction was really mild. Also, the market expects one more 25bp interest rate cut till the end of the year. Lower rates are already priced so we should not see any abrupt movements on the PLN even if the MPC decided to lower the cost of money again in June. Next week we will be closely following the CPI reading, which will show is inflation picked or still remains low. Low inflation, along with weak industrial and PMI reports will put pressure on Zloty although to see a large depreciation, the PLN will need to get a strong negative impulse from the U.S or Eurozone.

At the beginning of the week, the EUR/PLN tested the 4.1570 resistance level was denied further upward movement. The corrective movement brought it down to its two-week lows of 4.12, a strong support level. If this support is broken, there is a big chance the EUR/PLN will target April lows of 4.09. On the other hand, it seems there is a good chance for an upward move. The stochastic oscillator is showing the market is oversold and today’s candle is giving a strong bullish signal. In this scenario, the EUR/PLN should be testing 4.1570 again next week.



Recently economic news concerning Hungary were most often related to the excessive deficit procedure (EDP) and the possibilities for the current cabinet to get out of it. Last week Olli Rehn named five countries out of twenty as possible candidates to leave EDP among them Hungary, however extra unspecified measurements were required by the European Commission. As elections are already on the horizon (next year) the right wing Fidesz party led government prepared a rather quick resolution planaccording to PM Viktor Orban’s “in line with the government’s economic and social policies, and which are also acceptable to the European Union. On Friday, Economy Minister Mihály Varga announced a further deficit reduction pack that relies on a 92.9 billion forint expenditure cut. Markets reacted calmly as expectations were much worse, hence Forint managed to stay around 2 month lows against the euro despite recurring negative global risk appetite.


Pic.2 EUR/HUF D1 Chart

*Before the ring of the European closing bells forint still held a 1% weekly gain against USD and EUR despite of week end risk aversion. Technically a strong daily support level at the 291.40 EUR/HUF rate was touched on Wednesday and price stayed nearby support later on too. The closeness of the 200 daily moving average and the 50% fib level enforced EURHUF short traders to take some profit, hence further gains remained limited for the forint. For the next week a start of an upward correction is signaled by the daily doji candles with stops below 291.40 level.

Romanian Leu (EUR/RON) – Shying away from 4.30*

A small excursion below 4.30 had not been encouraging enough, after the seasonal pre-Easter flows dried up. S&P did not raise the country’s rating, a move that came as a disappointment to some who hoped for a return to investment grade. Yet macro data is reasonably RON-sustaining, with the trade balance falling by 182,4 mil. EUR to 567 mil. EUR in Q1 2013 – a better performance of exports and falling imports – added to stable inflation, at 5,29% y/y in April. The National Bank said on May 2 nd, when it kept rates on hold but reduced the interest rate corridor (effectively increasing the deposit rate) that it is likely to embark on an accomodative cycle. It thus plans to support the economy, as inflation is projected to move lower, towards the targeted range. This may also provide less support for RON in the months ahead. The next week may bring more of the same kind of soul-searching for the RON bulls described as a range, while an increase in risk aversion could put upward pressure on EURRON.
In the technical perspective, EUR/RON is on its way to breaking the downtrend on its Friday close, with an initial resistance at 4.3260. If this level is cleared on the current move, a push toward 4.3557, previous low stressed by the 41.4% retracement may become the strongest level to watch. Further resistance is to be found at 4.3905. A retest of the trendline could mean a revisit of 4.3079. Below the recent lows, 4.2849, 61.8% retracement of a long-term rise in the pair stands in the way of the bears just before 4.2563.


Pic.3 EUR/RON D1 Chart


Pic.4 EUR/RON W1 Chart


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EURUSD breaks below 1.2955 support, suggesting that the upward movement from 1.2747 had completed at 1.3242 already. Deeper decline to test 1.2747 support would likely be seen next week,as long as this level holds, the fall from 1.3242 could be treated as correction of the uptrend from 1.2747, another rise towards 1.3500 is still possible after correction, and a break above 1.3242 could signal resumption of the uptrend. On the downside, a breakdown below 1.2747 support will indicate that the downtrend from 1.3711 has resumed, then the target would be at 1.2400 area.For long term analysis, EURUSD is in uptrend from 1.2042 (Jul 24, 2012 low), another rise towards 1.4500 could be expected after consolidation.




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EURUSD

What Forex Target Traders See: We are currently sitting @ 1.2985 and have broken the wedge to the downside. Officially we are now bearish. The break of the 1.2985 support lends credence to a continuation to the S5 @ 1.2868 and a break there would target the day chart bottom @ 1.2738The average (14 day) daily true range (ATR) for the pair currently is 113 pips.



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USDJPY

What Forex Target Traders See: We are currently @ 101.59 and in a rising wedge on the hourly. Should see a correction first to the 100.00 before resuming the move to the R6 resistance @ 103.11. The average (14 day) daily true range (ATR) for the pair currently is 120 pips.



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GBPUSD

What Forex Target Traders See: Cable is currently @ 1.5359 and has been Broken the Day chart trend line to the downside. Look to the short side first to the S5 @ 1.5230 and then continuation to 1.5100. The average (14 day) daily true range (ATR) for the pair currently is 110 pips.



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AUDUSD – A great smooth currency for Newbie’s!

What Forex Target Traders See: Aussie is currently @ 1.0012 after a very convincing break to the downside. Expecting a pullback to the upside to finish off wave 4 ( 1.0081) and then another thrust down to the Frist Wave S6 target @ 0.9899 and then to the 0.9765 area. The average (14 day) daily true range (ATR) for the pair currently is 76 pips.




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EUR/GBP - Euro / British Pound
Entry: 0.845
Stop: 0.8465
Resistances: 0.8535 - 0.849 - 0.846
Supports: 0.838 - 0.8405 - 0.843



AUD/USD - Australian dollar / US Dollar
Entry: 0.998
Stop: 1.002
Resistances: 1.016 - 1.0095 - 1.0015
Supports: 0.983 - 0.99 - 0.9965



USD/JPY - US Dollar / Yen
Entry: 101.65
Stop: 101.4
Resistances: 102.5 - 102.15 - 101.75
Supports: 100.55 - 101.15 - 101.5



GBP/JPY - British Pound / Yen
Entry: 156.15
Stop: 155.85
Resistances: 157.75 - 157.2 - 156.55
Supports: 155.1 - 155.7 - 156



EUR/USD - Euro / US Dollar
Resistances: 1.305 - 1.302 - 1.299
Supports: 1.29 - 1.2935 - 1.296



USD/CHF - US Dollar / Swiss Franc
Resistances: 0.964 - 0.963 - 0.9595
Supports: 0.9475 - 0.954 - 0.9565



USD/CAD - US Dollar / Canadian Dollar
Resistances: 1.0175 - 1.0155 - 1.0135
Supports: 1.0065 - 1.0085 - 1.0115



EUR/CHF - Euro / Swiss Franc
Resistances: 1.2475 - 1.246 - 1.2445
Supports: 1.236 - 1.239 - 1.242



EUR/AUD - Euro / Australian dollar
Resistances: 1.3115 - 1.3065 - 1.302
Supports: 1.291 - 1.294 - 1.2965



EUR/CAD - Euro / Canadian Dollar
Resistances: 1.324 - 1.3185 - 1.316
Supports: 1.302 - 1.308 - 1.313



GBP/USD - British Pound / US Dollar
Resistances: 1.546 - 1.5415 - 1.537
Supports: 1.523 - 1.5315 - 1.5335



EUR/JPY - Euro / Yen
Resistances: 132.8 - 132.45 - 132.25
Supports: 130.75 - 131.6 - 131.9




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

• EURUSD: 1.3040-1.3055 on the upside, 1.2895-1.2910 on the downside.
  
• AUDUSD: 1.0185-1.0200 on the upside, 0.9930-0.9945 on the downside.
  
• USDJPY: 102.40-102.55 on the upside, 100.65-100.80 on the downside.
  
• GBPUSD: 1.5430-1.54455 on the upside, 1.5265-1.5280 on the downside.
  
• USDCAD: 1.0165-1.0180 on the upside, 1.0045-1.0060 on the downside.
  
• NZDUSD: 0.8375-0.8390 on the upside, 0.8235-0.8250 on the downside.
  
• EURJPY: 132.40-132.55 on the upside, 130.10-130.25 on the downside.
  
• EURGBP: 0.8475 -0.8490 on the upside, 0.8375-0.8390 on the downside.
  
• USDCHF: 0.9625-0.9640 on the upside, 0.9390-0.9405 on the downside.
  
• AUDJPY: 102.40-102.55 on the upside, 100.50-100.65 on the downside.
  
• EURAUD: 1.3080-1.3095 on the upside, 1.2775-1.2790 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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TRADER INSIGHT

Want Aspen's recommendations for well-composed trading ideas? Request your free trial!
Did You Take These 3 Simple Steps Before Your Last Trade?Learning to trade can be one of the most rewarding, and at times frustrating, experiences.* The lure of trading for a living remains the #1 reason individuals pursue the markets.
However, without a plan, the odds of success are near zero.* But many traders ask:
*** What is the plan?
*** How do I develop a plan?
Your journey to become a profitable trader does not need to be overly complex initially, but it does need to be practical.
Here are 3 simple steps to develop YOUR trading plan that will also keep you on the right side of the market:
Trade in the direction of the trend
Determine which time frame you are trading on (15-min, 60-min, daily) then use tools such as ADX, trend-lines or Aspen's Top 5 to align your trades with that trend
Use a simple stochastic indicator to prevent you from buying tops and selling bottoms
Stochastics won't show you when and where to enter the market, but they will ABSOLUTELY tell you when not to enter the market
Target Fibonacci levels to establish positions
Once you know the trend of the market, using minor sell-off and rallies (i.e. corrections) to get long/short is a lower risk way to get exposure.* Key Fibonacci ratios like .382, .500 and .618 are simple enough to determine.
While these may sound too simplistic - they are not.* They are the building blocks of successful trading and will be refined and enhanced over time.* Trust me, these 3 simple steps will provide a very robust framework from which to operate and grow.



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