Forex Strategies

NZD/USD 4H chart 6/13/2013 8:10AM EDT



Initial RBNZ reaction: NZD/USD initially had a bearish reaction after the RBNZ held its official cash rate at 2.50% and reiterated concerns of an overvalued kiwi. However, after cracking the 0.79 handle, NZD/USD pushed up, cracking the 0.80 handle. As we get into the 6/13 US session, it is trying to find a new high above the recent 0.8022 high. Note that the RSI held above 40 and is pushing above 60, showing bullish momentum is maintained and possibly continuing.
The next resistance pivot is at 0.81 up to 0.8117. Since the prevailing trend is bearish, I would respect these resistance levels at least in the intra-session time-frame.
A failure to push above 0.8025 shows the market still consolidating, with a possible double top, that would return the outlook to the bearish mode, especially if the RSI falls back below 40.


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Dow Jones :
Resistance(daily close) : 14855.63, 15021.70, 15159.38 and 15404.28. Breaking of the latter would give 15643.13, 15845.63, 16022.80

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The EUR/USD is about to close its fourth week in a row in positive territory, a quite impressive recovery partially supported by diminish hopes US FED will start tapering QE as soon as this summer. Stocks had been under pressure these weeks, with American indexes down along with dollar, and many experts are now looking for further falls in there, considering the steady surge from early year opening. So, what’s next for EUR/USD?The daily chart shows indicators starting to get exhausted in overbought territory, in no means suggesting the rally is over, but just consolidating: former highs around 1.3200/40 should now provide strong support in case of a downside correction, followed later by the 1.3150 price zone. Only steady losses below this last should made current upward momentum tumble and suggest the rally is done and is time to change bias.

On the other hand, the pair has been unable so far to overcome the 1.3400 area, strong static resistance as per several daily highs and lows around it from late 2012, early 2013. However, a break higher, mostly after indicators correct current conditions, should signal a continuation of current bullish trend, eyeing first 1.3500/20 area. Further advances however seem now limited as the EUR will become too expensive for ECB to remain calm.




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EUR/CHF 4H chart 6/14/2013 7:42AM ET



Falling channel: After setting a 2013-high so far at 1.2648, EUR/CHF fell to 1.2221 during the the 6/13 session. The 4H chart shows a market in a falling channel. The RSI in the 4H chart shows some bearish development, and as long as the reading is under 60, the bias remains bearish. The moving averages reflect a sideways market. In the 4H chart, the market is bearish only in regards to the falling channel but has an overall sideways mode.

200-day SMA: When looking at the daily chart, we can confirm that the market has a sideways mode, BUT has a bullish bias. Despite the strong May-June decline, EUR/CHF is still trading above the 200-day SMA, and the RSI is still above 40, reflecting maintenance of the bullish momentum established when the reading tagged 70.

Note that the last 4 times EUR/CHF tested the 200-day SMA, it has provided support, though the last time in April it let price massage it a little.

Targets: In the near-term, the current bounce off the 200-day SMA has a target/resistance at the 1.2385 pivot. A break above that opens up the 2013-high at 1.2648. Failure to hold above the 200-day SMA could re-open the 1.20 SNB floor for EUR/CHF.

EUR/CHF Daily chart 6/14/2013 7:48AM ET




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Chart in Focus: Daily USDJPY The USDJPY continued losing ground today and the market has now fallen lower for four straight days. If this downward momentum continues into next week, we could see the market move down into the support zone between 92.55 - 90.85 area. Clearly, near-term momentum / trend is down right now and we favor the short side at least early next week or until we get an obvious price action buy signal on the 4hr or daily charts from support.


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EURUSD: 1.3344
Short-Term Trend: uptrend
Outlook:

EUR has advanced since our last update and thus our bullish view here has been justified. Now, the trend on the daily chart remains higher but the main question is how far can this move up go. As I said last week, if the wave D of the suspected Diametric formation from July 2012 low bottommed in April, then the current upside potential is rather limited and a move abv 1.3520 would not occur. If however, wave D ended in May's low, then we could easiliy see a rally twd 1.3720 and possibly even to 1.4045. Right now I do not have a clear view which of these two scenarios is unfolding. But we can simply stick with the trend as long as it is intact. At this stage only a firm break below 1.3195 Fibonacci level will negate the bullish view, so I am bullish against this level.

Strategy: Holding long from 1.3015 is favored against 1.3175 . Target=to be determined later



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EURUSD: Bull Pressure Targets The 13400/50 Levels.

EURUSD - Further bullishness saw the pair extending its gains the past week and opening the door for more upside in the new week. While holding firmly above the 1.3242 level, additional strength is expected towards the 1.3400 level and then the 1.3450 level. A cut through here will expose the 1.3500 level. Its weekly RSI is bullish and pointing higher suggesting further upside. On the downside, support comes at the 3242 level where a reversal of roles as support is likely to occur and turn it higher. But if taken out expect more downside towards the 1.3150 level followed by the 1.3050 level and then the 1.3000 level. All in all, EUR continues to retain its medium term upside bias.
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USDCAD: Bear Pressure Remains On The Cards.

USDCAD - With s second week of decline seeing USDCAD weakening the past week and seen reversing its Friday recovery gains, further bearishness is expected in the new week. This will leave the pair targeting further downside towards the 1.0100/81 levels. Further down, support stands at the 1.0000 level and possibly lower towards the 0.9900 level. Conversely, USDCAD will have to break and hold above the 1.0250 and 1.0379 level to reverse its bearishness. This if seen will aim at the 1.0441 level where a violation will aim at the 1.0500 level. Further out, resistance resides at the 1.550 level. All in all, USDCAD looks vulnerable to the downside



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Chart in Focus: Daily EURUSD


The EURUSD consolidated today as the market continues to move sideways following the recent surge higher. Overall, momentum and near-term trend are up, but we could see a rotation back to support before the market continues pushing higher. If that happens, we will watch for price action buy signals from support to rejoin the upward momentum in this market. Key support is coming in down near 1.3240 - 1.3175 area and will watch for price action buy signals forming there if the market does rotate lower soon.



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USD/JPY Daily chart 7:45AM EDT 6/17/2013



Bearish trend, support: The USD/JPY found support at 93.75 last week. So far this week, price has failed to break down that support as price pulls back toward 95.00. The trend, and momentum in the 4H chart (below) is bearish, and there is still further downside toward a support cluster just below the 93.00 handle. The daily chart shows 38.2% retracement at 92.96 and a support pivot at 92.55. The daily RSI is tagging 30, showing bearish momentum, but at the same time hinting at near-term oversold condition.

Double Bottom? The failure to push through 93.75 last Friday and so far today hints at a possible double bottom development, but it will require a break above 95.80. Otherwise the pattern of lower highs continues with the downside risk toward 93 and the support factors below it. Above 95.80, the market, there is the threat of an immediate resistance around 96.00 and a falling powerline seen in the 4H chart. Otherwise, clearing that opens up the upper falling trendline. A double bottom projection would target 97.85, which is a very short-term scenario that’s within the overall bearish trend development.




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