Forex Strategies

EURUSD – USD weakness across the board resulted in EURUSD breaking the sequence of 4 negative daily performances yesterday. With the intraday chart now posting higher highs and lows, the bias turns to the upside. However, this could be short-lived with the previous high at 1.2929 ‘lining up’ with a 261.8% extension level (from 1.2795-1.2847). Risk/reward is just ample to call a buy this morning. We are looking to Buy at the 7am open with a stop at 1.2861. The profit targets are1.2916 and 1.2929. A break of this level is unlikely but the market should focus on 1.2942
The risk would be selling through a stop of 1.2861



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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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GBPJPY: Bullish, Broader Bias Remains Higher.

GBPJPY – With GBPJPY continuing to hold on to its broader upside, we look for it to strengthen further in the days ahead. This will leave it targeting the 157.00 level where a violation will aim at the 159.00 level and then the 163.05 level. Its daily RSI is bullish and pointing higher supporting this view. O the downside, in case of any pullback, the 150.54 level will be targeted where reversal of roles as support may occur. Further down, support comes I at the 149.94 level. All in all, the cross remains biased to the upside.


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EUR/USD continues to decline in line with the following trade alert that I received today for this pair. The price is set to fall to the target level 1.2837 (the hourly Key Support Level, of the type Approach, which was recently identified by Autochartist) in the next 13 hours. EUR/USD earlier bounced up from the support zone near the support level 1.2750 (which reversed the pair strongly up at the start of April). The upward correction from 1.2750 quickly lost its momentum – as it was against the predominant medium-term downtrend affecting the pair now. EUR/USD is set to reach the target level 1.2837 in 13 hours.

As can be seen from the Volatility Analysis chart for EUR/USD shown below, the lower border of the daily Expected Price Range calculated by Autochartist (1.2831) stands within a few pips’ of with the target level specified in the above trade opportunity alert (1.2837) – which heightens the likelihood EUR/USD will soon reach this target level.




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GBP/USD has formed a Channel Down pattern on the 1H chart. The pattern has 63% quality and 43% magnitude in the 73-bar period.
The pattern began on 16th of May when the pair peaked to 1.5322; at the moment it is trading at the 20-bar SMA at 1.5146. Trading volume seems to be decreasing in the length of the pattern. Technical indicators on aggregate point at appreciation of the pair on 1H horizon. Long traders could focus on the Bollinger band/daily pivot (PP) at 1.5172/79, daily pivot (R1)/pattern’s resistance/200-bar SMA at 1.5245/56, 100-day SMA/daily pivot (R2) at 1.5327/29 and 20-day SMA/daily pivot (R3) at 1.5373/95.
Technical indicators on aggregate point at depreciation of the pair on 4H and 1D horizons suggesting it should maintain the bearish trend. Short traders could focus on the Bollinger band at 1.5132, daily pivot (S1)/pattern’s support at 1.5095/91 and daily pivots at 1.5029 (S2) and 1.4945 (S3).

GBP/NZD 1H Chart

Emerging Pattern: Channel Down
Most of the time lately GBP/NZD has been trading in an up-trend, being underpinned by the 200-bar SMA. However, 55 hours ago the currency pair overextended the rally by deviating three and a half figures away from the rolling average, but subsequently returned to it, forming the channel down. A substantial majority (70%) of market participants believe the price will not breach the 200-bar SMA to the downside, but will start a recovery instead.

CHF/SGD 1H Chart

Emerging Pattern: Ascending Triangle
Although there are few reasons to believe that CHF/SGD will return within the boundaries of the pattern, the possibility exists. Moreover, the lines that are parts of the ascending triangle may still prove to be useful in determining further price action, which is likely to involve a sell-off with the nearest targets located at 1.2954, 1.2937 and 1.2888.

CAD/HKD 1H Chart

Emerging Pattern: Channel Down
Already 152 hours ago CAD/HKD closed beneath the 200-bar SMA and since then has been on the decline. Nevertheless, 73% of traders have entered long positions, believing that the falling resistance trend-line the pair is facing at the moment will not be able to suppress bulls. Such a strong positive sentiment is particularly interesting given that on average throughout their crosses both CAD and HKD are bought with the same frequency, in 27% of cases.




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Market Commentary

After trading strong for most part of the European session, the Dollar Index (DX) eventually closes weak to currently trade at 83.80 ranges; immediate resistance is observed at 84.50. The benchmark equity index of the Dow Jones Industrials Average (DJIA) continued to make new highs to currently trade at 15375; it seems the correlation between DJIA Vs DX is getting lesser significant, wherein historic inverse correlation is not observed since last couple of weeks with both the indices appreciating.
The benchmark equity index of the Dow Jones Industrials Average (DJIA) continued appreciating to make new highs; the major trend is still intact till DJIA manages to trade above 14860 ranges.
Historic correlation between DX Vs DJIA suggests the long term trend is still Dollar bearish till the Dollar Index is not closing above 88.40 on monthly basis though medium term trend is bullish till it manages to close above 83.40 ranges on daily basis.

Sideways-Up	1.2990	1.2955	1.2880	1.2840
Sideways	103.20	102.90	100.30	99.90
Sideways-Down	1.5225	1.5210	1.5110	1.5080
Sideways-Up	0.9770	0.9720	0.9660	0.9620
Sideways	134.90	133.90	130.60	130.00
Sideways	0.8960	0.9830	0.9730	0.9690

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Daily Forecast - 22 May 2013
Brent Crude July contract


Brent Crude held below 105.31 & hit profit taking as expected to hit our 103.85/75 target. As predicted this did hold the downside where we advised profit taking on shorts, but a break lower today should see 103.25 & possibly good support at 102.70/50. Exit shorts & try longs here with stops below 102.00.
If we push back above 103.85 we could try for resistance at 104.35 & a possible selling opportunity but shorts need stops above 104.60 for a retest of 105.30.

April High

Feb Low

Jan Low

March Low

Last Week’s High

November Low

Aug Low

Last Week’s Low

April low

Nymex WTI Light Crude June contract


WTI Crude hit profit taking as predicted hitting out target of 95.50 & in fact bottomed exactly here. We could continue lower today for good support at 94.50/40 & a buying opportunity with stops below the 100 day moving average at 93.95. Then look for 93.64 as the next support.
If we hold on to 95.50 we could crawl higher to try resistance at 96.45/60. We should struggle here but a push higher targets 97.00/17 for a selling opportunity. Stops above 97.35 for a run to April highs at 97.80 & another selling opportunity, but will need stops above this year’s high of 98.24.

January High

February High

April High

March High

Last week’s High

Feb Low

Last Week’s Low

March Low

April Low

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Till rupee does not break 56.10 against the US dollar in futures market, I am against going long. It remains to be seen whether a weaker US dollar will result in gains as RBI demand is still there. If the rupee weakens today some of the short positions might just squared off. Bank of Japan meeting will be the key. Some of the Federal Reserve officials saying that there will be a delay in withdrawing of quantitative easing should result in more gains for the Indian currency. Intra day volatility will rise trade carefully.*
Trading strategy For the very large traders and high risk traders

• USD/INR MAY 2013: Sell at 55.80-55.90 stop loss 56.17 for 55.2525-54.8975 or sell below 55.4225 stop loss 55.5775 for 55.3575-55.1675
• EURO/INR MAY 2013: Buy only if euro/inr trades over 71.32 for 71.52-71.72 stop loss 71.22
• GBP/INR MAY 2013: Watch 84.0300 and trade accordingly
• JPY/INR MAY 2013: watch 54.1000 and trade accordingly.*

TECHNICAL VIEW*

US-DOLLAR – INDIAN RUPEE (USD/INR) MAY 2013 – (CURRENT PRICE 55.4975)Bullish over 55.4000 with 55.6575 and 55.9100 as price targetBearish below 55.2000 with 54.9875 and 54.6975 as price targetNeutral Zone: 55.2000-55.4000

• 55.70-55.80 is the key resistance and only a break of 55.80 will result in more.*
• Key support is at 55.20 and there will be another wave of selling below 55.20 or failure to break 56.10 by Friday

EURO-INDIA RUPEE (EUR/INR) MAY 2013 – (CURRENT PRICE 71.2775)Bullish over 71.1000 with 71.4825 and 71.7125 as price targetBearish below 70.9825 with 70.8100-70.6100 as price targetNeutral Zone: 70.9825-71.1000

• A break of 71.36 will result in 71.57-71.87
• There will be sellers only if euro/inr trades below 71.10 in European session

UK POUND -INDIA RUPEE (GBP/INR) MAY 2013 – (CURRENT PRICE 84.0075)Bullish over 83.9025 with 84.3250 and 84.7575 as price targetBearish below 83.7725 with 83.5225 and 83.2025 as price targetNeutral Zone: 83.7225-83.9025

• Cable needs to trade over 84.00 today to target 84.33-84.70
• There will be another wave of selling only if cable trades below 83.95 after 1:45 pm IST (after UK opens)

JAPANESE YEN -INDIA RUPEE (JPY/INR) MAY 2013 – (CURRENT PRICE 54.0275)Bullish over 53.9100 with 54.2025 and 54.8075 as price targetBearish below 53.4925 with 53.2025 and 53.0725 as price targetNeutral Zone: 53.4925-53.9100

• Yen can rise to 54.22-54.75 as long as it trades over 53.45
• Watch 54.10 all the time

Happy profitable trading & Trade without emotions


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JPY crosses are moving higher this mooring after BoJ Kuroda highlighted that change in fx-rates will boost export volume, but not earlier than in 6-9 months. This means that there current policy has a positive impact on the economy that’s why we can see strong rally on Nikkei which is pushing the JPY down, or XXX/JPY to the upside.We are long EURJPY from 131.90 with members and so far pair is moving very nicely in our favour with possible extension to 133.80 in sessions ahead.

EURJPY 1h



EUR is also up against the USD today but pair is testing some important resistance around 1.2940/70. As you know our larger picture is bearish for the EURUSD, and if we consider only three wave rise from 1.2795 on the hourly chart then pair should be on our radar now as pair could turn bearish in the next few sessions. However, as always we need a confirming price action! Only an impulsive fall back to the lower side of a corrective channel will be bearish for the pair, and then we may look for short entries.

EURUSD 1h



GBPUSD is moving sharply lower for the last two days and has now extended its weakness after worse than expected Retail Sales numbers. Notice that technicals won again; market reversed perfectly from 1.5190 resistance from wave four high which was highlighted in our yesterdays intra-day updates for members. So if we are still on the right track with the count then pair is now in red wave v) down that could make an extended structure with more downside in view based on latest price action.

GBPUSD 1h



On Gold we still think that wave 4 is in progress, now with sub-wave (b) that could test 1354 level in the next two sessions, while 1401 is not breached.

GOLD 1h


For now, we will stick and track this EURJPY very closely, but will be flexible and turn bearish on the EUR again, but against the USD then and possible shorts if we see evidences of reversals! Grega


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Daily Forecast - 23 May 2013



Brent Crude has continued lower with the outlook remaining weak. If we hold below 102.00 we could test the next support at 101.35/20. We are getting very oversold in the short term so this could hold the low for the day. Watch for a bounce but keeps stops tight below 101.00 as a break lower risks a move to 100.26. Exit shorts & try longs here with stops below 99.80.
102.40/50 is now resistance & could hold a bounce but above here we could test trend line resistance at 103.13 coupled with moving average resistance just above at 103.40. Shorts here need stops above 103.85.

April High

Feb Low

Jan Low

March Low

Last Week’s High

November Low

Aug Low

Last Week’s Low

April low

Nymex WTI Light Crude July contract



WTI Crude did continue lower to the 94.50/40 target & a buying opportunity. We bounced nicely from here but have since broken lower to hit the next target of 93.64. The outlook remains weak so look now for a test of strong support at 92.80/75. We are however starting to look oversold in the short term so watch for a bounce. If attempting longs we need stops below the 200 day moving average at 92.30 & can then look for the next support at 91.60/40.
A bounce from 93.60 is possible and could reach resistance at 94.40/50. It could be worth trying shorts here with stops above 94.90. We could then test the next resistance at 95.50 for another selling opportunity.

January High

February High

April High

March High

Last week’s High

Feb Low

Last Week’s Low

March Low

April Low

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