Forex Strategies

EUR/USD has formed a Channel Up pattern on the 1H chart. The pattern has 41% quality and 50% magnitude in the 113-bar period.

The pattern began on 16th of May when the pair peaked to 1.2930; at the moment it is trading at 1.2939. Trading volume seems to be holding in the same level in the length of the pattern. Technical indicators on aggregate point at further appreciation of the pair on 1H horizon. Long traders could focus on the Bollinger band at 1.2949, 20-day SMA/daily pivot (R1) at 1.2974/79, pattern’s resistance/daily pivot (R2) at 1.3035/36 and 1.3069/115 area (100 and 200 day SMAs and daily pivot (R3).
Technical indicators on aggregate point at depreciation of the pair on 1D horizon. Short traders could focus on the 20-bar SMA at 1.2925, daily pivot (PP)/Bollinger band/200-bar SMA at 1.2900/892, daily pivot (S1) /pattern’s support at 1.2844/31 and daily pivots at 1.2765 (S2) and 1.2709 (S3).



NZD/USD 1H Chart

Emerging Pattern: Channel Down

The most recent price action (last 128 bars) suggests NZD/USD is going to decline further, down to 0.8011. The pair formed a channel down and has just bounced off the down-trend resistance line at 0.8176, meaning it is likely to complete the bearish wave by touching the lower boundary of the pattern—a scenario supported by technical indicators, although traders’ sentiment is neutral towards NZD/USD.



EUR/SGD 1H Chart

Emerging Pattern: Channel Up

After gaining a foothold above the 200-day SMA the currency pair recommenced a recovery, forming an upward-sloping trading corridor, even though technical studies are neutral. Still, most (71%) of market participants consider EUR/SGD being capable of reaching new highs while being underpinned by the support at 1.6327.



USD/TRY 1H Chart

Emerging Pattern: Channel Up

USD/TRY has been trading within the bullish channel throughout the last 273 hours, meaning that the U.S. Dollar is more probable to appreciate relatively to the Turkish Lira than to lose value, this is also implied by 4H and 1D indicators. Nonetheless, only one out of four traders believe this will be the actual scenario, having entered the market with buy traders.




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Market Commentary

Speculation that the Fed may reduce bond purchases led to the US Dollar gaining across the board resulted in most of the asset classes succumbing to selling pressure nevertheless the Dollar Index (DX) again finds resistance at 84.50 ranges. The benchmark equity index of the Dow Jones Industrials Average (DJIA) seems to be over stretched 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 the long term trend is still Dollar bearish till the Dollar Index is not closing above 88.40 with 84.50 ranges acting as intermediate resistance.

Sideways	1.3	1.2955	1.288	1.282
Sideways-Down	103.2	102.5	100.6	99.8
Sideways	1.518	1.514	1.503	1.5
Sideways-Down	0.976	0.972	0.966	0.952
Sideways-Down	132.6	132.1	130.6	129.2
Sideways-Down	0.978	0.971	0.96	0.958

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As you can see from the following trade alert for AUD/USD, this pair recently turned up from the lower trendline of the hourly Down Channel chart pattern identified by Autochartist. Expect the pair to rise to the target level 0.9826 in 2 trading days. The stop level for this alert is set at 0.9593 (point A, which is the bottom of this chart pattern). This point was formed earlier when AUD/USD reversed sharply up from the support area embracing the major support level 0.9600 coinciding with the 50% Fibonacci Correction of the previous weekly upward price thrust from May of 2010. The pair is expected to break this Down Channel and to reach the target level 0.9826 in 2 days.



The weekly AUD/USD chart below highlights the aforementioned support levels:




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Daily Forecast - 24 May 2013

Brent Crude July contract



Brent Crude broke support at 101.35/20 but being very oversold in the short term we bounced ahead of our buying opportunity at 100.26 & recovered to 102.40/50 resistance. This has held the bounce as expected but the outlook is more positive today so a push above here looks likely for a test of moving averages at 103.40 & Fibonacci resistance just above at 103.80. Exit longs & try shorts with stops above 104.10.
Failure to hold 102.50 sees a drift back to 101.85/55. Exit shorts & try longs here with stops below 101.20. We then look for a test of yesterday’s low at 100.64 & a bounce from here.

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 hit our target & support at 92.80/75 & although we tested the 200 day moving average at 92.30 we just held on to allow longs to be held for the expected bounce. We then reached resistance at 94.40/50 where we advised to try shorts & this was the exact high.
Today the outlook is a little more positive so be ready with stops on any shorts above 94.90. We should then test the next resistance at 95.50 for another selling opportunity with stops above 96.00. A break higher could take us as far as 97.00/17 May highs.
Failure to break 94.50 targets 93.65 & a bounce possible but below here look for 92.85/75 support & a potential low for the day. Try longs but be ready to add down to the 200 day moving average at 92.30 with stops below 92.00. We then look for the next support at 91.60/40.

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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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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Chart in Focus: Daily Crude Oil Chart

Crude Oil tried to move lower today but found support near $92.00 and rejected that level to form a bullish pin bar into the daily close. If the market remains strong above $92.00 we could see it push higher from here and re-test resistance up near $97.00. Note that the pin bar signal from today rejected the same support / event area as the previous pin bar that formed on May 15th.

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GBP/USD 1H chart 5/24/2013 8:10AM EDT



Falling Channel: GBP/USD has been trading in a falling channel since retreating from 1.56 at the beginning of May. This channel anchored below a rising channel and price has fallen to a previous pivot around 1.5025. This is below 61.8% retracement of the previously broken rising channel. As we get into the last session of this week, GBP/USD has rallied above 1.51 to about 1.5125, held there so far as the relief rally is challenged by the falling channel resistance.

A break above 1.5150 should clear the channel resistance and suggest some short-term correction.
Respect of the channel and a fall below 1.5060 could refocus the market to the downside. Downside risk still remains toward 1.50. Below 1.50 we are looking at the 1.4830, 2013-low


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The GBP/USD continues to be capped by the 1.5130 Fibonacci level, although a general dollar negative sentiment maintains the pair above 1.5100 and with a positive tone this Friday, as price stands above its 20 SMA, while indicators head higher still below their midlines. The upward corrective movement can extend once price firms up above mentioned resistance, requiring at least a 1 hour candle opening above it to confirm more gains, towards 1.5160/80 price zone.The intraday bullish tone will persists as long as price stands above 1.5050, immediate support as once below this last there’s scope for a test of 1.4990, next Fibonacci support.



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Last week update, purely focus on a technical perspective, showed how dangerously close the EUR/USD was to the neckline of a big H&S pattern in the daily chart. However, price was not even close to test the base of the figure, around 1.2740/50, and found buyers on dips toward 1.2800/20 price zone for most of the day.The FED did not actually bring anything new to the table, saying that they will tapper QE when the economic situation improves, something we all already knew. But it was how market read the news, and not what was actually said what moves the market. Stocks had been under pressure ever since the Minutes, after posting record highs almost daily basis during May: investors are not so confident now on ad eternum QE, and therefore, dollar buyers are back to fight.

The EUR is one of the few majors that points to close the week positive against the greenback, with the EUR/USD daily chart showing sellers around 1.3000, 20 SMA in the mentioned time frame, and indicators trying to correct higher, still in negative territory. Further recoveries need to push price above 1.3040 area and with a weekly close above it, chances turn to the upside next week, towards 1.3200 price zone, top of its recent range.

The figure is not yet discarded, but is now on hold: as long as price stays above 1.2744, yearly low, there’s not enough technical signs of a bearish continuation, while a break below this last will likely trigger a stronger bearish rally, eyeing then 1.2660, November 2012 low, ahead of 1.2430/60 price zone.



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AUDUSD: Bearish, Weakens.

AUDUSD - With AUDUSD seen reversing its recovery attempts on Thursday, there is risk of further downside. Support comes in at the 0.9592 level where a break will target the 0.9500 level. Other supports are located at the 0.9450 level and the 0.9400 level. Its daily RSI is bearish and pointing lower supporting this view. On the upside, immediate resistance resides at the 0.9700 level followed by the 0.9800 level and then the 0.9851 level. Further out, resistance resides at the 0.9900. All in all, the pair remains biased to the downside medium term.


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