The euro slipped as low as $1.2987 before steadying at $1.3005. On Monday, it had jumped more than 1 percent to a high of $1.3053 on the EBS trading platform as hopes of an eventual Greek deal drove a wave of short-covering.
EUR/CHF Forecast Technical Analysis
The EUR/CHF pair fell on Friday as traders continue to press their luck with the Swiss National Bank. The SNB has recently put in a “floor” to this pair at 1.20, and we believe them. In fact, members of the SNB were quoted during the Friday session as saying the level would “have to be defended”. With this in mind, only the foolish and reckless are selling at this point. We are not going to be one of them. However, the buying of this pair might be a bit difficult as well, as there are no real signs of life. If we get a run towards 1.20, we would be interested in buying on any sign of support.
AUD/USD Forecast Technical Analysis
The AUD/USD pair rose on Friday and even broke above the 1.04 level that we have been watching for a couple of weeks. The reason this area is so interesting is that the level is the top of a massive triangle that formed over the last month and a half in this market. The breakout is significant as it shows a real break of resistance in this market.
The triangle from the top to the bottom measures 800 pips, and as a result the projected move up now that we have broken out of this triangle would match that. The breakout point being 1.04 has this pair running towards the 1.12 level, which would be a new high in this pair.
The area saw a lot of consolidation over the last couple of sessions, and this shows a real building of pressure in the markets over the last week. The 1.07 level would be considered to be pressure to the downside, and the resistance could cause a bit of a pullback. Knowing this ahead of time however allows us to be prepared to deal with it going forward.
The breaking of the Friday range would be the “all clear” signal to buy, and we would expect the 1.04 area to act as support at that point in time. In fact, if we close on the daily chart below it – we would be concerned. But as long as we are above it, there is no reason to sell currently.
The Aussies will get a boost by the potential easing of credit and liquidity in China as they are the favorite “general store” of the Chinese. The boom that could be coming in commodities could certainly continue to push the value of the Aussie dollar higher for much longer than many people expect. Gold looks like it is ready to break out as well, and this will often be followed by the AUD/USD pair too. We are buying a break of the Friday highs, and won’t sell until we close well below the 1.04 level.
USD/CAD Forecast Technical Analysis
The USD/CAD pair rose on Friday as the 200 day EMA held as support, along with the bottom of the triangle. The oil markets fell, and this is always bad for the Loonie given enough time. However, later in the day we saw selling of the US dollar in general, and that came to this pair as well.
The close saw a shooting star, and it looks like this pair wants to fall at this point. However, the 1.01 level just below is the start of a massive support zone, so the fall will be a tough one. Because of this, we won’t sell this pair right now until we get below the 0.99 mark. However, buying doesn’t look all that enticing either. We are staying flat in this market.
NZD/USD Forecast Technical Analysis
The NZD/USD pair rose on Friday and formed a bullish hammer just above the 0.80 level. This is a bullish sign, and a break of the top of the range could be used as a buy signal. The 0.80 level should be a “line in the sand” going forward, and the level can be thought of as a backstop for any longs that you get involved in. The bullish case comes into play as long as we stay above this mark. If we break below the level on the daily close, we could see this pair fall down to the 0.78 level.
EUR/GBP Forecast Technical Analysis
The EUR/GBP pair fell hard on Friday as traders bought the Pound hand over fist against many currencies. The pair is in a downtrend, and this latest move only served to punctuate this. The 0.84 level looks very formative now, and we think this will be serious resistance going forward. We are more than comfortable selling on a break of the lows for Friday, or even on a bounce as long as we are sub-0.84. We are not buyi8ng at this point in time as the trend is so strong to the sell side.
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