Free webinar on ForexPros - How Measuring "Currency Strength" can Reveal the True Sentiment of the Market
Expert: Kris Matthews
When: Thu, Aug 26, 2010, 07:00 ET
In Part 2 of a four part series on trading sentiment, Kris Matthews reveals
how to rank currencies individually from strongest to weakest and pick
currency pairs where money is flowing most directly to ride trends that are
most likely to be profitable.
The Euro traded violently yesterday, breaking both the support & resistance we specified in yesterdays report without reaching any of the targets in both cases. These nervous moves are definitely a cause of frustration for us, we hope for an end of such price activity soon, since they mean nothing technically. Looking at the daily chart, we can see signs of a reversal, on top of which is the (Inverted Hammer) pattern, which appears twice. Last week, we suggested a wave count with 5 complete waves up from 1.1875. And as we reach Fibonacci 50% for this massive move at 1.2604, we should not neglect the possibility that the correction might me over after reaching such an important target. And with the inverted hammer patter, the possibilities that the drop from 1.3332 is over, have became higher. Short term support is at 1.2667, and we believe a break here will indicate that the drop is far from over, and that the Euro will sink below Tuesdays low. In this case the suggested targets will be the same as yesterday: 1.2550 first, then the all important 1.2432. On the other hand, yesterdays trading proved the importance 1.2724, and this will be our resistance of the day. If broken, the Euro will jump to important Fibonacci levels at 1.2871 & 1.2959.
Support:
1.2667: the rising trend line from Tuesday low on the hourly chart.
1.2550: the support area containing Jul 7th & 12th lows.
1.2432: Fibonacci 61.8% for the whole rise from 1.1875 to 1.3332.
Resistance:
1.2724: Fibonacci 38.2% for the drop from 1.2920.
1.2871: Fibonacci 38.2% level for the drop from the 3-month high of 1.3332.
1.2959: Fibonacci 50% level for the drop from the 3-month high of 1.3332.
---
USD/JPY
The Dollar jumped more than 120 pips from its 15-year low which it hit on Tuesday at 83.58, reflecting a fear of what the BoJ might do! In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, which we expected, from the very beginning, that it will dive below 84.81. Lets leave the daily & weekly charts we have been obsessed with lately, and just focus on the hourly chart. We can see that there is a very exciting trend line, dropping from June 4th top. This line is running currently at 85.28. Therefore, all of our attention is at the exciting trend line & the importance it provides. As long as we are trading below this line, the downtrend will be ok, but if we break the resistance 85.28 we will shoot up targeting 86.81 and may be 87.70. The support is provided by 84.07. If broken, there will be nothing stopping the price from reaching our awaited target 82.65, except for the BoJ. And if the Japs keep quiet, we could see 79.75 later, may be next month.
Support:
84.07: Fibonacci 61.8% for the rise from Tuesdays low, and 15-year low 83.58.
82.65: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.
79.75: this pairs historical low.
Resistance:
85.28: the falling trend line from June 4th top on the hourly chart.
86.81: Jul 26th & 27th low.
87.70: June 26th top.
---
GBPUSD
At an early hour this morning, the Pound broke the resistance specified in yesterdays report 1.5522, breaking with it the falling trend line from this years high. Earlier, the pair broke the rising beautiful trend line from June 8th bottom, breaking with it the short term rising trend. Todays jump has brought things back to complete chaos, since it was a move-up after breaking a 2.5 month old rising trend line! This may indicate that the Pound is on the way to retest that line at the very important 1.5757. Short term resistance is at 1.5600, if broken, the price will start rising with the objective of testing a very important level: 1.5757. If this resistance is broken, the short term uptrend & medium term uptrend will be revived, with a first target at 1.5860. On the other hand, support is at 1.5542, and breaking it would give the Dollar a chance to make the Pound pay back the losses of the Asian session. Targets will be 1.5461 & 1.5320.
Support:
1.5542: important intraday level.
1.5461: Aug 20th low.
1.5320: Fibonacci 38.2% for the massive move up from 1.4227 to 1.5996.
Resistance:
1.5600: the falling trend line from Aug 16th top.
1.5757: Fibonacci 61.8% for the drop from Aug 6th major top.
1.5860: a very exciting resistance appearing on the hourly chart.
---
Forextrading analysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - Trading the Harmonic Patterns LIVE
Expert: Chriss Hall
When: Thu, Aug 30, 2010, 08:00 ET
Chris will also be taking a live look at the markets where he will identify trades with you, help you setup your plan surrounding the harmonic patterns and execute any trades that look advantageous.
The Euro reached a new weekly high on Friday at 1.2777, before retreating around 50 pips by the closing time. With this, the Euro continues to rise slowly, without being able to create a reaction that can be compared to the massive drop from 1.3332. This slow upside activity is actually a sign of weakness, and the rise look pretty corrective. And unless the Euro moves clearly up today, things will become hard for the single currency, and this will leave room for the Dollar to take over. Short term most important support is provided by the rising trend line from last weeks low, which is currently at 1.2675. If broken, the Euro will start to lose ground, and will probably drop hard to 1.2550, and may be at a later time to the all important 1.2432. The most important resistance for the short term is at 1.2792, and if broken we will (finally) see the Euro creating a correction that can be tied in ratio to the enormous drop from 1.3332. This corrections ideal targets start at 1.2871, then 1.2959. While the ultimate target is at 1.3047. Excitement is coming, but we need a break first.
Support:
1.2675: the rising trend line from Aug 24th low on hourly chart.
1.2550: the support area containing Jul 7th & 12th lows.
1.2432: Fibonacci 61.8% for the whole rise from 1.1875 to 1.3332.
Resistance:
1.2792: Fibonacci 61.8% for the drop from 1.2920.
1.2871: Fibonacci 38.2% level for the drop from the 4-month high of 1.3332.
1.2959: Fibonacci 50% level for the drop from the 4-month high of 1.3332.
---
USD/JPY
The Dollar/Yen has tested (and surpassed) the falling trend line from Jun 4th top, which we talked about in Fridays report, and said that it is at 85.28. Then it closed very close to it at 85.21. Although it came close to the 86 level after this weeks open, reaching a 9-day high, it came back down in the midst of the disappointment of the BoJ this morning. If we break this line decisively, the downtrend which started on June 4th will be over, and the Dollar will be ready to takeoff. The verbal intervention last week may and may not be the reason for this 200+ pips bounce after reaching a 15-year low, but technically breaking this line means a lot regardless of the Japanese authorities position. Resistance is at Fridays top 85.43, and if broken we expect the Dollar to soar targeting 86.81 & may be 87.70. And in order to keep the chances of sustained break of this curtail trend line, we need to hold above the rising trend line from Tuesdays bottom which is currently at 84.77. But, if this level gives way, then what we have seen so far of the Dollars fireworks is everything it has! And this jump from Tuesdays 15-year low will be nothing but a correction. The price will continue falling, targeting 83.56 first, then our long awaited target 82.50.
Support:
84.77: the rising trend line from last Tuesdays low on hourly chart.
83.58: the 15-year low reached on Tuesday.
82.50: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.
Resistance:
85.43: Fridays top which is just above the falling trend line from June 4th top on the hourly chart.
86.81: Jul 26th & 27th low.
87.70: June 26th top.
---
GBPUSD
The Pound dropped modestly on Friday, reaching 1.5441 before consolidating, and closing, above 1.55. Although the bounce we have seen from last weeks low is still small relatively to the drop if followed, and although this bounce did not make it to the first Fibonacci retracement level of 38.2%, we believe that it has a chance as long as it holds above 1.5441. The Pound is required to hold above this level, and then shoot up to test the resistance 1.5587. We do not recommend taking sides before the price leaves this neutral zone we see between 1.5441 & 1.5587. Therefore, today will be very significant for determining the next phases direction. And we will be before two scenarios: first, a break of 1.5441, in this case the rise from 1.5370 will be purely a correction. And if we fall below this support, it will be completely logical to expect a heavy dive targeting 1.5320 & 1.5238. The second scenario is holding above 1.5441, and then attacking 1.5587. If we succeed in breaking it, we will be already on the way to the most important resistance for the time being 1.5757. And if this one is also broken 1.5860 will be just an initial and modest target on the way up.
Support:
1.5441: the rising trend line from last weeks low.
1.5320: Fibonacci 38.2% for the massive move up from 1.4227 to 1.5996.
1.5238: Jul 8th high.
Resistance:
1.5587: the falling trend line from Aug 16th top.
1.5757: Fibonacci 61.8% for the drop from Aug 6th major top.
1.5860: a very exciting resistance appearing on the hourly chart.
---
Forextrading analysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Watch Price Reaction to News Releases to Determine a Currency Pairs Sentiment/Direction
Expert: Chriss Hall
When: Thu, Sep 2, 2010, 07:00 ET
In Part 3 of a four part series on trading sentiment, Kris Matthews reveals how to use the power of economic news releases to indicate the markets true sentiment. Most traders avoid the news because its volatile, or only believe it has a short term effect, but the way price reacts technically to surprises in news events can give you information beyond whats on the chart alone and allow you to avoid deadly traps.
Yesterdays headline for the EURUSD was Slowly rising, signaling weakness, and the Euro listened, and kept on falling from the weekly open, losing more than 130 pips from its Asian session high. And with this drop, the pair broke our support 1.2675 and dropped more than 40 pips below it so far. This break, even though did not have immediate results, will destroy the Euro on the short term, and probably harm it on the medium term as well. The reason we believe so is that, this break in specific is the single most important technical factor in classifying the rise from 1.2586 as purely corrective. Therefore, we expect the pair to lose ground, and start to drop with targets below last Tuesdays bottom. Short term support is at 1.2643, and once it is broken we will target the same targets suggested yesterday: 1.2550 first then the all important 1.2432, which is critical for the medium term outlook. On the other hand, the resistance is at 1.2721, and breaking it would reverse the affect of the channel break. This is highly unexpected, but if it happens, the Euro will reject our negative outlook and target important Fibonacci levels at 1.2792 & 1.2871.
Support:
1.2643: important intraday level.
1.2550: the support area containing Jul 7th & 12th lows.
1.2432: Fibonacci 61.8% for the whole rise from 1.1875 to 1.3332.
Resistance:
1.2721: Fibonacci 61.8% for the drop from Fridays top.
1.2792: Fibonacci 61.8% for the drop from 1.2920.
1.2871: Fibonacci 38.2% level for the drop from the 4-month high of 1.3332.
---
USD/JPY
Although it came close to the 86 level after this weeks open, reaching a 9-day high, Dollar/Yen came back down in the midst of the disappointment of the BoJ yesterday. The Yen is back in the drivers seat, and it will drive this pair lower again. The support specified in yesterdays report at 84.77 was broken, and the price dropped to 84.11 so far. We expect the Yens strength to continue, and we believe we will see levels below 83.58 on the short term. We have noticed an ideal (Dark Cloud Cover) candle pattern on the daily chart (please refer to the attached chart), and this is a well known bearish pattern which promises more excitement as we drop lower & lower, especially after the BoJ disappointing the markets yesterday, and the Japs saying that they are watching the currency movement closely! The market has had it with such statements, the japs now will have to take a seat and watch the spectacular Yen show against the Dollar & the Euro. Short term support is at 84.03, if broken, we will be on the way to our long awaited target 82.50, and may be later we will test the psychological level 80.00, given enough time. On the other hand, it is hard now to imagine the Dollar beating the 85.21 resistance, But if it does, it will be violent in the face of those who believe in the Yen, and will shoot to 86.25 & may be 86.81.
Support:
84.03: previous well known support/
82.50: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.
80.00: psychological level.
Resistance:
85.21: Fibonacci 61.8% for the drop from yesterdays high.
86.25: Jul 16th low.
86.81: Jul 26th & 27th low.
---
GBPUSD
Early this morning, the Pound broke the support specified in yesterdays report 1.5441, after holding above it all day yesterday. With this break this pair has left the neutral zone which we said is between 1.5587 & 1.5441. Therefore, it is only logical now to expect the Pound to dive. But after more than 150 pips down from yesterdays top, the price is subject to a short term correction, with a condition of staying below 1.5510. The Pound is notorious for breaking, then moving in the other direction, before moving in the right direction smoothly and strongly. Short term support is at 1.5405, which we are trading just above as this report is prepared. If broken, the Pound will continue to fall, passing by 1.53 areas swiftly, and target 1.5293 & 1.5224. On the other hand, we could see a correction up to 1.5510, without changing this negative outlook. But if the Pound manages to break the resistance 1.5510, our negative outlook will suffer, and the price will shoot up to the important 1.5596, and the most important 1.5757.
Resistance:
1.5510: Fibonacci 61.8% for the drop from yesterdays top.
1.5596: Aug 26th high and the slowly falling trend line from Aug 16th top.
1.5757: Fibonacci 61.8% for the drop from Aug 6th major top.
---
Forextrading analysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Watch Price Reaction to News Releases to Determine a Currency Pairs Sentiment/Direction
Expert: Kris Matthews
When: Thu, Sep 2, 2010, 07:00 ET
In Part 3 of a four part series on trading sentiment, Kris Matthews reveals how to use the power of economic news releases to indicate the markets true sentiment. Most traders avoid the news because its volatile, or only believe it has a short term effect, but the way price reacts technically to surprises in news events can give you information beyond whats on the chart alone and allow you to avoid deadly traps.
Mondays headline for the EURUSD was Slowly rising, signaling weakness, and the Euro listened, and kept on falling from the weekly open, losing more than 140 pips from yesterdays Asian session high. And with this drop, the pair broke our support 1.2643 only to disappoint and drop less than 20 pips below it. But the surprise came yesterday just after the NY open, when the Euro bounced and jumped from its 5-day low at 1.2624, to 1.2741. This surprising jump could mean that the single currency has not given up yet, and that it will try to overcome a negative outlook. Short term resistance is at 1.2792, and breaking it will mean that it is able of achieving more games. The targets will be 1.2871 & 1.2959. The support is at 1.2684, and if broken, the drop will be resumed to the attractive 1.2550, and later to the all important 1.2432.
Support:
1.2684: Fibonacci 61.8% short term.
1.2550: the support area containing Jul 7th & 12th lows.
1.2432: Fibonacci 61.8% for the whole rise from 1.1875 to 1.3332.
Resistance:
1.2792: Fibonacci 61.8% for the drop from 1.2920.
1.2871: Fibonacci 38.2% level for the drop from the 4-month high of 1.3332.
1.2595: Fibonacci 50% level for the drop from the 4-month high of 1.3332.
---
USD/JPY
Dollar/Yen traded below the 84 level for a short while, then jumped to around 84.60 and consolidated above 84. This is probably just a short break, and once it is over, we expect the Yens strength to continue, and we believe we will see levels below 83.58 on the short term. We have noticed an ideal (Dark Cloud Cover) candle pattern on the daily chart (please refer to the attached chart), and this is a well known bearish pattern which promises more excitement as we drop lower & lower, especially after the BoJ disappointing the markets yesterday, and the Japs saying that they are watching the currency movement closely! The market has had it with such statements, the japs now will have to take a seat and watch the spectacular Yen show against the Dollar & the Euro. Short term support is at 84.11, if broken, we will be on the way to our long awaited target 82.50, and may be later we will test the psychological level 80.00, given enough time. On the other hand, it is hard now to imagine the Dollar beating the 84.88 resistance, But if it does, it will be violent in the face of those who believe in the Yen, and will shoot to 86.25 & may be 86.81.
Support:
84.11: the rising trend line from last weeks low on the hourly chart.
82.50: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.
80.00: psychological level.
Resistance:
84.88: the falling trend line from Jun 4th top, a very important line.
86.25: Jul 16th low.
86.81: Jul 26th & 27th low.
---
GBP/USD
The Pound broke the support specified in yesterdays report 1.5405, and dropped exactly as expected to reach 1.5326, which was not enough to meet our suggested target which was pips below 1.53. With this break this pair has left the neutral zone which we said is between 1.5587 & 1.5441. Therefore, it is only logical now to expect the Pound to dive. But after more than 240 pips down from yesterdays top, the price is subject to a short term correction, with a condition of staying below 1.5480. The Pound is notorious for breaking, then moving in the other direction, before moving in the right direction smoothly and strongly. Short term support is at 1.5382, which we are trading just above as this report is prepared. If broken, the Pound will continue to fall, and it will target 1.5293 & 1.5224. On the other hand, we could see a correction up to 1.5480, without changing this negative outlook. But if the Pound manages to break the resistance 1.5480, our negative outlook will suffer, and the price will shoot up to the very important 1.5596, and the most important 1.5757.
Support:
1.5382: short term 38.2% Fibonacci level.
1.5293: Jul 22nd high.
1.5224: Jul 6th high.
Resistance:
1.5480: Fibonacci 61.8% for the drop from Mondays top.
1.5596: Aug 26th high and the slowly falling trend line from Aug 16th top.
1.5757: Fibonacci 61.8% for the drop from Aug 6th major top.
---
Forextrading analysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Watch Price Reaction to News Releases to Determine a Currency Pairs Sentiment/Direction
Expert: Kris Matthews
When: Thu, Sep 2, 2010, 07:00 ET
In Part 3 of a four part series on trading sentiment, Kris Matthews reveals how to use the power of economic news releases to indicate the markets true sentiment. Most traders avoid the news because its volatile, or only believe it has a short term effect, but the way price reacts technically to surprises in news events can give you information beyond whats on the chart alone and allow you to avoid deadly traps.
For the first time in 11 days the Euro reached 1.28, penetrating the resistance in yesterdays report 1.2792, declaring that it refuses to give up. However, the rise stopped just before our target 1.2871, and the pair consolidated around 1.28 without getting very far from it, which keeps the hopes of more upside activity alive. Looking at the hourly chart, we see an obvious horizontal support at last weeks high 1.2777. The drop in the Asian session stopped only 3 pips above it, to give it more importance. If we hold above this level, the current bounce is expected to add more gains. But if broken, the Euro will gradually give up the latest gains, and will drop to 1.2676 first, and at a later time to 1.2550. On the other hand, the resistance now is at 1.2825, and if broken, then the odds of breaking 1.2871 will be enormous. In this case, we expect the Euro to continue running the show, and to target relatively high levels, such as the important Fibonacci levels at 1.2959 & 1.3047. We do hope that Tomorrows US jobs report will put an end to the boredom and frustration trading the Euro has brought in the last two weeks.
Support:
1.2777: last weeks top, Aug 27th high, and an obvious hourly support.
1.2676: the bottom of the rising channel on the hourly chart.
1.2550: the support area containing Jul 7th & 12th lows.
Resistance:
1.2825: Fibonacci 61.8% for the short term.
1.2595: Fibonacci 50% level for the drop from the 4-month high of 1.3332.
1.3047: Fibonacci 61.8% level for the drop from the 4-month high of 1.3332.
---
USD/JPY
One again, Dollar/Yen traded below the 84 level for a short while, then jumped to around 84.60 and consolidated above 84, just like it did less than 24 hours ago! This is probably just a short break, and once it is over, we expect the Yens strength to continue, and we believe we will see levels below 83.58 on the short term. We have noticed an ideal (Dark Cloud Cover) candle pattern on the daily chart (please refer to the attached chart), and this is a well known bearish pattern which promises more excitement as we drop lower & lower, especially after the BoJ disappointing the markets yesterday, and the Japs saying that they are watching the currency movement closely! The market has had it with such statements, the japs now will have to take a seat and watch the spectacular Yen show against the Dollar & the Euro. Short term support is at 84.06, if broken, we will be on the way to our long awaited target 82.25, and may be later we will test the psychological level 80.00, given enough time. On the other hand, it is hard now to imagine the Dollar beating the 84.81 resistance, but if it does, it will be violent in the face of those who believe in the Yen, and will shoot to 86.25 & may be 86.81.
Support:
84.06: Fibonacci 61.8% for the short term.
82.25: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.
80.00: psychological level.
Resistance:
84.81: the falling trend line from Jun 4th top, a very important line.
86.25: Jul 16th low.
86.81: Jul 26th & 27th low.
---
GBP/USD
The moment the Pound broke 1.5441 on Monday, this pair has left the neutral zone which we said is between 1.5587 & 1.5441. Therefore, it is only logical now to expect the Pound to dive. But after more than 240 pips down from yesterdays top, the short term correction we are seeing now is (As we said yesterday) no surprise, with a condition of staying below 1.5480. The Pound is notorious for breaking, then moving in the other direction, before moving in the right direction smoothly and strongly. And now that we have tested 1.5480, we should wait and see what will the price do with it! Breaking this important level (in case it happens) can change the outlook dramatically! Short term support is at 1.5395, which was tested earlier this morning. If broken, the Pound will continue to fall, and it will target 1.5262 & 1.5151. On the other hand, the price has challenged 1.5480 yesterday, but it dropped more than 90 pips from yesterdays high. If we maintain trading below it, that will not change a thing. But if we break it, our negative outlook will suffer. The resistance we put our attention at is 1.5441, which is the guardian of 1.5480! if broken, the price will shoot up to the very important 1.5596, and the most important 1.5700.
Support:
1.5392: short term 61.8% Fibonacci level.
1.5262: Jul 5th high.
1.5151: Jul 20th low
Resistance:
1.5441: the falling trend line from yesterdays top on intraday charts.
1.5596: Aug 26th high and the slowly falling trend line from Aug 16th top.
1.5700: Aug 16th important top.
---
Forex trading analysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
Expert: Kris Matthews
When: Thu, Sep 16, 2010, 07:00 ET
Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.
The Euro benefited from the US jobs report to approach 1.29 on Friday, and penetrated it after the market opened again last night. It seems like the Euro is targeting the top of the rising hourly channel which is illustrated on the attached chart. This top is at 1.2920, which is also Aug 18th high. When we take look at the hourly chart, we can spot an interesting support at 1.2777. This support is formed by Aug 27th high, and on Thursday, the price stopped 3 pips below it during the Asian session and 2 pips above it during the European sessions, which adds to its importance. Moreover, the rising trend line from Aug 31st low is now at 1.2837, providing the most important short term support. So, we will be in a neutral zone between 1.2920 & 1.2837, waiting for a break! If we break the resistance 1.2920, nothing will stop the Euro from reaching 1.3000, then the most important short term resistance 1.3047. On the other hand, support is at 1.2837, and if broken, we will drop to test the important 1.2777, and if broken, a strong drop will target 1.2676.
Support:
1.2837: the rising trend line from Aug 31st low.
1.2777: last weeks top, Aug 27th high, an obvious hourly support, and the rising trend line from Aug 31st low on the hourly chart. The single most important short term support without a shadow of a doubt.
1.2676: the bottom of the rising channel on the hourly chart.
Resistance:
1.2920: the top of the rising trend channel on the hourly chart, and Aug 18th high.
1.3000: psychological level.
1.3047: Fibonacci 61.8% level for the drop from the 4-month high of 1.3332.
---
GBP/USD
The Pound jumped after the market open and went back to test the important resistance area 1.5480/90, which was tested on the first day of this month, and dropped from there with more than 100 pips at that time. This area is formed between the short term Fibonacci 61.8% level at 1.5480, and Sep 1st high. Will the price break it or will it frustrate it again just like it did 5 days ago? We strongly believe that the reaction from this area is the single most important thing that will determine the direction for the next few hours. If we break it (And here we prefer a break of the top of the area at 1.5490, not the Fibo level at 1.5480), the price will jump to 1.5565, and may be later to 1.5669. On the other hand the support is at 1.5442, and breaking this level would mean we are getting far from the important 1.5480/90, and a new drop will start. The targets for such a drop are 1.5349, and 1.5262. everything depends on the reaction from the all important 1.5480/90.
Support:
1.5442: the rising trend line from Fridays low on intraday charts.
1.5349: Thursdays low.
1.5262: Jul 5th high.
Resistance:
1.5490: the top of the resistance area formed between Fibonacci 61.8% short term & Sep 1st high.
1.5565: the falling trend line from Aug 16th high.
1.5669: Aug 19th important top.
---
Forex tradinganalysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
Expert: Kris Matthews
When: Thu, Sep 16, 2010, 07:00 ET
Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.
The Euro benefited from the US jobs report to approach 1.29 on Friday, and penetrated it after the market opened again last night. It seems like the Euro is targeting the top of the rising hourly channel which is illustrated on the attached chart. This top is at 1.2920, which is also Aug 18th high. When we take look at the hourly chart, we can spot an interesting support at 1.2777. This support is formed by Aug 27th high, and on Thursday, the price stopped 3 pips below it during the Asian session and 2 pips above it during the European sessions, which adds to its importance. Moreover, the rising trend line from Aug 31st low is now at 1.2837, providing the most important short term support. So, we will be in a neutral zone between 1.2920 & 1.2837, waiting for a break! If we break the resistance 1.2920, nothing will stop the Euro from reaching 1.3000, then the most important short term resistance 1.3047. On the other hand, support is at 1.2837, and if broken, we will drop to test the important 1.2777, and if broken, a strong drop will target 1.2676.
Support:
1.2837: the rising trend line from Aug 31st low.
1.2777: last weeks top, Aug 27th high, an obvious hourly support, and the rising trend line from Aug 31st low on the hourly chart. The single most important short term support without a shadow of a doubt.
1.2676: the bottom of the rising channel on the hourly chart.
Resistance:
1.2920: the top of the rising trend channel on the hourly chart, and Aug 18th high.
1.3000: psychological level.
1.3047: Fibonacci 61.8% level for the drop from the 4-month high of 1.3332.
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GBP/USD
The Pound jumped after the market open and went back to test the important resistance area 1.5480/90, which was tested on the first day of this month, and dropped from there with more than 100 pips at that time. This area is formed between the short term Fibonacci 61.8% level at 1.5480, and Sep 1st high. Will the price break it or will it frustrate it again just like it did 5 days ago? We strongly believe that the reaction from this area is the single most important thing that will determine the direction for the next few hours. If we break it (And here we prefer a break of the top of the area at 1.5490, not the Fibo level at 1.5480), the price will jump to 1.5565, and may be later to 1.5669. On the other hand the support is at 1.5442, and breaking this level would mean we are getting far from the important 1.5480/90, and a new drop will start. The targets for such a drop are 1.5349, and 1.5262. everything depends on the reaction from the all important 1.5480/90.
Support:
1.5442: the rising trend line from Fridays low on intraday charts.
1.5349: Thursdays low.
1.5262: Jul 5th high.
Resistance:
1.5490: the top of the resistance area formed between Fibonacci 61.8% short term & Sep 1st high.
1.5565: the falling trend line from Aug 16th high.
1.5669: Aug 19th important top.
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Forex tradinganalysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
Expert: Kris Matthews
When: Thu, Sep 16, 2010, 07:00 ET
Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.
The Euro fell heavily during yesterdays Asian session, then it resumed the drop during the European session. After stopping just below the enormous resistance we talked about in Mondays report 1.2920 (Mondays high was 1.2916), we saw the Euro fall, breaking yesterdays support 1.2777 and successfully reached the first suggested target at 1.2690. With this drop, the price has broken 3 critical levels at once: 1. the rising trend line from Aug 31st (which was broken at 1.2860), 2. the falling trend line from Sep 1st top and 3. the massive support at 1.2777. This has shifted the short & medium terms technical outlook to the negative territory! But on the other hand, after the big drop, chances of seeing a correction before resuming the journey south are massive. The ideal target area for a short term correction is from 1.2767 to 1.2824. Therefore, todays best strategy may be selling if the price rebounds to this area. Short term resistance is at 1.2824, we do not expect it to be broken today. But if it is broken, we will jump to 1.2912 & 1.2972. Support is at 1.2698, and a break here would target 1.2627 and may be at a later time 1.2522.
Support:
1.2698: obvious & attractive horizontal support on intraday charts.
1.2627: Aug 31st low.
1.2522: Jul 13th low.
Resistance:
1.2824: Fibonacci 61.8% for the drop from Mondays high.
1.2912: the retest level for the rising trend line from Aug 31st low on the hourly chart.
1.2972: the top of the rising trend channel on the hourly chart.
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USD/JPY
The Dollar/Yen dropped to 83.33, a new 15-year low! The latest drop came in the midst of the disappointment in the BoJ, which after a 2-day meeting, announced that it will not do anything at the moment to deal with the strong Yen. We have recently adjusted the falling trend line on the hourly chart to include Fridays jump. We still believe in USD\/JPY weakness, and we believe it will travel south. Only a break of this line in specific will change our minds. This line is currently running at 85.10 (please refer to the attached chart). To keep trading below it, indicates more downside activity, especially after the BoJ disappointed again yesterday, as the Japs said once again they are watching closely, but they did nothing! The market has had it with these comments, and now the Japanese authorities should buy tickets to the Yen Show, and see what it will do to the Dollar & the Euro! Short term support is at 83.41, and if broken, we will be on the way to our long-awaited target at 82.25, then we will see the psychological level at 80.00. On the other hand, the above mentioned trend line is at 85.10, and Fibonacci 61.8% short term is at 84.49. If the latter is broken, we will target former. And if this one is also broken, the Dollar will be violent to us all, as it will shoot up to 86.25.
Support:
83.41: important intraday level.
82.25: the falling trend line on the weekly chart, combining the monthly lows of Dec 2008, Jan & Nov 2009.
80.00: psychological level.
Resistance:
84.49: Fibonacci 61.8% for the short term.
85.10: the falling trend line from June 4th top on the hourly chart
86.25: Jul 16th bottom.
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GBP/USD
The Pound dropped on Monday, from the very same area which stopped it on Sep 1st, the all important resistance 1.5480/90, and this drop reached 1.5295 yesterday. Then, the price jumped for more than 100 pips so far. This bounce or short term uptrend found a supporting trend lien which is currently at 1.5374. We expect the Dollar to try and break this level, to continue its rebound from the gigantic resistance 1.5490. If it manages to do so, we will be in for another episode of the drop series, similar to what we have seen on Monday. This will target 1.5262 at the very least, and at a later time 1.5151. On the other hand, the most important resistance is 1.5441. We do not exaggerate when we say that this level is the single most important one in determining the short term direction. If broken, the Pound will refuse to give up to our negative outlook, and will break free, targeting the interesting areas above 1.55, most interesting of them in our eyes are 1.5507 & 1.5596.
Support:
1.5374: the rising trend line from yesterdays low on intraday charts.
1.5262: Jul 5th high.
1.5151: the rising trend line from Fridays low on intraday charts.
Resistance:
1.5441: the top of the rising trend channel on the hourly chart.
1.5507: Aug 19th low.
1.5596: Aug 16th low.
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Forex tradinganalysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
Expert: Kris Matthews
When: Thu, Sep 16, 2010, 07:00 ET
Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.
The Euros rise stopped yesterday 7 pips before the level we recommended selling at. We saw this pair topping at 1.2761, before diving below 1.27 once again. Yesterdays trading changed nothing in the technical outlook we talked about in the last 2 reports. After stopping just below the enormous resistance we talked about in Mondays report 1.2920 (Mondays high was 1.2916), we saw the Euro fall, breaking yesterdays support 1.2777 and successfully reached the first suggested target at 1.2690. With this drop, the price has broken 3 critical levels at once: 1. the rising trend line from Aug 31st (which was broken at 1.2860), 2. the falling trend line from Sep 1st top and 3. the massive support at 1.2777. This has shifted the short & medium terms technical outlook to the negative territory! But on the other hand, after the big drop, chances of seeing a correction before resuming the journey south are massive. The ideal target area for a short term correction is from 1.2757 to 1.2817. Therefore, todays best strategy may be selling if the price rebounds to this area. Short term resistance is at 1.2787, we do not expect it to be broken today. But if it is broken, we will jump to 1.2901 & 1.3047. Support is at 1.2675, and a break here would target 1.2608 and may be at a later time 1.2550.
Support:
1.2675: important intraday level.
1.2608: Aug 25th low.
1.2550: Jul 12th low.
Resistance:
1.2787: Fibonacci 50% for the drop from Mondays high, and the retest level for the broken trend channel, the single most important resistance for the medium term.
1.2901: Aug 19th top.
1.3047: Fibonacci 61.8% for the medium term.
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USD/JPY
The Dollar/Yen dropped to 83.33, a new 15-year low! The latest drop came in the midst of the disappointment in the BoJ, which after a 2-day meeting, announced that it will not do anything at the moment to deal with the strong Yen. We have recently adjusted the falling trend line on the hourly chart to include Fridays jump. We still believe in USD\/JPY weakness, and we believe it will travel south. Only a break of this line in specific will change our minds. This line is currently running at 84.88 (please refer to the attached chart). To keep trading below it, indicates more downside activity, especially after the BoJ disappointed again yesterday, as the Japs said once again they are watching closely, but they did nothing! The market has had it with these comments, and now the Japanese authorities should buy tickets to the Yen Show, and see what it will do to the Dollar & the Euro! Short term support is at 83.59, and if broken, we will be on the way to our long-awaited target at 82.00, then we will see the psychological level at 80.00. On the other hand, the above mentioned trend line is at 84.88. If broken, the Dollar will be violent to us all, as it will shoot up to 86.25 & 86.95.
Support:
83.59: short term 61.8% Fibonacci level.
82.00: the falling trend line on the weekly chart, combining the monthly lows o Dec 2008, Jan & Nov 2009.
80.00: psychological level.
Resistance:
84.88: the falling trend line from June 4th top on the hourly chart
86.25: Jul 16th bottom.
86.95: Jul 1st low.
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GBP/USD
The Pound broke through the top of the falling hourly channel at 1.5441 yesterday. As it did so, it also broke our resistance and reached the first suggested target 1.5507 successfully, before retreating back towards 1.54 this morning. The break of the channel top will have its influence on the short term price activity, but in order to do so, the price should hold above the support 1.5386 during the current correction. If it does, we can say with confidence that the technical outlook is positive. On the other hand, a break here would surely mean that the Pound is not capable of using the channel break to harvest more gains. If 1.5386 is broken, a strong drop is to be expected, targeting 1.5262 at least, and may be later 1.5147. Resistance is at 1.5461, it should be broken soon to facilitate capitalization on the break of the channel before the weekend. In this case, the targets will be huge, as we expect them to be 1.5646 & 1.5728.
Support:
1.5386: Fibonacci 61.8% for the rise from 1.5295.
1.5262: Jul 5th high.
1.5147: Jul 22nd low and the same area with Jul 20th low as well (which was 1.5151).
Resistance:
1.5461: Fibonacci 61.8% for the short term.
1.5646: Fibonacci 50% for the whole drop from Aug 6th top.
1.5728: Fibonacci 61.8% for the whole drop from Aug 6th top.
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Forex tradinganalysis written by Munther Marji for Forexpros.
---
Disclaimer: Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
