Forex Technical Analysis

EURUSD: The pair has halted and then triggered a corrective recovery of its declines from the 1.4938-1.3491 levels.This development now leaves EUR targeting further strength as we enter a new week with upside risk towards the 1.3835 level. Unless the 1.3835 level is decisively taken out, the pair could turn lower again. However, on an eventual push through that level, the 1.3936 level, its Sept 09’2011 high will be targeted followed by the 1.4095 level, representing its Sept 08’2011 low and possibly higher towards its falling trend line currently at 1.4323 level. On the downside, major support lies at the 1.3491 level, its Sept 12’2011 low. A convincing violation of here will call for further downside pressure towards the 1.3422 level, its Feb’2011 low and then the 1.3300 level, its psych level. All in all, EUR may have triggered a corrective recovery but continues to maintain its short downtrend.

EURUSD: While corrective recovery may have been triggered, as long as the 1.3835 level remains as resistance our outlook on EUR remains lower. However, on an eventual push through that level, the 1.3936 level, its Sept 09’2011 high will be targeted followed by the 1.4095 level, representing its Sept 08’2011 low and possibly higher towards its falling trend line currently at 1.4323 level. On the downside, support lies at the 1.3491 level, its Sept 12’2011 low. A convincing violation of here will call for further declines towards the 1.3422 level, its Feb’2011 low and then the 1.3300 level, its psych level. Its daily RSI is bearish and pointing lower suggesting further weakness.

USDJPY – Our overall outlook remains bearish as USDJPY looks to decline further towards the 75.92 level, its 2011 low. A clean break below here will open the door for further weakness towards the 74.00 level and the 72.00 level, representing its psycho levels. Its monthly RSI is bearish and pointing lower suggesting further weakness. On the upside, unless its bottom forming scenario seen on the daily and weekly charts materializes, our downside outlook remains intact. The pair will have to break and close above the 80.19 level traded on Aug 04’2011 to put its broader long term weakness on hold and bring further gains towards its July’2011 high at 81.63. A violation of there will open up further upside risk towards the 85.51 level. All in all, we maintain a bearish bias on the pair in Sept with the risk being a break and hold below the 75.92 level.

EURUSD: 1.3653 Short-Term Trend: downtrend Outlook: Approximately two weeks ago I turned bearish on EUR/USD when it failed at the 1.4530/40 level ( I was bullish before that but this failure made me bearish). Last week EUR declined sharply and strongly justified my bearish position. As said before, the most likely downside target is seen at 1.3520. Of course further downside potential is possible considering the strong downtrend on the daily chart now. So, the short side remains favored here as long as the prices stay below 1.4045/1.4100 area. But considering the huge potential profits one may already have, they also can consider taking profits here. On the upside, only a move abv 1.4045/1.4100 will indicate the current decline has ended... Strategy: Trading from short side is still favored but considering the huge hypothetical profits from 1.4400+ area, one can also take profits here.

GBPUSD: The pair’s continued weakness yielded a break and hold below its long term rising trendline the past week. This is coming on the heels of its previous week losses and has now opened up further downside risk towards the1.5778 level, its July’2011 low and then the 1.5700 level, its psycho level. Below here will set the stage for a push further lower towards the 1.5473 level. Its weekly RSI is bearish and pointing lower supporting this view. On the upside, GBP will have to break and hold above the 1.6451 level and then the 1.6614 level to halt its present bear threats. This if seen will bring further upside gains towards the 1.6743 level, its 2011 high and then the 1.6900 level, its psycho level.

USDCHF: With USDCHF rallying through its key resistance level at the 0.8549 level, its June 16’2011 high to close the week higher, the pair has set the stage for a stronger bullish tone. This is coming on the back of its corrective recovery triggered off the 0.7068 level, its 2011 low and this has paved the way for further strength towards the 0.8892 level where its May 13’2011 high is located. A decisive break and hold above here will open up further upside risk towards its May 13’2011 high at 0.8946 and possibly its .50 Fib Ret (1.1727-0.7068 decline) at 0.9382.Its weekly RSI is bullish and pointing higher supporting this view. On the downside, pullback if seen will initially aim at the 0.8549 level, its June 16’2011 where a reversal of roles as support is expected to occur and turn the pair higher. However, a breach of here will set the stage for further declines towards its Aug 29’2011 high...

EURUSD: The pair may have halted its six-day decline on Wednesday but continues to maintain its corrective tone set from the 1.4550 level. This leaves the possibility of a return to the 1.3973 level, its Sept 06’2011 low imminent. Below here will activate further declines towards the 1.3837 level, its July 12’2011 low and subsequently its Mar 06’2011 low at 1.3751. Alternatively, resistance stands at the 1.4283 level, its Sept 06’2011 high where a break will bring further upside gains towards the 1.4325 level, its trendline resistance. A turn back lower could happen here but if this fails to occur, further strength should build up towards the 1.4550 level where a breach will aim at the 1.4696 level, its Jun 07’2011 high and next the 1.4938 level, its 2011. 

EURUSD: With a gap lower confirming its follow through on its past week losses in early trading today, EUR is now set to weaken further towards its 200 ema located at the 1.4075 level. Slightly below that level stands the 1.4053 level, its Aug 05’2011 low where a violation will push the pair further lower towards the 1.3837 level, its July 12’2011 low and subsequently its Mar 06’2011 low at 1.3751. Its weekly and daily RSI is bearish and pointing lower suggesting further weakness. On the upside, the risk to the pair’s present downside outlook will be a return above the 1.4496 level, marking its Aug 26’2011 high. Above here if seen will create scope for a move towards the 1.4550 level where a break will aim at the 1.4696 level, its Jun 07’2011 high and next the 1.4938 level, its 2011. All in all, having turned back below its broken falling trendline and wiped out its two-week gains, risk...

EURUSD: 1.4203 Short-Term Trend: sideways Outlook: A week ago I thought  EUR was likely to break higher abv the 1.4530/40 level. Well, it reached that level, but couldn't break above it (probably the worst possible situation for a trader: to see a breakout only to see it can't hold). The failure to hold abv the 1.4540 produced a sharp move lower later in the week and EUR plunged below 1.4200 on Friday. Now, there is a strong sell signal from the daily Stochastics and considering the sideways nature of the daily chart, further decline is favored. The question is how lower  EUR can go.  If the previous Diametric is still valid, then it will find a bottom abv 1.4055 and will head higher again. If the count presented above is unfolding, then the odds favor weakness all the way down to 1.3520. Right now I favore the bearish case and only a move abv 1.4390 will make me think different. You can also...

GBPUSD: With a third day of bearishness now underway following its price failure at the 1.6451 level, further downside pressure is expected.GBP is now trading a few pips below its Aug 26’2011 low at 6209 and convincing break and close below there will open the door for further declines towards the 1.6006 level and ultimately, the 1.5778 level, its July’2011 low. Its daily RSI is bearish and pointing lower suggesting further weakness. On the upside, GBP will have to break and hold above the 1.6451 level and then the 1.6614 level to halt its present bear threats. This if seen will bring further upside gains towards the 1.6743 level, its 2011 high and then the 1.6900 level, its psycho level.