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USD/CHF Breaks One Resistance But Another On The Way

February 28, 2013 in Chart Alert

USD/CHF has been finding resistance below the critical 200-day moving average for past few days. The currency pair had broken below the 200-day moving average on September 11, 2012 i.e. over 4 and a half months back and since then the price action could not break over this resistance.

The break certainly indicates that we can expects further upward gains but there is one more hurdle on the way and that is 0.9389 level. The current high has been 0.9373. In case USD/CHF breaks over 0.9389 then it should target the 95.00 psychological level but in case the resistance of 0.9389 holds then we can see some consolidation.

USD/CHF daily chart with 200-day moving average

USD/CHF breaks above 200 day moving average - daily chart

You may also check the weekly outlook for USD/CHF.

Yen slightly changed after Kuroda nomination for BoJ Governor

February 28, 2013 in Forex Analysis

Economic news (28 February 2013) – The yen remained weak in early Thursday trading after Japanese Prime Minister Abe nominated Asian Development Bank President Haruhiko Kuroda for the post of BoJ governor.

The Japanese currency is on the way for a fifth consecutive month of decline, reaching its longest stretch since August 2008. The yen has fallen by 4.8% this year alone, thus becoming the worst currency performer.

At the time of writing, the yen was trading at $92.38 after experiencing a two-day decline, touching at $94.07 on 25 February, its weakest level since May 2010.

Prime Minister Abe’s choice of Haruhiko Kuroda was highly expected by market makers as Kuroda advocates for Abe’s monetary-easing plans and higher inflation. It is believed that Kuroda will easily receive approval to become the next BoJ governor.

Since taking the office in mid December 2012, Shinzo Abe has been very vocal about his strategy to weaken the yen, and that the BoJ should act in agreement with the government’s monetary policy.

Analysts expect a strong agreement to be formed between the BoJ and the Japanese government in order to revive the economy and stimulate growth in the world’s third largest economy. As weakening the national currency will be the focus of Japanese policy, analysts anticipate the yen’s value to remain low for the near- to mid-term.


Technical analysis



At yesterday’s session the dollar was moving in the 91.05-92.35 range. This morning the currency pair was trading at 92.10-92.45.

Should the dollar successfully overcome resistance zone of 92.30-92.65, its aim will be reaching and testing the 93.00-93.20 zone. If successful, the upward trend will continue to 93.45-93.65. If the dollar falls below the support of 92.10-91.90, the next support zone is expected to be at 91.55-91.35 JPY. In case of a breakdown, the downward trend will continue to 91.10-90.80.



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USDJPY: Weakens, Further Bear Threats Seen.

February 27, 2013 in Forex Analysis

USDJPY: The pair still faces downside pressure on correction. Further downside is likely towards the 90.86 level. Below here could force further downside towards the 90.00 level. On ending the mentioned correction, it should return above the 94.45 level to trigger medium term uptrend. Further out, resistance resides at the 95.00 level with a turn above here aiming at the 95.50 level followed by the 96.00 level and next the 96.50 level. On the downside, support resides at the 92.20 level where a break will aim at the 91.70 level and then the 90.00 level. A cut through there will aim at the 89.00 level. All in all, USDJPY remains biased to the upside in the medium term.

Euro slightly higher after steep decline on Italian election results

February 27, 2013 in Forex Analysis

Economic news (27 February 2013) – The euro started the first day of the week with a sharp depreciation against its major currency rivals after results of the parliamentary elections in Italy raised questions about the future of financial reforms. Following the reports on Tuesday, the single currency fell to a 7-week low against the dollar, depreciating by 1.1% to an intraday low of 1.3027, having peaked at 1.3318 on Monday before the announcement of the preliminary results.

In early Wednesday trading, the euro managed to climb slightly against the dollar, and was trading at 1.3082 at the time of writing, as investors are anticipating today’s auction of Italian 10- and 5-year government bonds. Italian 10-bond yields reached their highest level since December, rising to4.91% during Tuesday’s session.

Italian election results stunned the markets since there is no clear winner, which prompted fears of a political crisis in the already economically unstable and debt-ridden country. The gloom outlooks caused a big sell-off of European equities as investors were overwhelmed by economic uncertainty and a potential reigniting of the Eurozone crisis.

Meanwhile, the dollar increased against its major currency counterparts on Tuesday, after a series of positive US economic data and Fed Chairman Ben Bernanke’s support for continuing the QE (quantitative easing) program.

Looking ahead of the day, the Italian 10-year bonds auction is expected to cause more volatility for the euro, and ECB President Mario Draghi is to deliver a speech addressing the Bank’s observation of the European economy.


Technical analysis


At yesterday’s session the euro was moving in the range of 1.3015-1.3115. This morning the currency pair was trading at 1.3045-1.3070.

Should the euro overcome the resistance zone of 1.3065-1.3085, its aim will be reaching and testing the 1.3115-1.3140 zone. If successful, the upward trend will continue to 1.3160-1.3175. If the euro falls below the support zone 1.3040-1.3015, the next support is expected to be in the 1.3000-1.2980 area. In case of a breakdown, the downward trend will continue to 1.2950-1.2930.

EUR/USD Against The Wall Of Double Support

February 26, 2013 in Chart Alert

In our last weekly analysis of EUR/USD we had mentioned the following:

“On the down side if there is a decisive break below 1.3060 then very strong support near 1.3000/1.3020 is expected. This zone will have combined supports of the psychological level of 1.3000, 200-day moving average and the support zone during the sideways move during December 2012.”

The same can also be seen at this  previous EUR/USD chart alert.

Well, the currency pair found support at the mentioned joint support of 200-day moving average and the mentioned support level of December 2012.

If this support holds the some extended sideways movement or even the end of the recent downward consolidation is expected. On the other side if there is a decisive break of this support then some quite deeper moves could be expected.

EUR/USD and the joint supports – Daily Chart

EUR/USD daily chart - support at 200 day moving average


USDCHF And 200 Day Moving Average Resistance

February 26, 2013 in Chart Alert

USD/CHF found resistance exactly at 200-day moving average again. If this resistance holds then a reversal may take place but if USD/CHF manages to break this resistance this time then it may try to test the psychological 0.9500. Please check the daily chart of USD/CHF:

On the down side the trend line support needs to be watched.

USD/CHF daily chart

USD/CHF daily chart - resistance at 200 day moving average

USD/CHF Caught Between 38.2% And 50% Retracement Levels

February 24, 2013 in Chart Alert

USD/CHF had seen a strong down trend during the beginning of June 2010 and August 2011. The currency pair had fallen from the high of 1.7731 to 0.7069. The upward consolidation of this downward move gad found strong resistance near 61.8% retracement level and the currency pair had fallen below the 50% retracement of the same move. Since then this 50% retracement had turned into a resistance. There was a break of this resistance during November 2012 but the price action did not sustain over that and went into a sideways mode between the 38% and 50% retarament levels.

Considering this the 0.9389 resistance level of January’s high becomes a critical resistance as a decisive break over this will also represent a break over the mentioned 50% retracement level resistance. Please check the following weekly chart for USD/CHF.

USD/CHF weekly chart

USD/CHF and the retracement levels - weekly chart

GBPUSD Breaks the Sideways Range of 2.5 Years

February 24, 2013 in Chart Alert

GBP/USD has been in a very volatile sideways range between 1.5233 and 1.6746 for past two and a half years. The last week’s break below 1.5233 comes as a break of that range and certainly makes the bearish outlook strong. On the other hand the support of approaching 1.5000 level may try to balance the bearish outlook and cause some sideways move over 1.5000. Please check GBP/USD weekly chart:

GBP/USD weekly chart

GBP/USD breaks below the range


Japanese Yen Pairs- Which Currency Pairs Broke The Support Trends

February 24, 2013 in Chart Alert

Some Japanese yen currency pairs had been following clear support trends. In this post we will check any updates of some of those pairs.

USD/JPY – Trend continues

Past 14 weeks the price action has been mainly over 5-Week EMA level and the 5-week EMA has been acting as support. The trend continues even when there is a loss of momentum in the uptrend. Check USD/JPY weekly chart:

USD/JPY 5 week EMA - weekly chart

EUR/JPY – Indication of a Break in the  Trend

EUR/JPY was also following the same trend of support near 5-week EMA for past 13 weeks. The trend seems to be breaking now even though the weekly closing was above that support level. Check EUR/JPY weekly chart:

EUR/JPY 5 week EMA - Weekly chart

GBP/JPY Breaks the trend

GBP/JPY had been finding support near 5-week EMA for 9 weeks continuously. The first break of that took place 4 weeks back but the pair again recovered and mainly stayed over that support level. Now that trend seems to be finally broken. Check GBP/JPY weekly chart:

GBP/JPY 5 week EMA - weekly chart

AUD/JPY – Will the trend break soon?

Like other JPY pairs, AUD/JPY was also seeing the same trend for past 16 weeks where the support has been coming near the 5-week EMA. The loss of momentum in the uptrend and the early efforts to break below that support gives a warning that the currency pair may break that trend.

AUD/JPY 5 week EMA - weekly chart

EUR/USD’s Supports And Resistances

February 24, 2013 in Chart Alert

1) EUR/USD near the 38.2% retracement of it’s upward move from 1.2042 to 1.3711. A move towards this i.e. 1.3065/1.3073 can not be ignored.

EUR/USD weekly chart

EUR/USD - recent upward gain and the 38 percent retracement

2) The Resistance had come below 50% retracement of the previous fall from 1.4940 to 1.2042. Please also note that the current price action is at 38.2% retrament of the same move. This previous resistance may act as support for some time.

Another weekly chart of EUR/USD

EUR/USD finding support neat 38 percent retracement

3) 200-day moving average support and the support levels of December 2012 are in the same zone. The current 200-day moving average is at 1.2988. The lowest point of the sideways moves during December was 1/2997.

EUR/USD chart with 200-day moving average

EUR/USD -200 day moving average and earlier support

EUR/USD resistance trend line Expected Resistance for EUR/USD

The expected resistance is near 1.3325. Here the combined resistances of 3 forces will come into picture and those are as follows:

1) 55-day EMA.

2) The previous support during February 15th to February 20th’s sideways move. This support should act as resistance now.

3) EUR/USD has recently broken below the support trend line which had been in place for 14 weeks. That support trend line should now act as resistance.

USDCHF- Strengthens For Third Week In A Row

February 23, 2013 in Forex Analysis

USDCHF: With USDCHF maintaining a third-week of upside gains, there is risk of a recapture of the 0.9388 level, its Feb 18’2013 high. Further out, resistance comes in at the 0.9400 level followed by the 0.9456 level and then the 0.9511 level. Its weekly RSI is bullish and pointing higher supporting this view. Conversely, support lies at the 0.9184 level where a violation will turn attention to the 0.9100 level. Further down, support comes in at the 0.9021 level and next the 0.8950 level. Price hesitation may occur here due to its psychological importance. On the whole, the pair continues to hold on to its upside offensive.

USDCAD: Sees Further Bullish Momentum.

February 21, 2013 in Forex Analysis

USDCAD: With the pair on the verge of recapturing the 1.0200 level, we could see further price extension. This could target the 1.0250 level where a violation will aim at the 1.0300 level. Its daily RSI is bullish and pointing higher supporting this view. On the downside, support lies at the 1.0150 level where a break if seen will target the 1.0099 level followed by the 1.0000 level. Further down, support stands at the 0.9956/32 levels. All in all, USDCAD remains biased to the upside medium term on further upside offensive.