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Daily Technical Analysis by Kate Curtis from Trader's Way

Forex Analysis by Kate Curtis of Trader's Way . Kate Curtis updates the outlook and analysis daily in this sub-forum.
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GBP/USD Trend Play (June 28, 2013)

Postby katetrades » Fri Jun 28, 2013 5:43 am

GBP/USD is still on a steady downtrend on its 1-hour time frame, as the pair is moving below a falling trend line connecting its recent highs for the month.

The pair appears to have bounced off the 1.5200 major psychological support, but this might just mean that a correction is in the works. If that’s the case, the pair could pull up to the Fib levels which are in line with the trend line.

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In addition, the 50% Fib seems to be in line with a former support area, which could act as resistance from now on. Stochastic is still climbing, suggesting that there’s enough upward momentum to push for a retracement.

Shorting around the 1.5300 area with a tight stop and a target of 1.5200 would yield a good reward-to-risk ratio for a day trade.

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AUD/USD Intraday Retracement (July 1, 2013)

Postby katetrades » Mon Jul 01, 2013 6:04 am

China just printed its set of PMI figures from HSBC and the government in today’s Asian session, and both reports showed weaker performance in its manufacturing sector. The government figure fell from 50.8 to 50.1 while the HSBC final reading was revised down from 48.3 to 48.2. Weak manufacturing in China could mean weak demand for Australia’s exports.

AUD/USD managed to bounce after the release of these figures, as the actual readings weren’t way below expectations. However, moving forward, it still hints at poorer export industry performance.

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There could be a retracement to the .9200 major psychological level for the day, before dollar demand is renewed during the US session. That’s close to the 38.2% Fibonacci retracement level, which has acted as support in the past.

Stochastic is still climbing from the oversold area, suggesting that Aussie bulls are still in control for now. However, once the oscillator turns from the overbought region, the pair could resume its selloff.

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EUR/USD: Double Bottom Forming? (July 2, 2013)

Postby katetrades » Tue Jul 02, 2013 6:26 am

EUR/USD has tested the 1.3000 major psychological level a few times already, forming a double bottom pattern on its 1-hour time frame. However, the pair has yet to break above the neckline before confirming that a reversal is taking place.

The neckline is located at the support turned resistance area at the 1.3100 major psychological level. Stochastic is in the overbought region with a bearish divergence, suggesting that bulls still need more momentum to push the pair higher.

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If that takes place, EUR/USD could have 100 more pips to rally, as the pattern is roughly 100 pips in height. There are no major reports from both euro zone and the U.S. today, but the speeches from a couple of dovish Fed officials could reduce dollar demand.

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NZD/USD Scalping Range Setup (July 3, 2013)

Postby katetrades » Wed Jul 03, 2013 7:27 am

NZD/USD has been moving sideways on its 1-hour time frame, as the pair found support around the .7720 level and resistance near .7830. The pair is currently moving closer to the bottom of the range and getting ready to test the support level.

There are no major reports due from New Zealand today, which suggests that NZD/USD could be more dependent on US data. For today, the US will print its ISM non-manufacturing PMI report and possibly show a climb from 53.7 to 54.3. However, if the report disappoints or fails to impress, the dollar could lose ground.

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Stochastic is already in the oversold region, suggesting that the pair could be ready to bounce soon. Bear in mind that most US traders will be off tomorrow, as it is the Fourth of July holiday, so profit taking could take place around nearby inflection points.

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AUD/USD Break and Retest Day Trade (July 4, 2013)

Postby katetrades » Thu Jul 04, 2013 6:22 am

AUD/USD has been undergoing heavy selling pressure, but it appears the pair has found support around the .9100 area. It could pull up for a quick retracement before the selloff resumes.

Using the Fibonacci retracement tool on the 1-hour time frame shows that the 50% Fib lines up with a former support level at the .9150 minor psychological handle. Stochastic has already reached the overbought region but doesn’t appear ready to head back down yet, which suggests that bulls could still push AUD/USD a bit higher.

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A short order at .9150 with a stop above the 61.8% Fib and a target of .9100 could yield a good reward-to-risk ratio for a day trade. There are no reports due from the US, as traders are off on their Fourth of July holiday.

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Revisiting the NZD/USD Range (July 5, 2013)

Postby katetrades » Fri Jul 05, 2013 5:39 am

The NZD/USD range on its 1-hour time frame is still intact, as the pair just made a test of resistance this time around.

The pair has been moving between the .7700 area as support and resistance around .7830. The pair jumped to the top of the range but quickly turned as stochastic headed back down. The oscillator is still headed south, which suggests that Kiwi bears are in control of price action.

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If that’s the case, NZD/USD could make another test of the bottom of the range near .7700. That’s more than 100 pips from its current levels and a tight stop above the previous day high could yield a good reward-to-risk ratio for a day trade.

Bear in mind though, that the US will be releasing its NFP report in today’s US session and that US traders are just about to return from their Fourth of July holiday, which could mean additional volatility for this pair.

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USD/CAD Rising Channel Setup (July 8, 2013)

Postby katetrades » Mon Jul 08, 2013 6:35 am

The Loonie has been edging lower against the U.S. dollar gradually, as the pair has formed a shallow rising channel on its 1-hour time frame. The pair is currently testing the top of the channel, with stochastic pointing down and suggesting that a slight selloff could be in the works.

If that’s the case, USD/CAD could fall back to the bottom of the channel around the 1.0500 major psychological support before resuming its climb to the 1.0600 area. A tight stop above the previous highs could yield a good reward to risk ratio for a day trade.

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There are no major reports due from the US today but Canada will be printing its building permits data and BOC business outlook survey. Upbeat results could allow the Loonie to bounce back against the dollar, at least for the day.

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GBP/USD: Major Correction (July 9, 2013)

Postby katetrades » Tue Jul 09, 2013 7:11 am

Thanks to the dovish BOE rate statement, GBP/USD suffered a sharp selloff last week. The pair plummeted more than 400 pips, as it fell from the 1.5300 handle to below 1.4900 towards the end of the week.

This sudden drop could mean that a large correction might take place before the downtrend resumes. The pair could pull up to the 1.5000 area first, which is close to the 38.2% Fibonacci retracement level. A larger retracement could mean a pullback all the way to the 61.8% Fib, which is close to the 1.5150 minor psychological resistance.

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There are no major reports from the US today but the UK has its manufacturing production due. A rebound of 0.5% is expected and this might be enough to take GBP/USD a little higher for the day.

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USD/CAD: FOMC Minutes Setup (July 10, 2013)

Postby katetrades » Wed Jul 10, 2013 6:15 am

USD/CAD is trending higher on its 1-hour time frame after it found support around the 1.0500 area. The Loonie is currently being supported by the rise in oil prices, which was spurred by the conflict in Egypt, but this could change once the FOMC meeting minutes are released.

In their latest statement, the Fed talked about their plan to reduce bond purchases by the end of the year and possibly end their stimulus program in the middle of 2014. This sparked a huge dollar rally, especially since this was followed by strong U.S. economic figures.

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The minutes should shed light on how strongly the policymakers feel about reducing bond purchases. Strong support from most Fed officials could boost the dollar during the release at 7:00 pm GMT.
USD/CAD could bounce from the bottom of the channel at 1.0500 and climb back to the top and even break higher. Stochastic is already in the oversold region, suggesting a potential bounce could take place soon.

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Major Correction on USD/JPY (July 11, 2013)

Postby katetrades » Thu Jul 11, 2013 6:45 am

USD/JPY suffered heavy selling pressure in yesterday’s trading when the FOMC meeting minutes revealed that not all Fed officials are in agreement with Bernanke’s tapering schedule. The minutes showed that some policymakers are still waiting to see significant improvements in the labor market before considering a reduction of bond purchases.

On its 4-hour time frame, USD/JPY appears to be finding support at the 98.50 minor psychological level. This is in line with the 38.2% Fibonacci retracement level.

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Stochastic is in the oversold region, suggesting a potential bounce could take place soon. At the same time, a bullish divergence has formed when you connect the previous low from the middle of June.

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