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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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NZD/USD Bullish Pennant (July 29, 2013)

Postby katetrades » Mon Jul 29, 2013 9:18 am

NZD/USD has enjoyed a strong rally last week, as the RBNZ interest rate statement turned out relatively hawkish. Governor Wheeler specified that the central bank might keep rates low until next year only, prompting traders to speculate that a rate hike could be in the cards for 2014.

With that, NZD/USD broke past the .8000 major psychological barrier and reached the .8100 area. At the moment, the pair is consolidating below this level, waiting for a bigger push.

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An upside break from the bullish pennant could mean another 100-pip rally to the .8200 handle or higher. On the other hand, a downside break could trigger a test of the .8000 former resistance.

Stochastic is still pointing up, which suggests there’s still enough upward momentum.

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AUD/USD Approaching Range Support (July 30, 2013)

Postby katetrades » Tue Jul 30, 2013 6:49 am

The range on AUD/USD is still holding for now, as the pair found resistance at the .9300 major psychological level earlier this week. The pair is now on its way to support around the .9050 minor psychological level.

Stochastic is in the oversold region, suggesting that a bounce might take place soon. There are no major reports from Australia today, which means that the ranges could hold, unless there’s a huge shift in market sentiment.

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As for the US, only the CB consumer confidence and the S&P/CS house price index are up for release and these aren’t expected to cause wild price swings.

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Trading GBP/USD for the US GDP Release (July 31, 2013)

Postby katetrades » Wed Jul 31, 2013 8:34 am

GBP/USD retreated from its recent highs during yesterday’s trading, and this may have been a result of profit-taking ahead of today’s major US events.

The US Advanced GDP reading is up for release and the economy is expected to have grown by 1.1%, slower than the previous 1.8% expansion. Take note that the Q1 GDP reading was already revised lower from the initial estimate of 2.2%.

A weaker than expected reading would therefore be very negative for the dollar as it would remind traders that the economy is still weak and might not survive with less stimulus.

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GBP/USD seems to be finding support at the 38.2% Fib, which is in line with an area of interest and the 1.5200 major psychological level. A bounce could take the pair up to its recent highs around 1.5400.

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AUD/USD: Waiting for a Retest (August 1, 2013)

Postby katetrades » Thu Aug 01, 2013 11:23 am

AUD/USD has finally broken below its recent range, with resistance at .9300 and support at .9050. The pair has dipped below the .900 handle but it could still make a retest of the former support before heading any lower.

Stochastic has been in the oversold region for quite some time already, which suggests a potential move up. However, given the weak Chinese and Australian fundamentals, the downtrend could remain intact.

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The .9000 to .9050 levels form a good sell zone as one could aim for new lows if the selling pressure remains very strong.

By Kate Curtis from Trader's Way
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NFP Setup: USD/CHF Retest (August 2, 2013) Dollar strength

Postby katetrades » Fri Aug 02, 2013 7:18 am

NFP Setup: USD/CHF Retest (August 2, 2013)

Dollar strength is still persistent, as USD/CHF already broke above the falling trend line on its 1-hour time frame. This suggests that a new trend is about to form, but that price might pull back first before heading any higher.

Using the Fibonacci retracement tool on the USD/CHF 1-hour chart shows that the Fibs are in line with the broken trend line. In particular, the 38.2% Fib level is in line with an area of interest, which has acted as support or resistance in the past.

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Stochastic is in the overbought region for now, suggesting that the dollar bulls are running out of steam. Strong US NFP figures could revive the dollar rally later on though.

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AUD/USD: Rate Cut Retracement (August 6, 2013)

Postby katetrades » Tue Aug 06, 2013 9:15 am

The Reserve Bank of Australia cut interest rates by 0.25% during their monetary policy statement today and, judging from AUD/USD’s reaction, this was expected by most market participants.

However, a rate cut is still a rate cut. In comparison to the Fed which is looking to reduce stimulus soon, the RBA is still more dovish, which could mean that AUD/USD could continue to trend lower.

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A short trade around the .9000 to .9050 former support area could be a good entry. Aiming for the recent lows or for new lows with a 50-pip stop would yield a high reward-to-risk ratio. Stochastic isn’t in the overbought region yet, which suggests the pair could pull up higher before resuming its drop.

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USD/JPY: Support Turned Resistance (August 8, 2013)

Postby katetrades » Thu Aug 08, 2013 9:42 am

USD/JPY just broke below a key support level, as dollar weakness continued to dominate price action in yesterday’s trading. After that strong drop though, USD/JPY might retrace for a bit before heading any lower.

The Fibonacci retracement levels on the recent swing high and low on the 1-hour time frame show that the 38.2% level lines up with the broken support at 97.70. Stochastic has already reached the oversold region and moved up, suggesting that dollar bears might need to catch their breath first.

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A short trade at 97.70 with a stop above the 61.8% Fib and a target of the previous lows near 96.25 would yield a 1:1 reward to risk ratio.

By Kate Curtis from Trader's Way.
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EUR/USD: Short-Term Trend Setup (August 12, 2013)

Postby katetrades » Mon Aug 12, 2013 8:18 am

EUR/USD is still in a strong uptrend on its 1-hour time frame, as seen from the rising trend line that connects the price’s lows. It appears that another test of the trend line could take place within the day, as the pair has retreated upon reaching resistance at 1.3400.

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The 1.3300 major psychological level has acted as a resistance area in the past, which means that it could act as support from now on. It is also in line with the rising trend line.

Stochastic is in the oversold region, suggesting that a bounce is in the cards. A long order at 1.3300 with a 50-pip stop and a target at the previous high of 1.3400 would be a 2:1 trade.

By Kate Curtis from Trader's Way.
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GBP/USD: Trading the UK CPI Release (August 13, 2013)

Postby katetrades » Tue Aug 13, 2013 9:17 am

The UK is scheduled to release its annual CPI reading today and possibly show bleaker inflation of 2.8% compared to the previous 2.9% reading. However, this is still way above the BOE’s 2% inflation target, which should remind traders that the central bank is still closely monitoring the annual CPI readings. Bear in mind that Carney specified that one of the potential considerations for reducing stimulus later on is if inflation is likely to stay above 2.5% for the next couple of years.

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On the 1-hour time frame, GBP/USD looks ready to pull back to the former resistance area around 1.5400. This is in line with the 50% Fibonacci retracement level.

Stochastic is already in the oversold area, hinting that pound bears are tired. This suggests that a bounce could be in the cards, depending on how the CPI figures turn out.

A bounce from the 38.2% or 50% Fib areas could take the pair back up to its recent highs near 1.5600. A stop below the lowest Fib or below 1.5350 would yield a good reward-to-risk for this trade.

By Kate Curtis from Trader's Way.
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GBP/JPY: Middle of the Range (August 14, 2013)

Postby katetrades » Wed Aug 14, 2013 9:14 am

The bottom of GBP/JPY’s 4-hour range held as support yesterday as the pair bounced off the 149.00 area and rallied to 152.00. Right now, GBP/JPY is stalling around the middle of the range, still undecided whether to go up or down.

The UK will release its claimant count change report in today’s London session and this could determine where the pair will trade today. Expectations are of a 14.3K drop in joblessness and a larger than expected decline could push GBP/JPY to the top of the range. On the other hand, an increase in unemployment or a lower than expected decline could trigger another test of the range support.

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Stochastic is already in the overbought region, which suggests that a selloff could be in the cards. However, the oscillator hasn’t crossed down yet so there might still be room for some rally.

By Kate Curtis from Trader's Way.
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