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Forex Forum to Share, Discuss, Communicate and Trade Forex • Daily Technical Analysis by Kate Curtis from Trader's Way
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EUR/USD Ready for a Major Correction? (May 22, 2013)

PostPosted: Wed May 22, 2013 7:38 am
by katetrades
EUR/USD seems to be rebounding from its recent lows nicely as the pair is edged back abve the 1.2900 major psychological level. It’s just a few more pips away from the 38.2% Fibonacci retracement level, which could also act as resistance should the pair keep climbing in today’s trading sessions.

There are a bunch of market catalysts on tap, starting with the euro zone current account release and the German bond auction. Should these events turn out better than expected, EUR/USD could stay supported for the rest of the London session.

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During the US session, the existing home sales report and FOMC meeting minutes will be printed. Around the same time, Fed Chairman Ben Bernanke is set to give a speech and possibly drop some hints on the Fed’s stimulus exit plan. In his previous speeches, Bernanke seems to be in no rush to withdraw quantitative easing and if he does highlight this bias in today’s testimony, the U.S. dollar could continue to sell off.

However, if the FOMC minutes show that majority of Fed officials support the tapering off of asset purchases as early as June, the dollar could regain ground.

Further dollar selling could take the pair up to the 1.3000 major psychological area, which is close to the 50% Fib and a former support level.

By Kate Curtis from Trader's Way

GBP/USD Retracement Scenario (May 24, 2013)

PostPosted: Fri May 24, 2013 7:08 am
by katetrades
The recent correction in GBP/USD is giving pound bears a chance to hop in the ongoing selloff at a better price. The pair rebounded off its recent lows and appears to be making a pullback to any of the Fibonacci retracement levels.

The falling trend line on the hourly time frame is still intact as the 61.8% Fibonacci retracement is in line with the former support level around 1.5175. Stochastic is pointing upwards, suggesting that the pair could head further north before resuming its drop.

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If you’re planning on shorting this pair, set your stop above the trend line or the 1.5200 major psychological level. If the pair resumes its selloff, it could test its previous lows around the 1.5050 minor psychological support and possibly go for new lows closer to the 1.5000 handle.

By Kate Curtis from Trader's Way

USD/JPY Long-Term Retracement (May 27, 2013)

PostPosted: Mon May 27, 2013 6:48 am
by katetrades
After that strong rally that lasted for nearly a couple of months and more than a thousand pips, USD/JPY seems to be in the mood for a major correction.

On the 4-hour time frame, the pair is pulling back to the 99.50 to 100.00 area, which acted as resistance in the past. This is in line with the 61.8% to 50% Fibonacci retracement levels, which could act as support from now on.

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Stochastic is already in the oversold region, suggesting that USD/JPY could rebound soon. The oscillator has also made a bullish divergence from the lows at the start of May.

The BOJ has made no changes to their current monetary policy scheme while the Fed has expressed intention to scale down their bond purchases within the year. This should keep USD/JPY supported in the near term.

By Kate Curtis from Trader's Way

AUD/USD Testing .9600 Weekly Support (May 28, 2013)

PostPosted: Tue May 28, 2013 6:47 am
by katetrades
AUD/USD is once more sitting at a key inflection point, which has been an established support level on longer-term time frames. There is no report scheduled for release from Australia today, as this pair could be driven by U.S. data and market sentiment.

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Gold prices have been dropping lately, and this doesn’t bode well for the Australian dollar. In addition, the U.S. will be printing its CB consumer confidence figure and is expected to show a huge increase in consumer optimism. The figure is slated to rise from 68.1 to 70.7 this month, following better than expected consumer sentiment data from the University of Michigan.

This might be enough to trigger strong dollar buying that could push AUD/USD below the .9600 handle. The last time it broke below a key support level (1.0200), it plummeted by 600 pips.

By Kate Curtis from Trader's Way

USD/CAD Resistance at Rising Channel (May 29, 2013)

PostPosted: Wed May 29, 2013 8:44 am
by katetrades
USD/CAD’s uptrend is still very strong as the rising channel on its shorter-term time frame is still holding. The pair recently found support at the bottom, which is near 1.0350, and bounced right back up when the U.S. printed strong consumer confidence data yesterday.

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The pair could be on its way to test the top of the rising channel, which is near the 1.0450 minor resistance level. Stochastic has already reached the overbought area, which means that sellers could take control of price action soon.

Take note that the BOC interest rate decision is scheduled today, and this event could provide enough volatility for USD/CAD. Downbeat remarks from BOC Governor Carney could trigger a quick Loonie selloff, but this might not last as he is set to step down from office soon.

By Kate Curtis from Trader's Way

USD/CHF Head and Shoulders Pattern (May 30, 2013)

PostPosted: Thu May 30, 2013 8:19 am
by katetrades
On its 4-hour time frame, USD/CHF seems to have formed a head and shoulders pattern, indicating a potential reversal from the pair’s rallies earlier this year.

The Swiss GDP is set for release and the economy is expected to have grown by 0.2% for the first quarter of the year. Later on, the U.S. will release its preliminary GDP report but is expected to make no changes to its 2.5% growth rate.

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However, stronger than expected Swiss GDP and a downward revision in U.S. GDP could trigger a sharp breakdown from the neckline of the formation around .9600. On the other hand, weak Swiss GDP and an upward revision in U.S. GDP could set off a bounce back to the .9700 area.

By Kate Curtis from Trader's Way

USD/JPY Testing Former 99.50 Resistance (June 4, 2013)

PostPosted: Tue Jun 04, 2013 8:03 am
by katetrades
USD/JPY kept selling off in the past few trading days as the Nikkei stock index posted sharp declines. This was enough to push USD/JPY back down from the 103.75 area to 99.50.

This level coincides with a former resistance level, right after the BOJ implemented its massive QE program. It could act as support from now on since it lines up with the 61.8% Fibonacci retracement level.

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Stochastic is moving out of the oversold region, suggesting that the selloff is overdone and that the pair could head back to its recent highs. A stop below the previous day low of 98.86 and a target around 103.00 would be a good reward-to-risk ratio for a short-term play.

By Kate Curtis from Trader's Way

CAD/JPY Rising Channel (June 5, 2013)

PostPosted: Wed Jun 05, 2013 10:36 am
by katetrades
The uptrend of CAD/JPY still seems to be intact as the pair is testing the bottom of the ascending channel on the 4-hour time frame. This area is also around the 96.00 major psychological support.

Stochastic has just moved out of the oversold region and is moving up, suggesting that Canadian dollar bulls are in control for now. If that’s the case, they could push CAD/JPY back to the top of the channel or at least midway around 100.00.

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Canada will be printing its building permits report in today’s U.S. session and is awaiting a speech by new Bank of Canada Governor Poloz tomorrow. Around that time, Canada will also print its Ivey PMI figure and possibly show an improvement from 52.2 to 55.3. On Friday, Canada will release its jobs report. There are no major reports due from Japan for the rest of the week.

Setting a stop below the 95.00 handle with a target of 100.00 would be close to a 3:1 reward-to-risk ratio.

By Kate Curtis from Trader's Way

GBP/JPY Falling Channel (June 26, 2013)

PostPosted: Wed Jun 26, 2013 8:41 am
by katetrades
GBP/JPY is on a short-term downtrend based on its 1-hour time frame. The pair has made lower lows and lower highs, forming a falling channel.

At the moment, GBP/JPY is in the middle of the channel on its way down. Stochastic is moving lower, although it has already reached the oversold area. It hasn’t crossed yet though, which means that pound bears are still in control. The pair could still make its way to the bottom of the channel before bouncing back up.

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The market events for the UK today are the BOE financial stability report and the government spending review. Public sector borrowing has improved in the UK recently, which could suggest that we’d hear upbeat comments from both the central bank and the government. If that’s the case, GBP/JPY could find its way back up sooner or later.

By Kate Curtis from Trader's Way

EUR/USD Short-term Trend Play (June 27, 2013)

PostPosted: Thu Jun 27, 2013 7:25 am
by katetrades
There’s a potential short-term retracement on EUR/USD’s 1-hour time frame which could come into play today. There’s a falling trend line connecting the pair’s recent highs while the 50% Fib is in line with a former support around the 1.3070 area.

A few medium-tier euro zone reports are on tap for today, the biggest of which is the German unemployment change report. After posting a 21K increase in joblessness for April, only a 7K rise is expected this time. A higher than expected figure would mean that the jobs sector is still unstable in euro zone’s largest economy, which could be bearish on the euro.

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As for the US, the core PCE price index and personal spending and income reports are due. The price index could show a small improvement in inflation while personal spending is expected to be up. If that’s the case, the dollar could draw support from good data.

A stop above the 1.3100 major psychological level would yield a good reward-to-risk when shorting this pair.

By Kate Curtis from Trader's Way