Daily Forex Commentary

Majors: Japanese economic growth data beat expectations of an increase in year to date GDP to around 3.5% coming in at a whopping 4.6% during Q4 2009. The weak Yen helped exports and with improvements in global demand mainly led by China also playing a big role growth in the region beat economist forecasts. Despite the positive news the JPY weakened against the USD trading to 90.20 in Asian trade as many analysts expect the rise in GDP to be relatively short lived. With little in the way of offshore economic data for direction overnight it emerged that the Greece finance ministry had entered into interest rate swaps as a means to defer interest payments by several years, a common practice however one that cast some doubt as to the true debt burden. The news hit risk appetite with EUR/USD trading to a low of 1.3580 on two occasions, down from its overnight peak around 1.3635. With the U.S scheduled back from a long weekend this evening and more comments from EU officials likely to emerge the volatility is expected to increase once again as EUR/USD continues to edge closer to 1.35.

Candlestick Summary - EUR/USD

We initially sold EURUSD at 1.4881. Prices are have stalled near our fourth revised profit target, finding support at the bottom of a falling channel established from the swing high in early December. Positive RSI divergence hints that an upswing to the channel top just above the 1.40 level is likely from here. We see this as corrective and will remain short, revising our profit target slightly lower to 1.3651 with a close below that level signaling the next leg of the down move. A stop-loss will be activated on a daily close above 1.4251.

Bias: Bearish

Elliott Wave Bias - NZD/USD

The NZDUSD has found resistance at the confluence of the 61.8% retracement / short term trendline.  The rally from 6804 is in 3 waves (corrective…looks like a double 3), which leaves the NZDUSD vulnerable.  The next major support for the NZDUSD is not until 6600.  A Fibonacci confluence at 6365-6465 serves as a bearish objective.

Bias: SHORT

Elliott Wave Bias - AUD/USD

After breaking below the December low, the AUDUSD has found strong support from the confluence of the 200 day SMA / channel support.  A break of this area is required to inspire confidence in the bearish bias (against 8935).  If the decline from 9055 is a 3rd wave, then the decline should extend to at least 8400, which is the 161.8% extension of wave 1. 

Bias: SHORT

Elliott Wave Bias - USD/CAD

The USDCAD is toying with me.  Having been convinced that an expanded flat was complete, I was proved wrong when the pair dropped below 10540.  However, I maintain a longer term bullish bias against 10223.  Support should be strong at 10415, which is former resistance and the 61.8% retracement.  It is also possible that the USDCAD will not make it to that level as the pair has found support at the former 4th wave zone.  Long term traders can establish longs against the January low but short term traders should await clarification of the near term picture. 

 

Bias: Flat

Elliott Wave Bias - USD/CHF

The USDCHF has held trendline support.  The line is unorthodox in that it connects 2nd waves at multiple degrees of trend.  11026-11091 is a target area.  Favor the upside against 10607. 

Elliott Wave Bias - GBP/USD

The GBPUSD broke its diamond top last week and the trend is down against 16076.  The rarity and reliability of the diamond pattern makes the break especially bearish.  Given the 3rd of a 3rd count from 16464, the first Fibonacci confluence is not until 14714/62.  The reversal occurring at the 38.2% / Elliott channel resistance strongly favors the idea that the rally is a 4th wave.  15338 is where wave v (if it is a v) would equal wave i.  Favor the downside.

Elliott Wave Bias - USD/JPY

The USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level.  Still, a larger correction may underway since the decline from 9380 is not impulsive either.  8832 and 8736 are potential supports.  A rally above 9130 is required in order to turn bullish.  Cautiously favor the downside against that level at this point.

Elliott Wave Bias Chart - EUR/USD

The EURUSD decline below 13584 gives credence to my argument that the pair is in “a 3rd of a 3rd wave…an objective is 13081 (161.8% extension).”  Keep risk at 13842 and 13700 should provide resistance if needed.  Use the unorthodox channel as a point of reference.  Price is now below the midpoint of the channel, which is bearish.

GBP/USD Free Forex Signal, 15 Februar 2010

 

 

Symbol: 

GBPUSD

Forecast High: 

1.5820

Forecast Low: 

1.5505

Entry Sell: 

1.5649

T/P Sell: 

1.5632

T/P Sell: 

1.5602

S/L Sell: 

1.5699

Free signal EUR/USD, 15 Februar 2010

Symbol:
EURUSD
Forecast High:
1.3771
Forecast Low:
1.3457
Entry Buy:
1.3626
T/P Buy:
1.3673
S/L Buy:
1.3576

GBP/USD: The 1.5830-1.6000 Levels To Cap Recovery

GBPUSD: Consolidation to corrective price action dominated most of GBP’s activities the past week pushing it a higher close at 1.5697. This is coming on the back of its decline  off its 2009 high at 1.7041. While that continues to be seen, we expect its resistance zone between the 1.5830 and 1.6000 levels(Dec 30’09/psycho level) to contain corrective strength if tested. This should reverse the pair back down in line with its broader medium term downtrend. Further out, overhead resistance is located at the 1.6068 level, its Feb 03’10 high where a reversal of roles is expected. On the downside, strong support lies at its 2010 low at 1.5532 where a clean penetration will activate the resumption of its medium term downtrend towards the 1.5351 level, its May 12’09 high with a turn below there opening up further downside risk towards the 1.5276 level, its .50 Fib Ret(1.3501-1.7041 rally) ahead of its May 10’09 low at 1.5057.

Weekly Chart: GBPUSD

EUR/USD: Threats To Downside With Eyes On 1.3584/30 Levels

EURUSD: The pair may have closed the week almost flat and printing a hammer candle on the daily chart but while it holds below its Feb 09’10 high/Feb 01’10 low at 1.3838/51 and the 1.4025/28 levels, its Jan 21’10 low/Feb 03’10 high, we see risk to the downside. With that said, the pair retains its broader weakness activated from its 2009 high at 1.5143 and should push towards the 1.3584/30 levels where a break will clear the way for the resumption of its medium term downtrend towards its .61 Fib Ret/May 18’09 low at 1.3422/09 and then its Jun 03’09 low at 1.3211.Its weekly RSI is bearish and pointing lower supporting this view. However, the immediate risk to our analysis will be its Friday hammer print triggering a corrective recovery higher which should target its Feb 10’10 level at 1.3675 at first with a cut through there exposing its Feb 09’10 high/Feb 01’10 low at 1.3838/51. We expect a reversal of roles at this key resistance zone capping further upside gains and turning the pair back down again. Above the latter level if seen will bring the 1.4025/28 levels, its Jan 21’10 low/Feb 03’10 high into focus.

Weekly Chart: EURUSD

EUR/USD: Weak Tone With Eyes On 1.3584/30 Levels

EUR/USD: The pair remains firmly biased to the downside short and medium terms as it continues to target lower prices following its rejection of corrective high at 1.3838 level the past week. As referenced in our past reports, we have our eyes on the downside while EUR trades and holds below its Feb 09’10 high/Feb 01’10 low at 1.3838/51 and the 1.4025/28 levels, its Jan 21’10 low/Feb 03’10 high. Despite its Friday print of a hammer candle (bottom reversal signal) and an almost flat weekly close, the pair retains its broader weakness activated from its 2009 high at 1.5143. In that case, below the 1.3584/30 levels will clear the way for the resumption of its medium term downtrend towards its .61 Fib Ret/May 18’09 low at 1.3422/09 and then its Jun 03’09 low at 1.3211.Its higher level chart studies are bearish and pointing lower supporting this view. However, the immediate risk to our analysis will be its Friday hammer print triggering a corrective recovery higher which could target its Feb 10’10 level at 1.3675 with a cut through there exposing its Feb 09’10 high/Feb 01’10 low at 1.3838/51. We expect a reversal of roles at these key resistance area capping further upside gains and turning the pair back down again, which is consistent with its broader medium term bearishness. Above the latter level if seen will bring the 1.4025/28 levels, its Jan 21’10 low/Feb 03’10 high into focus. On the whole, EUR continues to retain its medium term bearish structure as it looks to weaken further below the 1.3584/30 levels.

EUR/USD - Long Term Market Analysis

EURUSD remains in downtrend from 1.4579. As long as 1.3838 resistance holds, downtrend could be expected to continue and deeper decline to 1.3400 area to reach next cycle bottom on daily chart is possible next week. However, next cycle bottom is nearing, a break above 1.3838 key resistance will confirm that a cycle bottom has been formed and the fall from 1.4579 has completed.

For long term analysis, EURUSD has formed a cycle top at 1.5144 level on weekly chart. Fall towards 1.3000 area to reach next cycle bottom is expected in next several weeks.

GBP/USD - Long Term Forex Market Analysis

After breaking below 1.6708 support, GBPUSD traded in a narrow range for several days. Deeper decline is still in favor after consolidation and next target would be at 1.5200-1.5300 area. Resistance are at 1.5780 and 1.5950. Key resistance is now at the falling trend line from 1.6875 to 1.6456, only a clear break above the trend line resistance could indicate that the fall from 1.6875 has completed.

For long term analysis, GBPUSD is in bearish movement from 1.7042. Move to 1.5000 area is expected in next several weeks.

AUD/USD - Long Term Forex Market Analysis

AUDUSD formed a cycle bottom at 0.8577 level on daily chart. Bounce to 0.9100-0.9150 area is expected after consolidation. Key support is now at 0.8577, only fall below this level will indicate that the downtrend from 1.9327 has resumed, then another downward movement could take price to 0.8000 area.

For long term analysis, AUDUSD might be forming a cycle bottom at 0.8577 level on weekly chart. Rise towards 0.9800 area is possible in next several weeks.

USD/JPY - Long Term Forex Market Analysis

USDJPY stays in a falling price channel and remains in downtrend from 93.75. As long as the channel resistance holds, we'd expect downtrend to resume and one more fall to 88.00 to reach next cycle bottom on daily chart is possible next week. However, a clear break above the channel resistance will indicate that a cycle bottom has been formed and the fall from 93.75 has completed, then bounce to 92.00-92.50 area could be seen to follow.

For long term analysis, USDJPY has formed a cycle bottom at 84.82 level on weekly chart. Bounce towards 100.00 area is expected after consolidation.

USD/CHF - Long Term Forex Market Analysis

USDCHF's uptrend extended further to as high as 1.0827 level. Further rally is still possible next week and next target would be at 1.0900 area. However, a breakdown below 1.0608 will indicate that a cycle top has been formed on daily chart and the uptrend from 1.0132 has completed, then pullback towards the uptrend line from 1.9917 to 1.0132 could be seen to follow.

For long term analysis, USDCHF has formed a cycle bottom at 0.9917 level on weekly chart. Bounce towards 1.1000 to reach next cycle top is expected.

USD/CAD - Long Term Forex Market Analysis

USDCAD dropped sharply from 1.0779, taking price back to range trading between 1.0206 and 1.0852. A cycle top has been formed at 1.0779 level on 4-hour chart. Deeper decline to 1.0300-1.0350 is expected in a couple of weeks.

For long term analysis, USDCAD had formed a cycle bottom at 1.0206 level on weekly chart. Range trading between 1.0206 and 1.0852 would more likely be seen in next several weeks.