USD/CAD Intraday Technical Analysis and Trading Recommendations for August 30, 2012

The USD/CAD pair was trading in oversold position within a wide range bearish channel which is depicted on the chart in red, when the pair broke through the upper limit of the short term bearish channel presented on the chart in Blue indicating a possible bullish retracement towards price level of 0.9970 seen on Wednesday with two successful retestings of the backside of the broken channel at 0.9888 then at 0.9845 on Tuesday.

Breakout above the bearish Blue channel gives the opportunity for the USD/CAD pair to visit the upper limit of the longer term channel around the price level of 1.0025 as long as the pair is trading within the current consolidation range above 0.9845. However, the pair found resistance around price level of 0.9945 which pushed the USD/CAD pair to the backside of the broken channel 0.9845 again before further continuation of the bullish movement.

Price level of 1.0025 corresponds to Fibonacci levels of 50% and 78.6% of the most recent two bearish swings. That's why price action should be watched there for a valid long term SELL entry with SL located above 1.0080.

GBP/USD Intraday Technical Analysis and Trading Recommendations for August 30, 2012

The GBP/USD pair has resumed its bullish movement recording a higher high last Thursday at 1.5912 after breaking through 1.5750 and reaching the upper limit of the depicted channel which served as supply zone for the pair.

GBP/USD bullish movement was maintained within the depicted movement channel. However, on Friday the market witnessed some expected bearish retracement which was seen on Tuesday too.

The lower limit of the movement channel as well as the significant Support level, located between 1.5750-1.5770, were tested showing a strong bullish price action which indicated a valid low risk BUY entry as expected with SL located below 1.5700.

The most significant Resistance level is located around 1.5910; this price level was tested last week expressing obvious bearish reaction which pushed the GBP/USD pair towards the lower limit of the depicted movement channel yesterday. That's why bullish movement should break through this level in order to make other bullish swings.

Breakthrough above price level of 1.5850 is essential today in order to reach the next resistance level at 1.5910.

USD/CHF Wave Analysis for August 30,2012

USD/CHF Elliott Wave

Since our last analysis the USD/CHF pair was trading in a downward move like we expected, developing impulsive (3) wave of the bigger (5) wave (coloured purple). Yesterday during the European and New York sessions we could observe a descending movement from 0.9635 towards the 0.9547 level and we can consider this move as confirmation of our count. At the moment this major pair is trading around 0.9565 level and we are expecting to see the price around 0.9455 level soon. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (0.9660-0.9538-0.9634), with Take Profit at 0.9457 (161.8% of wave 1). To reduce the risk, we can use resistance point at 0.9595 level as Stop Loss. Also it is necessary to monitor the U.S. Unemployment Claims, Core PCE Price Index m/m and Personal Spending m/m data that can change the rate of the pair.

Support and Resistance

(S3) 0.9533 (S2) 0.9549 (S1) 0.9559 (PP) 0.9576 (R1) 0.9592 (R2) 0.9602 (R3) 0.9619

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.9550 with Stop Loss 0.9595 and Take Profit 0.9457 are recommended.

EUR/USD Wave Analysis for August 30, 2012

Wave Analysis:

During yesterday's trading session, EUR/USD failed to get over 1.2570 which resulted in price drop towards the lower line of the uptrend channel. Thus, the currency pair is of wait-and-see attitude which enables the growth within the boundaries of wave 5. In case of negative news, the pair may resume its downward move towards 24-level figure. Given that, indicators demonstrate unstable balance in which the market can operate till Bernanke’s speech on Friday.

Targets for Down Wave 1 or a:

1.2521 – 23.6% Fibonacci

1.2478 – 38.2% Fibonacci

Targets for Wave 5 into 5:

1.2568 – 161.8% Fibonacci

1.2613 – 200.0% Fibonacci

Summary and Trading Recommendations:

The most probable outcome is the continuation of the uptrend channel which was formed in 5 wave. Wave 5 into 5 may also continue its move enabling the rise towards 1.2568 and 1.2613 which is equal to 161.8% and 200.0% Fibonacci. The uptrend channel indicates the upward trend area, fixing below which will indicate a stronger downward move. After 5 into 5 wave formation, the pair may start going down under 1 or a wave which may push the currency pair lower towards 1.2521 and 1.2478 which is equal to 23.6% and 38.2% Fibonacci.

EUR/USD Intraday Technical Analysis - August 29, 2012

Yesterday the spot rate bounced off to the lower limit of its short term bearish channel at 1.2470 and is testing now the upper limit of this one at 1.2580 suggesting a decline. However, a break of these levels will release a good potential and initiate a bullish channel.

Technical indicators provide sell signals and until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase of these days. Stabilization is expected in a short term.

As the spot rate tests the upper limit of its channel, we recommend 2 scenarios: the first one is the hypothesis of a decline where we suggest a sell at the level of 1.2580 with the 1st objective at 1.2520 and then at 1.2500. A breakthrough of 1.2600 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 1.2580 with the 1st objective at 1.2640 and then at 1.2660. A breakthrough of 1.2560 will invalidate this scenario.

USD/CHF Wave Analysis for August 29,2012

USD/CHF Elliott Wave

Yesterday the USD/CHF pair was trading in a downward move developing impulsive 5 wave (coloured purple) of the bigger wave 3 (coloured blue). During the European and New York sessions we could observe a descending movement from 0.9626 towards the 0.9547 level and we can consider this move as the end of the (1) wave (coloured black) of the bigger 5 wave (coloured purple). At the moment this major pair is developing corrective (2) wave (coloured blue) and we are expecting to see continuation of the bearish mood today. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (0.9798-0.9699-0.9767), with Take Profit at 0.9416 (161.8% of wave 1). To reduce the risk, we can use invalidation point at 0.9635 level as Stop Loss. Also it is necessary to monitor the CHF KOF Economic Barometer and U.S. Prelim GDP q/q, Pending Home Sales m/m, Crude Oil Inventories, Beige Book data that can change the rate of the pair.

Support and Resistance

(S3) 0.9439 (S2) 0.9493 (S1) 0.9526 (PP) 0.9580 (R1) 0.9613 (R2) 0.9667 (R3) 0.9700

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.9560 with Stop Loss 0.9635 and Take Profit 0.9416 are recommended.

GBP/USD Supports and Resistances for Wednesday, 29 August, 2012

On 28th of August the British pound demonstrated a healthy deviation.

Having dropped against the dollar, the British currency then was trying to recover its positions during the Asian session. It managed to climb to week highs near 1.5837 and interrupted its 3-day fall.

At the end of the day the price was near VAL 1.5754 and VAH 1.5807. POC was in 1.5789 area.

Forecast for Today:

During the Asian session, the pound was trading in the narrow price range against the dollar.

In case of the following upward movement, the first resistance level will be at VAL of 24 August – 1.5823. From that level the growth will extend towards POC of 1.5861 and then to VAH of 24 August – 1.5897.

The most conservative longs will be up to VAL of 16 May – 1.5906.

In case of downward movement, the first support level will be placed at POC of 27 August – 1.5808. From this level the fall will extend towards yesterday’s POC of 1.5789 and then towards POC of 21 August – 1.5760, after that to POC of 16 August - 1.5737.

The most conservative shorts will be at POC of 20 August – 1.5707.

USD/JPY Forecast August 28, 2012, Technical Analysis

The USD/JPY pair had a very quiet session on Monday, in order to form a very neutral candle. We are sitting on top of support though, and as such it looks like a break to the upside would be an excellent opportunity to buy this pair that looks so consolidative. With this being said, we think that the 78 handle will continue to be protected by the Bank of Japan, and as a result will buying this pair as opposed to sell it.

We do see the 80 handle as massive resistance though, and as such are looking this only as a range trade. We don’t think this pair breaks out anytime soon, but if he gets above the 80.60 level, we see a move to 84 happening. If for some reason the market breaks down below the 78 handle, we think that the first signs of support should be bought as the Bank of Japan will certainly intervened sooner or later.

GBP/USD Forecast August 28, 2012, Technical Analysis

The GBP/USD pair attempted to rally during the Monday session, but fell off and managed to break down well below the 1.58 level. This is a very bearish sign as the day is closing out the session forming a shooting star, and now we have to pay serious attention to the 1.57 level if this level gives way, this would become a false breakout of a massive triangle – which is a massively bearish sign.

We still see no reason to panic at this point in time, as this is more than likely just going to be a pullback. On a supportive candle between here and the 1.57 level, we are very comfortable going long. Again though, if we get a daily close sub 1.57, this could be a market that would be worth selling.

USD/CAD Forecast August 28, 2012, Technical Analysis

The USD/CAD pair fell during the session on Monday, but managed to bounce in order to form a hammer by the end of the trading day. Interestingly enough, the oil markets looked relatively weak on a day that a massive tropical storm was heading towards many of the major refineries in the Gulf of Mexico. In fact, the storm is expected to be a level I hurricane by the time it hits land, and this should have in fact on refinery capacity.

However, it looks like the market may be read pricing the idea of quantitative easing coming out on Friday from the United States. With the Jackson Hole, Wyoming meeting on Friday that features a statement by Federal Reserve Chairman Ben Bernanke still lurking in the background, the markets may actually start to put a bid in for the US dollar as many are starting to rethink whether or not quantitative easing will be announced this week.

This pair is highly sensitive to this kind of action, as the Canadian economy is so dependent on the United States for its exports. In fact, Canada exports over 85% of the goods it sends out of the country to the Americans, and of course what happens in America is massively important to Canada as a result. With this being said, if the Dollar starts to strengthen we could see a lot of momentum start back up.

Looking at the charts, we are actually at the bottom of a larger consolidation area that extends from 1.04 to the 0.98 level. If we bounce from here, we would simply be continuing the consolidation that the market has been in for several months. In fact, this has been the bottom of the range for the last year, and as not much has changed it is hard to think that the currency should be priced any differently.

On a break of the highs from last week, we are more than willing to go long as it would show a bit of a momentum shift in this market. Obviously we could have fairly tight stops as the 0.98 level must hold as support. As for selling, we will not do it until 0.98 gives way on a daily close.

EUR/USD Intraday Technical Analysis and Trading Recommendations for August 27, 2012

The EUR/USD pair is on its way to test the short term uptrend depicted on the chart after finding resistance around price level of 1.2535.

It's more probable now that the H&S reversal pattern mentioned in the previous article is going to be confirmed.

Confirmation requires 4H closure below 1.2490 which opens a direct target towards 1.2435 then 1.2360.

The lower limit of the movement channel and two important Fibonacci levels & SMA 100 are located between 1.2310-1.2360 (S2 & S3) where price action should be watched for a valid low risk BUY entry with SL located below 1.2230 which corresponds to 78.6% of Fibonacci level.

USD/JPY Forecast August 24, 2012, Technical Analysis

USD/JPY fell during the session on Thursday as the “risk off trade” continued. The pair looks like it is trying to find some type of support in that general vicinity and this of course makes sense as the 78 handle has been so important. By the end of the Thursday session, we have printed a very neutral candle.

The candle is in the epicenter of a massive support area between 78 and 78.75 roughly. This area has been protected by the Bank of Japan from various reports, and as such we are willing to take a long position on the first supportive candle that we see. This means that a break of the Thursday highs would be good enough for us to go long, as would any type of hammer or bullish engulfing candle a little below where we are now.

As for selling this pair is concerned, the Bank of Japan would certainly get involved in this market if the price was the fall below 78. Because of this, we will not sell this market even if it breaks below this area. In fact, we are willing to buy supportive candles below with even more vigor than the ones in this general area.

Going forward, 80 should be significant milestone in this currency pair, followed by the 80.60 level. If we can get above both of those there’s a good chance that we end up in the 84 area before it is all said and done. Above that level and we are talking a long-term buy-and-hold type of situation.

It should also be said that this pair is ideal for the short term trader, as there is so much volatility in a tight range that we can perhaps pickoff 20 to 30 pips at a time. It isn’t exactly glamorous work, but in the end it all pays the same. Because of all of this, we are not selling this pair, but would rather buy the closer we get to the 78, as we think the consolidation should continue. In fact, there is a little bit of an argument to be made that we could be heading into consolidation between 78 and 80.

USD/CAD Forecast August 24, 2012, Technical Analysis

The USD/CAD pair rose during the session on Thursday, to test the top of the shooting star that was printed on Wednesday. The “risk off” trade seems to be back into play now, and the commodity currencies all got whacked during the session. However, we did not break the top of that shooting star, so there really wasn’t a signal at that moment in time. This would be a countertrend trade, so we will have to be very picky when it comes to buying this pair.

It looks to us that the parity level above will be very resistive anyway, so more than likely it’s going to be prudent to ignore any buy signals. Looking forward, we think that rallies are set up to be faded, and that may be what’s about to happen. We are currently flat of this market, and don’t necessarily feel the need to change that status right now.

GBP/USD Forecast August 24, 2012, Technical Analysis

The GBP/USD pair attempted to continue higher on Thursday, but got old back instead in order to form a hammer. This hammer is essentially anchored at the 1.59 level, and as such it looks like we may be pulling back to confirm the breakout. Because of this, we are looking for some type of supportive candle in the vicinity of the 1.58 handle.

If we do get that supportive candle, we are more than ready to go along of the cable pair, and as such right now we see absolutely no chance of selling this pair.

EUR/USD Forecast August 24, 2012, Technical Analysis

The EUR/USD pair continued to March higher on Thursday, but gave back about half of the gains in order to close near the 1.2550 level. The market looks a little overextended at this point in time, and we are right in the middle of the massive resistance area going to the 1.27 level. With this being said, we think that it is only a matter of time before this pair searched the pullback, but the real question will be whether or not it actually breaks down.

We have yet to determine what exactly has changed in the Euro’s favor, and as such we think there will be a selling opportunity soon. Once we get above the 1.27 level however, we have to change her thesis and start buying. Truth be known, we find is very difficult to believe, but you never know what can happen in the Forex markets. A break below 1.25 would also have a selling.

AUD/USD Forecast August 24, 2012, Technical Analysis

The AUD/USD pair initially rose during the Thursday session, but it must be said that it sold off rather drastically by the end of the day. Looking at this chart, it’s easy to see that there is an uptrend line that the market is banging against currently. The 1.05 level seems to be massive resistance, and as such it seems like we have a real fight on our hands. The candle looks really weak for the Thursday session, and as such there is a possibility of a trend line break. If we get that trend line break, we think that the market will run to the 1.03 level. At that point time, support could be expected.

We think that the gold markets rising should eventually give a lift to the Australian dollar as well, and we find it on that the gold markets did so well during the Thursday session, while the Australian dollar got absolutely pummeled. Sooner or later the correlation will return, and the markets will realign themselves. We think that even if the trend line breaks down, that the 1.03 level should offer enough support that we can serve buying the Australian dollar then. In the meantime, this is going to be a messy pair to trade.

USD/CAD Intraday Technical Analysis and Trading Recommendations for August 24, 2012

The USD/CAD pair was trading in oversold position within a wide range bearish channel which is depicted on the chart in red.

Recently, the USD/CAD pair broke through the upper limit of the short term bearish channel which is depicted on the chart in Blue indicating a possible bullish retracement towards price level of 0.9970 which was confirmed yesterday with successful retesting of the backside of the broken channel at 0.9888.

Breakout above the bearish Blue channel opens the way for the USD/CAD pair to visit the upper limit of the longer-term channel around the price level of 1.0025 as long as the pair is trading above the most recent low around 0.9840.

Price level of 1.0025 not only corresponds to Fibonacci levels of 50% and 78.6% of the most recent two bearish swings, but also corresponds to the upper limit of the long term bearish channel depicted on the chart. That's why price action should be watched there for a possible SELL entry with SL located above 1.0080.

EUR/USD Forecast August 14, 2012, Technical Analysis

          The EUR/USD pair had a bullish session for the Monday trading day, but it did manage to give up quite a bit of its gains in the end. The 1.2350 level continues to hold as resistance, and as such we think that selling this pair may be possible even in these prices.

          Should also be noted that the pair is forming a rising wedge, and that is normally a bearish sign. We would become aggressively short of this pair if we manage to break the lows from the Monday session, and especially so if we manage to break the lows of the Friday session as it would not only show a break of a rising wedge, but also the support that we found at the 1.2250 level area.

          As for buying the Euro, we see absolutely no reason to do so as the Europeans are still dawdling when it comes to the financial crisis. In fact, we think that 1.25 will simply be far too extremely resistive for the pair to rise above it. We are looking for rallies to sell, or even a breakdown as mentioned above to do so as well.

GBP/USD Forecast August 14, 2012, Technical Analysis

          The GBP/USD pair attempted to smash through the 1.57 level on Monday, but was turned around and form a shooting star. Normally, this would have us very bearish of a currency pair, but as you can see on this chart the lows keep getting higher. This suggests to us that there is a significant amount of pressure to the upside in this marketplace, and as such we don’t feel comfortable shorting it.

          Granted, it does look like a nice shorting opportunity at first glance. Perhaps we will see a fall to the 1.56 level, but in the end it just simply seems too difficult to sell the British pound at this moment in time. We still stand by the idea that the 1.58 level is the gateway to much higher prices, and as such that’s essentially what we are waiting for.

          We think the 1.55 will offer massive support, and if that level gives way then we are willing to think about selling the cable pair. Until then though, it looks like any move to the downside will be very choppy and very susceptible the spikes in price. Because of this, we just simply cannot be comfortable at this moment in time.

          It should be noted however, that the 1.58 level should give wait for a move to 1.6 without too much hassle. Once we get out there, we will more than likely see prices as high as 1.62 or even 1.63 and relatively short order. We are approaching the end of the summertime, so we could see that move relatively soon.

          Speaking of the summer, these moves do have to be taken with a bit of a grain of salt. The reason being is that the liquidity is low, and as such as a little easier to move the markets around at times. The main traders for trading desks around the world are more concerned about the beaches in Monaco or even the Seychelles instead of what’s going on in their offices in London. With this in mind, we are more than willing to be patient and give the market a couple of weeks to show it’s true colors.

AUD/USD Forecast August 14, 2012, Technical Analysis

          The AUD/USD pair fell during the Monday session and managed to bounce off of the 1.05 support level yet again. This doesn’t seem like much to us, and as such we treated more or less as consolidation of a market that is looking for some type of catalyst to move higher.

          In a world where central banks are firing up the printing presses, commodity currencies will get a bid going into the future and we think that without a doubt the Australian dollar is one of the most interesting currencies from this perspective. It does track well with the gold markets, and as such we think that the two will explode to the upside at the same time.

          What’s most impressive about this currency pair is that although we are in an up trending channel, and have even hit the resistance line, we haven’t fallen – we simply gone sideways. This shows that although there is a bit of exhaustion in the markets right now, there’s nobody willing to step in to start selling aggressively. With this in mind, we are buyers on a break above the 1.06 level.