Archive For "July, 2008"

7-21-08

3:21a GMT – The USD/JPY appears to have technically entered a bear channel on the 4H charts (and possibly on the dailies though a close below 103.60 is needed to confirm) and the price action has once again crashed against and bounced off of this resistance (blue line on chart below). Additional technical resistance can be seen at 107.55.  As such I expect a return to the downside.

Trading Idea: Shorts favored below 107.05 with targets at 106.10, 105.75 and 105.25. If resistance is broken look for a test of 107.25 and 107.55.

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7-18-08

7:36a GMT – EUR/USD remains mildly bullish on the daily charts after closing higher than the previous day’s close though the pair is caught in a tight range currently between 1.5890-1.5815. The daily charts remain slightly overbought and leave quite a bit of room for further correction, possibly all the way down to 1.5615 (purple line on 4H chart below is daily support trendline). However with dailies mildly bullish and the 4H caught in a bullish channel my trading direction will remain to the upside. Tight stops will be used as signals are definitely mixed. Red lines show daily support/resistance.

Trading Idea: longs favored above 1.5815 with targets at 1.5875, 1.5895 and 1.5930. If support is broken look for a challenge of 1.5755.

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7-16-08

19:34 GMT – EU dropped today on a strong US stock performance and a declining price of oil. However, I view the drop as a temporary correction and expect the longs to pick back up again at this discounted price. Multiple levels of support can be found between 1.5780 and 1.5755 on the technical charts and I expect these to hold as more buyers are found.

Trading Idea: Longs favored above 1.5755 with targets at 1.5780, 1.5835, 1.5890 and 1.5950.

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7-16-08

1:49a GMT – Bad news for the US stock market, real estate industry and the economy in general have sent the USD sharply down across the board, blowing out stops across the currency pairs. The GBP/USD was no exception and we have seen the cable advance over 300 pips against the greenback. News for the British economy is not great either as they look to balance inflation with slowing growth and at a minimum I am looking for the pair to consolidate gains in the coming days as it crashes off the channel resistance (top red line below). The RSI also just recently crossed back from overbought (70) on the 4H.

Trading Idea: Short positions below 2.0175 are favored with targets at 2.0085, 2.0000, 1.9935 and 1.9850.

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7-15-08

6:00a GMT – After a devastating week for the USD (and its economy in general) the GU pair has risen to a strong resistance area between 1.9990-2.0005. While the scope of the USD recovery will hinge on economic data coming out of the US and the performance of the stocks tomorrow I see this resistance area putting up a fight and possibly sending the pair back down.

Trading Idea: Shorts favored below 2.0005 with targets at 1.9980, 1.9950 and 1.9915.

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16:13p GMT – US Stocks took a beating today mainly on the freefall of Fannie Mae and Freddie Mac prices. Investors finally started to feel that the downfall of the two was imminent and therefore a bailout by the government was inevitable. Such a move would be a very bad sign for the US economy and would render billions of dollars of shares nearly worthless. Friday’s are usually bad days for US stocks anyways, and coupled with high oil we saw widespread selling across the major indexes. The result was a weak US dollar across the board, knocking out support and resistance levels.

7-11-08

5:25a GMT – GBP/USD remains bearish both on the daily and 4 hour charts so I am looking for selling opportunities. I expect resistance to hold below 1.9850 for a return down to the 1.9675 area.

Trading Idea: Look for bearish candlestick confirmations for the pair as it approaches resistance area, with short targets at 1.9775, 1.9745 and 1.9675.

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7-10-08

4:22a GMT – The UJ pair presents a pretty technically sound bullish picture as the pair has been in a pretty steady uptrend since mid-March on daily and 4 hour charts. Current support is between 106.50 and 106.25, between which may offer some good entry points.

Trading Idea: Look for a bullish reversal candlestick to confirm the trade with long targets at 106.95, 107.35 and 107.65. I support is broken look for a return to lower support between 105.50 and 105.25.

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7-10-08

4:07a GMT – EUR/USD continues to give off mixed signals as traders look for a direction in the market. Support at 1.5755 was able to fight back the rise of the Euro on a horrible day for the US stock market, most likely on better than expected results with Oil prices. To add to the confusion a hidden bullish divergence (where the price makes higher lows and an oscillator – in this case the RSI – makes lower lows) has appeared on the four hour charts which could mean more Euro gains. I still like short positions on this pair as long as the pair does not close well above resistance between 1.5755 and 1.5765.

Mixed signals are beginning to break down on the daily charts as well, though monthly and weekly still show a bullish bias.

Trading Idea: Short targets below 1.5765 at 1.5715, 1.5675 and 1.5635.

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7-9-08

00:32a GMT – EUR/USD still remains bullish on the daily charts and I am looking for selling opportunities on the 4 hour and 1 hour charts. Current resistance levels are 1.5715 and 1.5755.

Trading Idea: Between 1.5715 and 1.5755 look for a bearish reversal candlestick signal to confirm the trade. Short targets are 1.5675, 1.5615 and 1.5570.

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