Tagged "oversold"

9-8-08

5:50a GMT – GBP/USD is approaching resistance at 1.8000 as the pair saw its first major corrective action in weeks. I will continue to sell the downtrend and will look for selling opportunities on this latest strength. Wait for candlestick confirmation or other technical indicators, however, as the pair is drastically oversold and any bad news out of the U.S. could cause traders to begin covering their shorts.

Trading Idea: Look for short trade confirmations (e.g. bearish candlestick reversals) around resistance at 1.8000 with short targets at 1.7800, 1.7750, and 1.7650. If 1.8000 is broken look for a challenge of 1.8200.

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9-2-08

4:21a GMT – After our last successful short trade on the EU pair we are again looking to sell for another retreat down to 1.4475. Threats to trade are a very oversold level and the weekly/monthly support the pair is currently resting on. Down to 1.4450 would complete a nice double-top reversal and signal further EU losses.

Trading Idea: shorts favored down to 1.4475.

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8-25-08

4:06a GMT – The GBP/USD continues to look negative technically and fundamentally as another key support level was broken at 1.8525. Fundamentally both the GBP and USD are weak however the USD has been supported by strong buys over the past several weeks and the retreating price of oil. Main risk to the technical trade are the oversold levels (pair just crossed back above the RSI 30 on the 4 hour charts) which have cooled off some from a low of 12.

Trading Idea: shorts favored below 1.8565 with targets down to 1.8205.

(click to enlarge)

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8-20-08

3:26a GMT – While daily analysis remains extremely bearish (except that they are heavily oversold) the weekly view offers a different view below. As you can see despite the recent selling of the pair the uptrend remains very much intact and is actually at strong monthly resistance. Yellow trend line below is drawn on the monthly chart if you are wondering why there are some breakthroughs. While my overall bias remains down pending new news out of Europe or the US (after a slight rise to ease oversold levels) this weekly view gives a good amount of reason to pause.

Trading Idea: the best trade here might be no trade until a clear direction is given, however I will be looking for candlestick entry signals near support and resistance levels. On bullish signals I would look for long targets all the way up to 1.5350. On a bearish breakthrough look for short targets down to 1.4475.

(click to enlarge)

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8-19-08

7:05a GMT – Not much has changed in the technical analysis of EUR/USD for the last few days – the pair remains overall bearish with room to run down to 1.4475. The major threat to the trade is that the dailies highly oversold and the market could be primed to consolidate and bounce toward 1.4900 or even 1.5000 on favorable news for the EUR.

Trading Idea: Looking to sell rallies. Looking for candlestick entries on the 4H and 60M and will be looking closely around resistance at 1.4850. Short targets at 1.4700, 1.4650 and eventually I expect a challenge of 1.4475.

(click to enlarge)

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8-18-08

3:26a GMT – The GU pair offers perhaps one of the clearest fundamental pictures with the British economy showing clear signs of slowing and signals that their housing market will continue to deteriorate. Technically, as you might expect with those financial events, the GBP/USD is bearish and the pair has fallen over 1500 pips in the past month. The biggest threat to the downtrend is just how incredibly oversold the pair is on the 4 hour, daily and now the weekly charts. At some point traders will take profits or corporations will form some more substantial resistance.

Trading Idea: Looking to sell rallies once the pair is not oversold anymore, possibly around 1.8850 or even 1.9000.

(click to enlarge)

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8-15-08

6:00a GMT – EUR/USD remains bearish on the charts with a sustained break below 1.5000. Pair is stilling heavily oversold but a few more days of sideways movement should ease that. For those doubting which direction the trend is in the shorter term: the pair has dropped 1300 pips in the past 30 days. Remember – it is easier to ride the trend then to bet against it.

Trading Idea: As long as the pair remains below 1.5000 shorts are favored with targets at 1.4865, 1.4775, and eventually all the back to strong support at 1.4450.

(click to enlarge)

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8-10-08

20:45 GMT – The US dollar made a strong rally last week with the GBP/USD pair falling almost 600 pips in the last 7 days! Several pairs including EUR/USD, USD/CHF and the GBP/USD are at key support and resistance levels leading me to believe that the rise of the US dollar will stall at the least and possibly slighly reversal as overbought/oversold levels are consolidated.

Because of the 600 pip drop I needed to consult the weekly charts (seen below) to find the key support levels as all daily and hourly chart supports were broken. In the long term I expect more USD strength as the economic slowdown catches up to the rest of the world but we will most likely see some overbought USD sales to consolidate the gains.

Trading Idea: Look to sell rallies, possibly in the 1.9450 or 1.9550 resistance areas. Ultimately I see the pair challenging 1.8900 in the coming weeks.

(click to enlarge)

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