Chart Of The Day: USD/CAD

7/23/2009 – USD/CAD – Steeply bearish price action within the last couple of weeks on USD/CAD, a daily chart of which is shown, has brought price down from a 38.2% Fibonacci retracement (measured off the long bearish run from 1.3060 to 1.0780) to approach the downtrend lows once again. The major immediate downside support target for the current bearishness resides in the 1.0800 support/resistance price region, which represents the area of the downtrend lows. Any substantial breakdown below that level would confirm a downtrend continuation potentially targeting further key support around 1.0550.

James Chen
Chief Technical Analyst

FX Solutions

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(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance lines in yellow; 200-period simple moving average in light blue.)

FX Thoughts for the Day

USD-CHF @ 1.0695/0699…Seeking Direction

R: 1.0720-26 / 1.077-89
S: 1.0647 / 1.0624-20 / 1.0594

Swiss has risen sharply in the Asia session after a pull pack yesterday. It is currently standing at the Resistance formed by 89 period moving average of the Highs in the 4-hourly. It is expected to take support at 1.0681, the much talked about long term support obtained by joining the Lows of 2nd June (1.0590) and 24th June (1.0631) which is also the 38.2% level of today’s rally.

Support at 1.0681 may propel the pair to greater highs of 1.0726 in the coming US session. If however the Support gives in to the bears, the low of 2nd June at 1.0590 can be tested.

Limit Buy Order:

• Buy USD 10K at 1.0660, SL 1.0590, TP 1.0740

Cable GBP-USD @ 1.6510/14…Resistance at 1.6550

R: 1.6550-60 / 1.6600 / 1.6670
S: 1.6460 / 1.6375 / 1.6320

Cable saw a break above 1.6500 during the day. After trading above 1.6500 and recording a high of 1.6544, the pair once again fell below 1.6500 and is now trading just above 1.6500. On the upside 1.6550 is a significant level to watch for now. A break above this level may see the pair testing 1.6600, the upper end of the range (1.6200-6600) in which it has been trading for some time.

On the downside the 21-MA on the 4-hr (1.6461) is a significant level to watch for. The pair has not seen a strong break below this Support level during the day. A strong break below this Support at 1.6461 might pull the pair down towards 1.6375-6350 in the coming sessions.

Holding:

• GBP 10K Short at 1.6460, SL 1.6550, TP 1.6320

Aussie AUD-USD @ 0.8176/79…Bearish outlook

R: 0.8206 / 0.8257
S: 0.8131-24 / 0.8088-76 / 0.8043

Aussie tried to break the top of the range and rose till 0.8206 (the first resistance mentioned before). However similar to what happened yesterday it has entered back into the range (0.8108-0.8180) in which it has been trading for 3 weeks now.

As for the US session, we expect the pair to touch the Support of 0.8131 if the bearishness continues. A sharp fall and break below 0.8131 can catalyze downward momentum, which can lead the pair to 0.8108 (which is the bottom of the range) and 0.8043 (which is a major horizontal Support – joining recent tops in the 4-hourly). On the upside, the trend is losing its momentum yet a movement above the current levels should be stalled at 0.8206 or 0.8257 (which is a major Resistance)

Kshitij Consultancy Service
http://www.fxthoughts.com

Legal disclaimer and risk disclosure

These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

FX Thoughts for the Day

USD-CHF @ 1.0695/0699…Seeking Direction

R: 1.0720-26 / 1.077-89
S: 1.0647 / 1.0624-20 / 1.0594

Swiss has risen sharply in the Asia session after a pull pack yesterday. It is currently standing at the Resistance formed by 89 period moving average of the Highs in the 4-hourly. It is expected to take support at 1.0681, the much talked about long term support obtained by joining the Lows of 2nd June (1.0590) and 24th June (1.0631) which is also the 38.2% level of today’s rally.

Support at 1.0681 may propel the pair to greater highs of 1.0726 in the coming US session. If however the Support gives in to the bears, the low of 2nd June at 1.0590 can be tested.

Limit Buy Order:

• Buy USD 10K at 1.0660, SL 1.0590, TP 1.0740

Cable GBP-USD @ 1.6510/14…Resistance at 1.6550

R: 1.6550-60 / 1.6600 / 1.6670
S: 1.6460 / 1.6375 / 1.6320

Cable saw a break above 1.6500 during the day. After trading above 1.6500 and recording a high of 1.6544, the pair once again fell below 1.6500 and is now trading just above 1.6500. On the upside 1.6550 is a significant level to watch for now. A break above this level may see the pair testing 1.6600, the upper end of the range (1.6200-6600) in which it has been trading for some time.

On the downside the 21-MA on the 4-hr (1.6461) is a significant level to watch for. The pair has not seen a strong break below this Support level during the day. A strong break below this Support at 1.6461 might pull the pair down towards 1.6375-6350 in the coming sessions.

Holding:

• GBP 10K Short at 1.6460, SL 1.6550, TP 1.6320

Aussie AUD-USD @ 0.8176/79…Bearish outlook

R: 0.8206 / 0.8257
S: 0.8131-24 / 0.8088-76 / 0.8043

Aussie tried to break the top of the range and rose till 0.8206 (the first resistance mentioned before). However similar to what happened yesterday it has entered back into the range (0.8108-0.8180) in which it has been trading for 3 weeks now.

As for the US session, we expect the pair to touch the Support of 0.8131 if the bearishness continues. A sharp fall and break below 0.8131 can catalyze downward momentum, which can lead the pair to 0.8108 (which is the bottom of the range) and 0.8043 (which is a major horizontal Support – joining recent tops in the 4-hourly). On the upside, the trend is losing its momentum yet a movement above the current levels should be stalled at 0.8206 or 0.8257 (which is a major Resistance)

Kshitij Consultancy Service
http://www.fxthoughts.com

Legal disclaimer and risk disclosure

These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

USD/CAD Flirts with 1.0950 Support Level

The USD/CAD has been on a steep decline, nearly 600 pips, that has only recently paused because of support from the 1.0950 level.

This is the second time the pair has encountered the 1.0950 level in recent trading, and with pair testing this level several times in the past, we can confirming that there is a substantial amount of strength at the 1.0950 support level.

However, even with the existence of a strong support level, the pair may be headed for deeper waters as the pair is heavily influenced by the price of oil. If the pair is able to continue its downward momentum and oil prices continue to rise, then the chance of a strong break below the 1.0950 is very possible.

Matthew Cherry
TradersChoiceFX - Forex Broker

USD/CAD Flirts with 1.0950 Support Level

The USD/CAD has been on a steep decline, nearly 600 pips, that has only recently paused because of support from the 1.0950 level.

This is the second time the pair has encountered the 1.0950 level in recent trading, and with pair testing this level several times in the past, we can confirming that there is a substantial amount of strength at the 1.0950 support level.

However, even with the existence of a strong support level, the pair may be headed for deeper waters as the pair is heavily influenced by the price of oil. If the pair is able to continue its downward momentum and oil prices continue to rise, then the chance of a strong break below the 1.0950 is very possible.

Matthew Cherry
TradersChoiceFX - Forex Broker

USD/JPY Balances on our 1st Tier Downtrend Line

The USD/JPY failed in its recent attempt to build positive momentum from our 1st tier uptrend line. The currency pair has since fallen back to our 1st tier downtrend line on declining volume. Though the currency pair is trading comfortably above July lows, investors are hesitant in making a larger, necessary commitment to the upside. Japan will release its trade balance late Wednesday and the data will monitored closely by investors. Analysts are expecting further improvement (0.51 trillion) from last month’s surprising 0.22 trillion surplus. However, should the trade balance come in below June’s release, the USD/JPY could be under some near-term selling pressure. Investors should keep in mind last month’s 0.22 trillion surplus was a vast improvement from Japan’s budget deficit since September 2008. Therefore, expecting an increase from 0.22 to 0.51 trillion may be a bit bold. Though we anticipate an improvement from 0.22 trillion, we believe the trade balance number may not live up to expectations. We will just have to wait and see.

Regardless of tomorrow’s trade balance data, the behavior of the S&P futures should have a greater near-term impact on the USD/JPY. If the S&P can manage to break free of 950 and 2009 highs, this could help the USD/JPY strengthen back above its 1st tier uptrend line. A recovery in the U.S. economy trumps Japan’s trade balance since this would imply an improvement in consumption and demand for Japanese exports. On the other hand, a large setback in Japan’s trade balance could strike overall investor confidence since it implies global demand and consumption may not be picking up as much as anticipated. Technically speaking, our 1st tier uptrend and 2nd tier downtrend lines serve as near-term barriers along with the psychological 95 area. As for the downside, the USD/JPY has our 1st tier downtrend line, previously July lows, and the highly psychological 90 level to fall back on.

Present Price: 93.72

Resistances: 93.82, 94.49, 94.99, 95.73, 96.33

Supports: 93.28, 92.90, 92.39, 91.75, 91.36

Psychological: 95, 90

FastBrokers

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