Valutne Analize

Recovery Sentiments Pause
Signs of economic rebound continues to pour in. This has been
hurting the greenback and yen. This week however showed some
pause in risk appetite. Rhetoric is shifting towards suspiscion
that the rallies in equities have been overly dramatic, but that
sounds perfectly natural since investors have been out of the
market and have been waiting for a good bottom to get back in.
This leads to oversensitivity to positive news. This dynamic is
reflected in the forex market where many pairs are showing first
signs of reversal from their trends in the previous month.

USD/CAD Shows Signs of Reversal, Confirmation Noted The USD/CAD
pair is showing strong signs of reversal, breaking short-term
resistance and trendlines simultaneously. After double bottoming
around the 1.0800 area (just slightly sooner than anticipated),
the pair reached its minimal pattern breakout projection at 1
.1100. A retest of the double bottom resistance, confirmed that
it has now become a support zone (1.1000). Friday’s action
continues a reversal rally, which we may project to the 1.1300-1
.1400 area (61.8% and 50% retracement cluster. This projection
hints at a break of the intermediate trendline, which may have
some resistance.

USD/JPY’s Violent Triangle Breakout This pair formed a triangle
this week, and broke it on the upside. After some more
consolidation ahead of Friday’s NFP, it surged more than 200
pips. This proves the 93.80 area to be of significant support.
We anticipated an upside down Head and Shoulder reversal
formation to develop here. It is not a pretty HnS, but
nevertheless the dynamics are the same. Now we have a rally
which looks to have resistance at the 99.50 - 100.00 area.

EUR/USD Gartley Completed with Topping Action EUR/USD is showing
signs of reversal, though price action is still within the frame
of the rally in the previous month. The topping action at the
gartley completion formed a head and shoulders pattern, which
penetrated our target, but nevertheless reversed. In the 4H
timeframe, action broke short-term trendline, but is now testing
intermediate-term trendline. The intermediate trendline
deserves close attention. A break will eye support at 137.00 -
138.00. Then, a bounce here warrants anticipation of a larger
Head and Shoulder development, though it is a bit premature for
now. Otherwise, it may bounce from intermediate trendline to
test recent high. Price action deserves attention there at the
high if reached.

GPB/JPY’s Countertrend in Channel

Technical Setup:
We first notice that the GBP/JPY is at the upper line of the
upsloping channel. Daily candlestick actions show: a doji, than
an engulfing and two spinning tops. This shows readiness for
reversal An initial projection of countertrend decline is to the
bottom line of the channel which may match the 61.8% - 78.6%
retracement of previous rally leg. We confirm in 4H timeframe
that a short-term support is broken, and a retest of that
support establishes it as a resistance now. The projection is
similar the 149-149.50 area (61.8% - 78.6% retracement). It
should be noted that this is an established uptrend, so a short
play is very aggressive. In fact our target may be shortened to
152.00 if it takes longer than next week to reach it. Also, this
is a projection of a move against the established strength, so
if the pair is strong, it may not even reach this target. On the
other hand, it may be prudent to wait for the retracement to
complete and hit channel support to play a countertrend breakout
rally. Let’s continue to monitor the pair to see what kind of
price action follows next week, if indeed it is a decline to our
target.

EUR/GBP Looking at Retracement for Next Week

Technical Setup:
In a rare 1H look, we see that the EUR/GBP broke an intermediate
declining trendline, and is establishing a rally. The rally may
have a kickback, and we can anticipate this kickback to be
slightly below the current level, an area of 50.0% and 61.8%
retracement cluster. This would also test previous intermediate
declining trendline. The stochastic here is oversold, so this
may be a technical set up for a long position. Look at price
action to start next week. If it breaks from the 0.8750 area
upwards, this may be a trigger for long position entry.
Otherwise, be cautious if further decline occurs. This is
possible, because the underlying market conditions are still
bearish in a daily time frame. The 1H technical set up is meant
to catch some very short-term bounce (relative to Daily charts).

Tags: analiza, chf, eur, forex, gbp, jpy, thorex, trading, trgovanje, usd

Euro Rebounds Along with Better Fundamentals

The Euro pared its losses from last week. The market had been
pressuring the Euro-zone currency partly due to uncertainty in
the ECB regarding their next move. Stock markets had a rough
start, but stabilized and rebounded to end the week. This was
the main driver to many crosses which are in choppy trending
channels. The Euro’s rally was also boosted by its better-than
-expected fundamentals throughout the week, mainly of
manufacturing and industrial data.

EUR/USD Reverses
The EUR/USD had a very beautiful swing this week. In the 2H
chart, you can see that the pair started the week falling
sharply to the 1.2900 area. However this proved to be strong
support, coinciding with the 61.8% retracement of the early
March rally. We witnessed 2 days of consolidation establishing 1
.2900 as support, and 1.2980-1.2990 as resistance. This gave us a
good anticipation for a breakout, which came on the Wednesday
-Thursday rally. This rally was held back slightly by a wedge
consolidation before the market could decidedly push for a sharp
rally. We saw minor upsloping resistances broken, and now the
pair is at 1.3300 where it nears the intermediate-consolidation
channel resistance. Price action on Friday showed some possible
profit taking, which should not be mistaken as a hint of
reversal, although it does to a slight degree. The bias from a
rally decelerationon Friday is not as strong as one that would
come on the weekdays. Therefore, Monday’s price action deserves
closer attention. The first plan can be anticipation of reversal
, looking for the short-term uptrending support break and
candlestick combination as trigger (You may want to look at a
lower time frame such as 1H). You may also help time this with a
oscillator. However, being that there is a completion of abc
pattern (some call it abcd - based on where you start your a),
should warn of possible upside as well, so this reversal may be
very temporal. Again, it is very important to look at the market
action at junctures where different factors seem to be
conflicting. These two opposing forces may be reflected by some
time of consolidation before a more decisive swing or
continuation.

USD/CAD Looking Bearish
Last week, we looked at the USD/CAD in and saw that there may be
a test of a upsloping powerline, which may have switched
polarity from support to resistance. This test coincided with a
test of a downsloping resistance. The result this week was a
decline after the Monday rally and two days of consolidation.
This decline may see some more momentum next week to the 1.1800
area before seeing major support. The stochastic is in oversold,
and looks to be reversing so in the short-term, there may be
another rally before further decline to our target.

GBP/JPY Nears Channel Support

Technical Setup:
Continuing our analysis on GBP/JPY, we see that the rounded
bottom setup has yet to see follow-through in price action.
Instead, there is a restest of old neckline. Despite the
difficulty, the pair is still in an intermediate uptrend though
choppy and weak. Looking at drawn channel lines starting with
the second shoulder, we see the price action very contained and
reaching the upsloping support. An accelerated channel would
have seen support touched, but a more slightly longer-term
support has not been touched yet. The stochastic in 4H chart,
shows a bullish divergence, and there may be a completion of an
abcd consolidation. Look for a breakout of this consolidation
channel on the upside to bring a rally back towards channel
resistance.

Will EUR/GBP Rally Sustain?

Technical Setup:
The EUR/GBP has a similar overall price action as the EUR/USD in
that it is reversing a decline. The rally at the moment seems
like it will meet resistance at the 0.9150 - 0.9200 area. Only a
break of this area should we consider the possibility of a rally
back to 0.9500. With the stochastic poking at the overbought
area, we may see a downswing before that happens. The
alternative is that the current rally is simply a short-term
swing that will meet resistance at the 0.9150-0.9200 area and
reverse after completing a abc or abcde. Keeping that in mind,
we are also going to monitor the upsloping support, anticipating
a coutertrend breakout.

Tags: analiza, forex, kako, kje, napoev, tehnično, trgovanje

Euro Falls Despite Risk Appetite; AUD, NZD Falls on China’s
Sluggish Growth

The Euro had another poor week, losing to the pound and greenback
. The correlation with risk appetite was apparently broken for
this week because even though stocks rallied, the Euro struggled
. The Australian and New Zealand Dollars also took a hit from the
release of China’s poor growth performance in Q1, which declined
from an annual rate of 6.8% to 6.1%. China is a main importer of
goods from Australia and New Zealand, and therefore a shrinking
Chinese economy negatively affects these two countries.

NZD/USD Decline Week Brings Pair to Possible Gartley.
The Kiwi had a second swing-down since the rally that started in
April. China’s decelerating growth rate caught attention of the
market, which pressured the commodity currency even more since
it does a big portion of exporting to China. The decline however
may not be sustainable. A breakdown below 0.5500 would indicate
such strength. However before that happens, there is resistance
at the 0.5650 level, which if held up would be a completion of a
gartley, indicating further rise in the pair.

USD/CHF Channel Support Holds;
Last week we noted careful watch at the channel support and see
if the price action can break it. If it can, our short-term
gartley pattern would work out. However, it didn’t. Instead the
support held and there is further retracement in a channel. This
week ends with the 3rd wave up in this retracement channel. Did
the market exhaust its rally yet? This is possible. However, it
is also possible that prices will rally further to 78.6%
retracement at the 1.1800 level. The second scenario is prefered
because we would be able to put a tighter stop if we decide to
go short from this level instead of the current 1.1700. If a
decline does follow after the 1.8000 resistance, we would still
need to see if it breaks support and than a previous minor low.
Some may want to short now at the resistance, but the fact that
its a rising resistance and a shrinking target makes this less
appealing of a setup.

EUR/JPY’s Possible Gartley

Technical Setup:
A possible gartley is forming here but we need to becareful and
monitor the price action. Today’s “doji” should not be
considered as a reversal signal because it is Friday, and the
liquidity was low. Unless there was a major news announcement
and the bulls and bears fought throughout the day. This was not
such a day. also notice the possible formation of a classic 3-pt
bullish divergence with the stochastic, strong suggestion of a
reversal. A possible target if the reversal indeed follows is at
1.34-1.35 area, which matches the previous resistance, and would
be 61.8% retracement of the down swing.

USD/CAD

Technical Setup:
There is a 6-month development of an ascending triangle, and
there might be a break of the uptrending support this week.
However, this should not be immediately considered as a signal
for a down-trend as the overall market condition is still that
of consolidation. There may be a retest of the powerline, in
which case we will be looking for a strong rejection (at around
the 1.2400 area). If the market indeed bounces off the line as
resistance, a viable target may be 1.8000, which is support from
previous low.

Tags: analiza, eur, forex, gbp, jpy, kako, kdo, kje, napoved, trgovanje, trgovati, usd, zakaj

ECB joining the Quantitative Easing Rhetoric
Last Thursday, although economists had expected a 50bp-cut, ECB
only cut 25bps. Meanwhile, speculation has been increasing that
the bank will soon have to move to tools outside of the interest
rate policy, namely quantitative easing. This Thursday, ECB
council member Nowotny announced that rates would likely go
below 1.00% (1.25% at the moment), and that the bank is
considering buying coporate debt. That put extra pressure on the
Eurozone, along with more disappointing releases from the
Eurozone. Despite a bout of risk appetite on Thursday which
normally pushes up the EUR/USD for example, this pair fell,
indicating that the market was more attentive to the
fundamentals and central bank direction than risk sentiments.
Meanwhile, the RBA cut the OCR to a 49-year of 3.00%. The BoE
also had its interest rate decision, holding the benchmark rate
at 0.50%.

EUR/GBP Falls Below Supports
Last week, we took notice of EUR/GBP’s testing of support. This
week, price action broke through the support in what initially
looked like a clearout action before re-entering the channel.
Then there were further clues of bullish bias as the pair
retested that support and had a very clear rally. However, this
rally was stopped short on Thursday, as the ECB reaffirmed the
market’s speculation that it plans to move to quantitative
easing. This action broke below two converging support lines.
Although our bullish bias (from a previous Gartley), the decline
has brought the pair only to the 61.8% retracement level and at
the 0.9000 area. If the pair breaks this area, it can decline to
0.8800 before a rally. However, a break of that should warn that
the EUR/GBP may be in a major decline. A break of 0.8500 would
be a confirmation of a major decline.

EUR/USD Declines; Gartley Watch
The EUR/USD is possibly setting itself up with a Gartley. This
week’s ECB and fundamentally driven decline puts the EUR/USD
near the 1.3100 area. Further decline is possible, but there is
support at 1.2950-1.3000. Here lies the 61.8% retracement level
as well as the previous resistance which would now be tested as
support. If prices indeed reach this area, a gartley is formed,
and the trader should monitor bullish action. However a break of
that may lead the EUR/USD to the 1.2400-1.2500 support zone.

CHF/JPY Falls Near Upsloping Channel Support

Technical Setup:
In recent issues, we mentioned that the CHF/JPY completed a “W”
or Double-Bottom formation. This week, the pair declined, though
staying within the upsloping channel it has been in since
February. Current RSI levels show strength in sustaining a rally
. We anticiapte this weeks action only to be a minor corrective
decline, which will meet support at both the dynamic trendline
as well as resistance at the 86.00 level. Look for price action
to reflect those previous 2 attempts to break the dynamic
support (either with long tail, or sharp reversal candlestick
combination). That should be the first signal for a re-entrance
to the rally.

USD/CHF: Settling up Gartley in Corrective Move

Technical Setup:
Breaking above its previous minor top and extending about 127%.
This is between the 50% and 61.8% level of the previous rundown.
The result is a gartley formation, indicating bearish bias. The
pattern formed a bit pre-mature, reletive to the classical
fibonacci resistance at 61.8% (1.1668). The 1.1700 level has
even stronger resistance. But if indeed price is ready to head
south, this “miss” of important resistance may indicate bearish
aggressiveness and give more confidence to the bias.

Looking at the 4-H chart, we can also spot a 14-period RSI
bearish divergence. With all this information, an agressive
trader may jump on the decline now with a short-term target of 1
.1170, but waiting for a break in the upsloping support (of a
triangle) would be a very significant step for confirmation. A
break below this level would suggest a more major decline, with
a target at the 1.0850 level (projecting previous range of
decline).

Tags: analiza, forex, kako, napoved, trgovanje, trgovati

Risk Appetite Extended after G-20 Summit
Stocks worldwide started the week on a bad note, but didn’t take
long to revive last week’s risk appetite. There is a growing
sense that the recession bottom is nearing. Also, the G-20
summit brought a joint resolution to create a $1 trillion fund
for the IMF, which would give emerging economies a booster shot
against the global recession. The Dollar lost to its rivals, but
the Yen lost more. Commodity pairs rose, along with a resurgence
in oil prices. The Euro gained on the dollar, but the Pound was
the big winner among the European majors.

EUR/GBP Retracement to 50%
The EUR/GBP is testing an important support, which would either
reaffirm the current uptrend, or a signal for further
consolidation/retracement. The 0.9100 support was pierced Friday
and is threatening to break it. This rundown came even though
the ECB cut rates by less than expected. However, this can be a
clear-out action, so the beginning-of-next-week price action
deserves close attention. At the moment, the 4-HR RSI shows a
bullish divergence. An entry with a fairly close stop can be
made if the down sloping resistance is broken, as this would
complete a “abc” retracement. However a more conservative entry
would wait until a break of the 0.9170 minor resistance.

CHF/JPY Breaks out and Completes “W” Pattern aka. Double Bottom
Last week, we saw the CHF/JPY retrace on Friday after
intermediate/consolidation resistance. The market retested this
as support while it penetrated on Monday the up-sloping support
held up. This provided bullish “force” and the pair broke back
up through the intermediate resistance. Those were aggressive
(at support) and conservative (breakout) entries. Finally
Wednesday price action provided a counter-trend which was broken
, giving another conservative entry. This break effectively
completes the “W” pattern (not shown here, but on Daily or
Weekly Charts), which is a double bottom. These formations are
rare and signal an ensuing major rally.

USD/CHF: Resistance Holds Up, Further Consolidation
The USD/CHF rallied to resistance last week. This Monday saw a
slight breakout, but that proved to be a clear-out action. The
resistance held and the market traded this pair in ranging
action through the week, ending at previous minor resistance,
which is now acting as support (1.1340).

USD/CAD: Seeing Support and Sets up Countertrend Resistance

Technical Setup:
The USD/CAD has been in a 4-month consolidation which is looking
to be an ascending triangle with a flat top at 1.3000. Market
price tested support and rallied last week, only to stop at 1
.2700 before returning towards support. The price action to end
the week brought the pair back to retest this support at around
the 1.2300 area. One can use an aggressive triangle pattern
entry at this support, with confirming signals of oscillators
(oversold). For a more conservative long entry, one approach is
to wait for a counter-trend breakout.

GBP/JPY: Rounded Bottom Signals a Bout of Risk Appetite

Technical Setup:
In previous issues we have spotted the GBP/JPY in a reverse head
and shoulder. It is apparent now that more time was needed for
the current consolidation. Eventually as we see this week, the
pattern has successfully completed as a complex reverse head and
shoulders, which some chartists also call “rounded bottoms”.
This basically signals a bottom of a decline as minor bottoms
fail to make new lows after January’s low. The break of
“neckline” at 142.00 was the first major indicator that a bottom
could have been established. The subsequent break of 147.00 adds
more weight to the bullish bias. An intermediate target is at
165.00, with 2-3 expected retracement periods. This pair is
correlated with risk appetite, and thus reflects the current
feeling that the recession bottom may be nearing. If this is to
be the case, we can note that this recession was truly one a
recession of “confidence”, being that GBP/JPY is a measure of
this factor, and that it bottomed in January. It could then be
debated that this return in confidence was what prevented the
world economy from sinking deeper.

Tags: analiza, denar, forex, kako, kdaj, kje, napoved, trgovai, trgovanje, trgovati, zakaj

US Economy Sees Improved Fundamentals
There was a sense of optimism on Wall St. and equity markets
globally this week. Geithner detailed the US Treasury’s plans to
buy up “toxic” assets in the continuing effort to relieve banks’
troubled balance sheets without nationalizing them. Markets
reacted well to his statements to begin the week. As far as
economic data, the US saw some alleviating figures as well.
Existing home sales on Monday surprised forecasts and improved,
while Tuesday’s house price index grew instead of the forecasted
decline. The Richmond Fed Index also retreated from the horrible
readings of -51 to -20. Durable goods figures, coming in
Wednesday, was another big surprise, growing 3.4% instead of the
predicted -2.2% pace. New home sales also improved instead of an
anticipated decline. Finally Friday’s Umich Consumer Sentiment
index also improved faster than economists thought.

The currency market however showed continuing consolidations and
retracements for many pairs that have recently been initiating
new trends. Pairs such as EUR/GBP, AUD/USD, and USD/CHF are
retracing last week’s moves, while some others such as USD/CAD
and GBP/USD are developing congestion patterns for either
continuation or some further retracement as well. Let’s start
and take a look at the two pairs we focused on in last week’s
“Looking Ahead”.

EUR/GBP Breaks Below Triangle in Retracement
as mentioned last week, the EUR/GBP was looking at a retracement
if the price action breaks below the descending triangle with
flat bottom. The market then sold it down to the 0.9150 support
zone established last week. Another rally in the second half of
the week brought it back up to that triangle bottom level, which
now serves as resistance after broken as support. This also
coincided with the 78.6% retracement of the run down. If this is
a simple “ABC” retracement in a primary uptrend, there may be
some more decline though it should not go below 0.9100 as a
standard Elliott Wave. There may be some support even before
that, at the 0.9150 - 0.9200 area.

AUD/USD Stays in Consolidation; Possible Gartley
We saw last week’s triangle broken on the upside. However a
continuation was stopped short at 0.7100, and there was further
consolidation this week. It should be noted that triangles often
DO develop into other consolidation patterns. It may be a bit
premature, but this pairs price action is forming a Gartley
pattern which reinforces the possbility of bullish bias.

USD/CHF: Retraces Run-Down Back up to Near Resistance
The USD/CHF consolidated last week in a sideways channel. This
channel was broken this Friday on the upside with a rally on
Friday, showing a retracement of the previous run-down. This
retracement rally is meeting very short-term resistance at the 1
.1460 area. The intermediate resistance is between the 1.1500 and
1.1600 area (50% retracement of run-down). We will continue to
monitor this pair in its recent decline, which we saw coming in
the previous couple of weeks.

USD/CAD: Watch for Consolidation Break

Technical Setup:
The USD/CAD is supported by upwards sloping demand line that
extends back to 10.14.08. In the other direction, there is a
less significant short term resistance at 1.2450, which the pair
is testing now. A clean break of this resistance (at least past
1.2500, without rejection), may signal a rally to head towards 1
.3000. A clear break below the support will be an even greater
signal of a decline towards the 1.1800 area.

CHF/JPY: Confirming a Breakout

Technical Setup:
We mentioned at the end of February that the CHF/JPY pair once
again is testing intermediate resistance (on a daily chart). We
also noticed that this pair has been trending on a monthly basis
, making the turns at the beginning of each month since November.
However, we mentioned that the Yen was becoming vulnerable due
to the frail Japanese economy, and therefore became cautious
about this range trade setup. This caution was prudent, as the
resistance broke this week. The set up now turns into a trend
following one with the breakout as a signal. We saw on Friday a
rather big decline back towards below the broken powerline,
which is good because we need to see if the market is truly
ready to support this new trend. Entry after a re-test is the
conservative way to go. On the 2H timeframe (not shown here),
the decline brought the RSI to oversold levels so this may be a
time to re-enter into the uptrend, although a more cautious
entry should wait for some affirming candlesticks. This entry
should also only be made if the price action brings the pair
back up above the mentioned powerline to make sure the breakout
wasn’t simply a clearout ahead of a decline back into the range.
On a rally, the 90.00 area would be the first target, with the
93.50 area being the more aggressive one.

Tags: analiza, forex, joškarca, maja, napoved, test, tradin, tratarca, trgovanje, VT Trader

USD/CAD Ends up Completing Head and Shoulder; 1.3000 Holds
There was a rally towards 1.3000 in February. Price action halted
at this resistance and developed a possible head and shoulders
with a break of the neckline ahead of the FOMC announcement.
This was a clue that the market was ready to reverse itself. But
only the clean break and inability to rise back above the
neckline was conclusive enough to signal that the market had
bearish bias. Of course the news disturbance was the trigger for
the subsequent 600 pip drop. The pair ends the week in
consolidation, but further decline see difficulty as it nears
major uptrending support that extends back to 10.14.08.

GBP/USD Rallies Past Major Resistance
We started to monitor the GBP/USD pair closely when it looked to
form a Gartley Pattern. Our initial look was at the 61.8%
retracement area, but the run-down extended to the 78.6% level,
which still loosely fit the description of a Gartley. The end of
this pattern developed into the next reversal pattern, an
inverse head and shoulders. The FOMC announcement came as the H
&S was at its second shoulder, and propelled prices past the
neckline in the following 4 hours. There was a little pause at
the broken neckline, which coincided with an important channel
resistance that extends back to 10.30.08. The rally continued on
Thursday but by Friday, ended up in consolidation around the 1
.4500 area, with 1.4600 as resistance. Mapping previous uptrend
to the current rally gives us a target at 1.5300, but 1.5000
would be a fair conservative 1st target to scale down any
positions.

USD/CHF: Reaction to FOMC Trumps reaction to SNB Intervention
This pair captures this issue’s main title. In compairng last
week’s reaction to the SNB intervention, this week’s FOMC
announcement definitely showed a more sustained move. The spike
from the SNB news came up to retest the 78.6% retracement area
and was not able to penetrate. Instead, a triangle was formed
with a flat bottom which was broken with a continuation pattern,
These price actions to start the week should alarm the trader of
bearish bias. Of course we know now that the FOMC news
disturbance gave this move a jolt and the USD/CHF fell back
below it’s level prior to the SNB intervention, and broke a
support at around 1.1500, which we saw as a major test for a
downtrend.

In the shorter time frame, the current move may seem to be
exhaustive now. But looking at the daily chart, we see that
further decline to 1.0500 is possible. We have seen in the past
year that this pair labors to rally, but plunges in declines. So
while there may be a short-term pullback, it may lead to further
and possibly sharp decline, with a fair 1st target at 1.0700.

EUR/GBP: Retracement or Consolidation Imminent
Technical Setup:
We did not have a retracement to the 0.9100 area this week, as we
had anticipated. We saw the market reject prices from coming
below 0.9200, resulting in another rally to 0.9500. This level
revisits resistance in late January, early February and is a
psychologically significant number as well. The RSI gives
further clues to the timing of a possible pause to our breakout
rally. On the chart, “a” at 0.9300 is a minor support, while “b”
is the intermediate support we had anticipated a retracement to
test. Therefore, trendfollowers who missed the initial breakout
entry may still have another chance. The timing is important,
and oscillators can give a hint. Consider though, in an uptrend,
the oscillator might give you a clue of resistance conditions,
but may not give you clues in re-entering (other than the
generic 50 level). Yes, a strong uptrend may not give the RSI a
chance to dip back to oversold levels, as this may ironically be
a signal that the uptrend is weak. This can be applied to price
action as well. Meaning, look for re-entry if prices ease back
towards 0.9100, but keep in mind that since the breakout from
that powerline was a strong one and prices have move somewhat
extensively from it in a short period of time, a retracement has
a lesser chance of reaching that “abandoned” powerline.

2-HOUR

The trader who decides to ride this rally despite missing the
initial kickoff, may want to look at the lower time frame for a
short term move. We see in the 2-H chart that the rally indeed
has paused and formed a triangle bottom. A decisive break on the
bottom may signal a longer retracement period, while a break on
top is less revealing until it also breaks th 0.9500 level.

AUD/USD: Sets up Late Entry Signal
Technical Setup:
Our anticipation zone of converging resistance and support was
marked by ranging price actions. After breaking out on the
upside, price action was still a little suspect. Thought
consistent, the rally was marked by short bursts, until the FOMC
announcement propelled the pair upwards on the back of greenback
weakness. This crossed above the intermediate resistance at 0
.6800, and we suspect this level to turn into support. The RSI on
the daily chart shows that conditions are ready for a
consolidation or retracement, just like like EUR/GBP. And much
like the EUR/GBP, the AUD/USD rally also formed a triangle
pattern, which sets up a breakout entry in the direction of the
trend. Look for a decisive breakout which also breaks above 0
.6950 for a re-entry into the trend. Otherwise, a break to the
downside warrants watchfulness on the intermediate powerline at
0.6800 as a possible support. If that breaks, the 0.6500 area
stands next as support.

Tags: analiza, anpoved, foreks, forex, napoved, trgovanje

Another Round of Bulls vs. Bears
Fundamental releases around the world continue to worsen and risk
aversion still grips market sentiments. This week, there was a
jolt of risk appetite mid-week as China hinted at a very
aggressive fiscal stimulus in order to maintain a 8% annual
growth rate, a very optimistic target as China is facing what
Prime Minister Wen Jiabao calls “unprecedented difficulties”.
Before more details came out, the market already rumored an
extension of this stimulus. However, Wen only elaborated on the
original plan, giving focus to infrastructure investment while
also encouraging the public to spend rather than save. The non
-mention of another round of the stimulus pulled back what risk
appetite the market had in mid-week.

The continuingly poor Non-farm Payroll employment report from the
US government was also a culprit to the end of week risk
aversion. January’s figures were heavily revised higher, and
this month’s figure was worse than forecasted, pushing the
unemployment rate to 8.1%.

Central Bank Decisions
RBA: Instead of cutting rates as economists expected, Australia’s
central bank held rates at 3.25% on Monday, noting that its
economic contraction has not been as severe as in many other
countries. However on Wednesday, the 2008 Q4 GDP release started
to threaten this notion, with a Q4 GDP of -0.5%, and a 2008 GDP
of an anemic 0.3%. Although Autralia is not technically in a
recession, this is the first quarterly contraction in 8 years.

BoC: The Canadian central bank noted its deepening recession
worsened by sharp declines in global demand for the country’s
exports. Monday’s GDP report for 2008 Q4 reported a worse than
expected contraction of 1.0% in the quarter, and 0.8%
contraction for the 2008 year. The BoC followed by slashing its
key interest rate by 50 bps to 0.50%.

ECB: As expected, the European Central Bank slashed the key rate
by 50 bps to its record low at 1.50%.

BoE: The central bank slashed another 50bps as expected, also to
its record low at 0.50%. The bank will no longer have interest
rate policy as an effective tool for stimulating the economy. It
will have to utilize other monetary policy instruments and apply
quantitative easing (basically pumping money into the economy).

All but the RBA cut rates this week, and by 50 basis points.
These expected rate cuts were not of much impact.

USD/CHF Begins Descent; One More Big Test
We have been following this pair’s completion of a 78.6%
retracement. Subsequently we have seen many sell signals
triggered. Listed on the above chart are the different entry
signals that appeared for different type of traders, from the
aggressive to the more conservative. Also, the possibility of a
downtrend was improved by establishment of 3-pt pivot (labeled
in blue, this confirms 1.19000 as a true high thus anchoring a
new bearish trend). Let’s look back and study the signals this
pair provided:

1st: Anticipation of retracement to the 78.6% is a fair entry for
the most aggressive traders.

2nd: A sharp decline broke below a wedge (or ascending triangle)
pattern, signaling that many have picked up on this retracement
and gotten in short positions. However, others found this new
price to be a discount and thus a kickbac ensued.

3rd: The decline met demand at this level (1.1450 - 1.1500),
which pushed the prices back up. This could be considered a
kickback if the high from this rally does not exceed previous
one. Indeed, the rally came back a little pass 78.6% before
another sharp decline. The kickback entry also had an aggressive
trigger at 78.6%, and a more conservative one at the break of
short-term upward support.

4th: This week ended with the pair resting upon intermediate
upward support. This is sort of a “final test” before we can
confirm the end to the bullish momentum, giving way to possible
bearish momentum. This upcoming week will give a clue to weather
the pair passes.

There is also a 5th possible entry. If a breakdown is strong,
this may be met with high demand and thus push the price back
towards the broken support, for yet another kickback. This
doesn’t always happen, and those waiting for this entry may
simply miss the trade. However, note the axiom: It is better to
miss a good trade then prematurely enter a bad one.

GBP/JPY Testing Resistance to Confirm Uptrend
The seesawing of risk appetite and aversion held the GBP/JPY in
range this week. With much of same indication of global
recession from fundamental releases, the market did not find any
reason to break the resistance level at the 141.00-142.00 zone.
The good news for those following the current intermediate
uptrend is that strong demand is coming in at higher prices
(thus the upward support, and forming a right angle, ascending
triangle)). As these supply and demand levels converge, it will
be important to watch upcoming week’s price actions to see if
demand can sustain if the pair is above the current resistance
level. (Basically watch out for a breakout next week, with a
first possible target at 148-150 level, and a more aggressive
one at around 167.00(50.00% retracement). Otherwise a breakdown
below 136.00 may signal a rundown to 129.00 in the short term.)

GBP/USD Gartley Foreshadows Dollar Weakness

Technical Setup:
The GBP/USD pair have been channeling downwards after sharper
declines of 2008. A possible Elliott Wave count puts the recent
choppy rundown to be a terminal wave. With that premise, it is a
matter of time that the pair has a major rally. This week’s
completion of a classically qualified Gartley pattern gives us a
hint that this time may be nearing, hinting USD weakness. One
note however is that the pattern was completed in a relatively
short period of time (1 month) compared to the downtrend (about
13 months). Therefore, the Gartley pattern doesn’t foreshadow
this “significant rally” I just mentioned, but rather, an
intermediate rally. The appropriate targets may be 1.5000, and
more aggressively at 1.5400 with possible drawdown to 1.3500.

EUR/CHF: Breakout of Triangle, Caution Imminent Kickback

Technical Setup:
The breakout below the triangle formation on February 16th
triggered a sell signal. So far there has been a very dull and
choppy decline. Looking at the underlying market conditions, one
should caution a possible short to intermediate term rally,
since price is at 78.6% retracement, and a downward support. The
RSI is also eyeing a bullish divergence. Of course all these
“warnings” basically caution that price action is showing
oversold and retracement support levels, applicable only if the
pair is to stay in consolidation. Thus for if the EUR/CHF pair
stays in consolidation mode, these are signals to buy.
Anticipate some to act on this, and consequently a possible
short term rally, with a fair target at 1.4900 and slightly more
aggressively at 1.5100. A possible trigger is a failure of the
powerline at 1.4650 to hold as resistance as the market is
retesting that level to end this week.

Tags: analiza, forex, napoved, pari, platforma, trgovanje, valutna analiza, valutni

Another Round of Bulls vs. Bears

Fundamental releases around the world continue to worsen and risk
aversion still grips market sentiments. This week, there was a
jolt of risk appetite mid-week as China hinted at a very
aggressive fiscal stimulus in order to maintain a 8% annual
growth rate, a very optimistic target as China is facing what
Prime Minister Wen Jiabao calls “unprecedented difficulties”.
Before more details came out, the market already rumored an
extension of this stimulus. However, Wen only elaborated on the
original plan, giving focus to infrastructure investment while
also encouraging the public to spend rather than save. The non
-mention of another round of the stimulus pulled back what risk
appetite the market had in mid-week.