Daily analysis and trading strategies 1-25-10

Posted on January 25, 2010 at 7:28AM GMT in Analysis and forecasts 10905Leave your thoughts2010-01-25+07%3A28%3A57Liviu

EURUSD

Trading strategy: short at 1.4265, stop at 1.4325(1% risk), 1st objective at 1.4205, 2nd objective at 1.4145

The euro holds its modest gains around 1.4170, recovering from recent bottom at 1.4030. Short term sentiment remains bearish while below 1.4300 and extended gains from current market levels will probably be limited by facing resistance into the 1.4250-1.4300 region. On a medium term basis, downside is also favored due to December’s breach of the rising trend line which provided support for several months, bearishness also confirmed by the big money positions currently on the bear side – according to COT data, as showed in the weekly chart below. Momentum studies are in a bullish configuration on the intra-day charts and will remain so as long as support on the 1.4100 handle is intact. Current exchange rate is 1.4145 @07:30 GMT

Support: 1.4100, 1.4030/50 and 1.4000
Resistance: 1.4200/20, 1.4250/70, 1.4300 and 1.4370
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bullish

: EURUSD 4hrs chart 1-25-2010

: EURUSD weekly COT 1-25-2010

NZDUSD

Trading strategy: small short at .7220, stop at .7270 (0.5% risk), 1st objective at .7170, 2nd objective at .7120

Downside pressure remains high due to the velocity of last down leg and .7300 is currently forming the first important short-term resistance. Interim resistance is seen at .7230, formed by the downward trend line coming from .7630 of October. Short term sentiment is bearish, therefore a prolonged recovery is expected to bring strong resistance in focus into the .7230-.7250 region, eventually .7300. Above the .7300 mark, uptrend resumes, confirming that the decline to .7090 was corrective. Intra-day momentum is slightly bullish at the time of writing this, and a minor resistance has been pressured around .71/5060 a bit earlier today – formed by the downward trend line covering recent tops from .7230 of January 21. Current exchange rate is .7131 @07:30 GMT

Support: .7100, .7050 and .7000
Resistance: .7150/60, .7200/05 and .7230/50
Market sentiment: long term – bullish, medium term – bullish, short term – bearish, intra-day – slightly bullish

: NZDUSD daily chart 1-25-2010

: NZDUSD hourly chart 1-25-2010

Other setups on a short-term basis:

AUDCAD

the Aussie dollar is showing some strength against the Canadian dollar since it formed a bottom around .9220 – the 61.8% retracement ratio of the .8795-.9910 move from July to November, last year. A falling trendline coming from the mentioned top at .9910 is currently limiting aussie’s gains, along with the 50-61.8% of the corrective cycle – between .9555 and .9640. In case of a sustained break above the .9640/50, the uptrend continuation will be fully confirmed, providing an opportunity to join the bulls, aiming towards short term objectives around .9900 and maybe the parity.

: AUDCAD daily chart 1-25-2010

EURAUD

The euro has been very weak against the aussie dollar during the last 12 months, printing 11 consecutive bearish bars – a very strong sign of euro’s bearishness. Since August, a downtrend channel has been formed and it is noticed on both daily and weekly charts, as seen below. Although the euro has found support on the recent multi-month low at 1.5415, the outlook remains bearish so extended rallies are likely to face strong selling demand around the channel’s upper band – on the 1.6000 mark and above – on the 61.8% of 1.6625-1.5415 at 1.6165. Current recovery will probably continue, as the last two bars are suggesting a price reversal (move from lower low above recent lower highs). Above 1.5750/70 would switch short-term sentiment to bullish, hence favoring further gains towards the 1.6-1.6160 region.

: EURAUD daily chart 1-25-2010

EURGBP

Former support into the .8850 region which provided a stable bottom on on November and December last year has been broken on the first half of January and will probably provide resistance on current recovery. Short term sentiment is bearish and selling may emerge into the mentioned .8850 region. Above that, next upside barrier is formed around .8950 by the downward trend line coming from October’s top through next lower highs.

: EURGBP daily chart 1-25-2010

Have a great day!

Daily analysis and trading strategies 1-25-10

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