Monday

Daily analysis and trading strategies 1-25-10by Liviu

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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

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