Daily analysis and trading strategies 10-16-09

EURUSD

Trading strategy: stand aside

Intra-day sentiment is slightly bearish after the 2nd failed attempt to reach 1.5000. Yesterday’s relatively fast recovery from 1.4840, which is also the 61.8% retracement ratio of 1.4760-1.4965, suggests that uptrend is very strong and pullbacks are grabbing bids from below 1.4900, for a potential break out above 1.5000 on the coming days. Upside is favored for now as there are no noticeable signs of correction and a weekly close into the 1.5 region will be a very important bullish confirmation. Looking South, minor support is seen at 1.4900 backed by a more important barrier into the 1.4820-1.4850 region and 1.4725/50 lower. Hourly price action suggests further weakness but I lack the courage to sell at these levels. Current exchange rate is 1.4920 @06:00 GMT

Support: 1.4900, 1.4840/50, 1.4820 and 1.4725/50
Resistance: 1.4950/70, 1.5000 and 1.5050

GBPUSD

Trading strategy: long at 1.6130, initial stop at 1.6080, objective at 1.6210. Adjust stop to breakeven on +30 pips (at 1.6160) if reached

Sterling rallied on yesterday and gained 320 points against the dollar, extending gains over today’s Asian session to as high as 1.6400 which was not far below the downward channel’s upper band seen on the daily chart below. Short term sentiment is bullish and the break out above 1.6120 has been quite an easy task, therefore confirming current bullish structure. Potential pullbacks will face support into the 1.6120 region. Current exchange rate is 1.6344 @06:00 GMT

Support: 1.6280, 1.6120/50 and 1.6000
Resistance: 1.6400, 1.6450 and 1.6500

USDJPY

Trading strategy: short at 92.00, initial stop at 92.40, objective at 91.50. Adjust stop to breakeven on +20 pips (at 91.80) if reached

Yesterday’s recovery has brought the 90.65-91.25 resistance zone on focus and it is currently being tested. Short term sentiment is bullish since yesterday’s rally extended past previous few days’ highs. However, current recovery is far from being a sign of reversal and extended rallies should face strong selling interest into the 92.00 region and above. Current exchange rate is 90.93 @06:00 GMT

Support: 90.50, 90.00 and 89.50
Resistance: 91.25/50, 92.00/10 and 92.50

Have an excellent day and a great weekend!

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Post tags: EURUSD, GBPUSD, USDJPY