Thursday

Daily analysis and trading strategies 12-17-09by Liviu

Share

Quote of the day: The time to buy is when blood is running in the streets. — Baron Nathan Rothschild

EURUSD

Trading strategy: short at 1.4530, stop at 1.4570 (1% risk), 1st objective at 1.5590, 2nd objective at 1.4430.

Euro’s free fall continued through the Asian session, reaching a 3 months low at $1.4368. Yesterday’s intra-day resistance into the 1.4585/00 region formed by a falling trend line coming from 1.5140 along with the 61.8% of Tuesday’s range has provided a stable barrier and bears regained control. No reaction on 1.4550/65 support region which I thought that could have limit losses for a while, though – hence confirming how strong current decline is – with euro down 4% this month. In case of setting a bottom here, around the 1.4400 mark – first important resistance is provided by the mentioned downward trend line from 1.5140 – which is now seen around 1.4530. Above that, 1.4600/35 comes next – while on the downside, 1.4330/50 could provide support. Overall bearish sentiment is stronger since euro missed yet another good chance to extend gains yesterday, therefore selling into minor rallies seem to be the way to go, for now. Current exchange rate is 1.4407 @07:03 GMT

Support: 1.4400, 1.4370, 1.4330/50 and 1.4300
Resistance: 1.4500, 1.4530/50, 1.4585/00 and 1.4630/50
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: small short at .7200, stop at .7255 (0.5% risk), 1st objective at .7155, 2nd objective at .7105

Although NZD’s losses have been smaller comparing to euro, downside pressure is high and it fell below key support region at .7180/00. My small long @.7200 has reached the stop at .7160 yesterday, on the retreat to .7155 – so the result is -40 points (-0.5%). If the decline continues, then next objective would be the .7030/50 region – therefore the chance to form a triple bottom there. Intra-day sentiment is bearish and former support around .7200 will probably provide resistance if a recovery occurs. Above .7220/30 – bias would switch, signaling that the break down below .7180 was a false one. Current exchange rate is .7115 @07:03 GMT

Support: .7100, .7030/50 and .7000/15
Resistance: .7200, .7220/50, .7300 and .7320/50
Market sentiment: long term – bullish, medium term – bullish, short term – slightly bearish, intra-day – bearish

Have a good day!