Friday

Daily analysis and trading strategies 12-18-09by Liviu

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Quote of the day: A sly rabbit will have three openings to its den. — Chinese Proverb

EURUSD

Trading strategy: short at 1.4470, stop at 1.4520 (1% risk), 1st objective at 1.4420, 2nd objective at 1.4370

Euro’s weakness remains high as its decline extended through yesterday’s all three trading sessions, reaching a fresh 3 months low at 1.4305. Since the 1.4305 is also the 161.8% retracement level of the 1.4625-1.5145 up leg / November’s range – a minor correction is occurring at the time of writing this – which is probably driven by profit taking on reaching the said level along with some risky optimism on bulls side. However, downside pressure is unchanged as odds favor further selling, especially weak rallies – therefore, could be worth watching the falling trend line coming from 1.5140 which is now seen around 1.4470. Intra-day sentiment is slightly bullish while the short-term studies are negative – a sustained break above 1.4600/30 being needed as a first confirmation of a potential uptrend resumption. In the very next period (next two trading sessions), it’s unlikely that the euro will get that far. Current exchange rate is 1.4384 @06:55 GMT

Support: 1.4300/05, 1.4250 and 1.4200
Resistance: 1.4400, 1.4470/90 and 1.4530
Market sentiment: long term – bullish, medium term – slightly bullish, short term – bearish, intra-day – slightly bullish

NZDUSD

Trading strategy: short at .7200, stop at .7240 (1% risk), 1st objective at .7160, 2nd objective at .7120

Although the NZD has lost some ground, as well, due to dollar’s strength across the board – yesterday’s loss has been slightly lower and the decline halted not far above the region which could provide a triple bottom – that’s the .7030/40 region. Intra-day momentum remains slightly bearish but rising, so a break out above .7140 would favor further upward price action towards .7200 which may limit gains for now. Short term sentiment is bearish due to the daily bar close below .7180/00 (former) support zone – hence the expectation to provide a temporary resistance if reached later today. Current exchange rate is .7111 @06:55 GMT

Support: .7030/40,  .7000/15 and .6950
Resistance: .7140/50, .7180/00, .7220/50 and .7300
Market sentiment: long term – bullish, medium term – bullish, short term – slightly bearish, intra-day – slightly bearish

Have a great day and an excellent weekend!