Thursday

Daily analysis and trading strategies 2-4-10by Liviu

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Quote of the day: The four most dangerous words in investing are ‘This time it’s different.’ – John Templeton

EURUSD

Trading strategy: short at 1.3950, stop at 1.4010(1% risk), 1st objective at 1.3900, 2nd objective at 1.3830. Alternatively: small long at 1.3750, stop at 1.3690(0.5% risk), 1st objective at 1.3810, 2nd objective at 1.3870

Resistance around 1.4030 provided a strong selling point and yesterday’s euro recovery has been short-lived – downside being under pressure once again now. The corrective cycle has been similar in size and duration to the previous one – of January 21th to 26th, as noted in my previous report, and my strategy’s short entry at 1.4030 has been missed by 5 points. Speaking of today’s conditions – recent bottom at 1.3850 is in focus ahead of today’s ECB Interest Rate decision at 12:45 GMT. A potential break down should open 1.3750 – 61.8% of 1.2885-1.5145. Both short term and intra-day studies are bearish and while there are no clues of a reversal, selling into rallies is a priority. If bouncing upward off support, intra-day resistance may emerge around 1.3900 and higher – around 1.3950, eventually 1.4000/30. Current exchange rate is 1.3880 @07:15 GMT

Support: 1.3850, 1.3800 and 1.3750
Resistance: 1.3900, 1.3950, and 1.4000/30
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – bearish

NZDUSD

Trading strategy: stand aside

A worst than expected Unemployment Rate, at 7.2% vs. expected 6.8-7% figure, added more fuel to the already established downtrend and the kiwi dollar failed to hold in the north side. The violent sell-off extended to as low as .6953 today – level which has not been traded since September. Objective around .6860 remains in focus – formed by the downward trend line coming from .7090 of November, connecting the lower lows of November and December. On the upside, resistance starts around .7000 (former support) followed by .7050 and .7100. Current exchange rate is .6969 @07:15 GMT

Support: .6950, .6900 and .6850/60
Resistance: .7000, .7050 and .7100
Market sentiment: long term – bullish, medium term – slightly bearish, short term – bearish, intra-day – bearish

have a great day!