Friday

Daily analysis and trading strategies 2-5-10by Liviu

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Today’s report is released a bit earlier due to personal reasons.

Quote of the day: From error to error, one discovers the entire truth.– Sigmund Freud

EURUSD

Trading strategy: stand aside

All hell broke loose yesterday especially in JPY pairs – EURJPY collapsed almost 5 figures, USDJPY down 250 points, GBPJPY  down 540 points, while the Dow slipped below the 10k figure. The euro dropped to 8-month low at $1.3669 against the dollar and the decline confirmed my expectation to reach the 1.3750 level within the coming sessions which is the 61.8% of medium term’s up leg from 1.2885 to 1.5145. Next downward objective is seen around 1.3480 – 61.8% of last year’s full move. Short term sentiment remains bearish and a break above the 1.40-1.4050 region is needed to signal a change in current bearish structure. My yesterday’s strategy to buy a tiny portion at 1.3750 has been triggered, playing a potential bounce off mentioned fib support but the euro resumed downtrend in overnight session, reaching my stop. In case of a pullback today, resistance may limit gains at 1.3800, followed by 1.3850/65 and 1.3900 higher. Downside barriers are formed at 1.3650 and 1.3600. Current exchange rate is 1.3704 @05:55 GMT

Support: 1.3700, 1.3650/70 and 1.3600
Resistance: 1.3800, 1.3850/65, 1.3900 and 1.4000/30

Here are some interesting reading I recommend, regarding today’s Unemployment data release in the U.S.:

• FMMF – US to “Find” Extra 825,000 Unemployed this Friday after Birth/Death Model Revised
• Bloomberg – Birth death model – 824k jobs will disappear in February 5th
• Goldman’s NFP Estimate: -25,000, And An Extended Discussion On How They Get There

NZDUSD

Trading strategy: stand aside

The falling trend line coming from .7080 of November, now around .6060, provides a temporary support. However, the .6700 handle remains in focus as a key medium term support due to carry trade pairs getting hammered nowadays. If the kiwi dollar will manage to switch direction and re-test the upside, resistance around .6990/00 should provide a solid selling point, limiting gains. Momentum is negative in both short-term and intra-day charts and a sustained break above .6900 would encourage further gains but, as mentioned earlier, .6990/00 may hold for now, thus maintaining the short-term bearishness intact. Current exchange rate is .6882 @05:55

Support: .6850/60, .6800 and .6700
Resistance: .6900, .6990/00 and .7050
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – slightly bearish

Have a great day and weekend!