Quote of the day: “When it is not necessary to make a decision, it is necessary not to make a decision.” ~ Lord Falkland
Good morning. The euro is back to $1.3800 after pulling back on S&P’s downgrade of Spain, but $1.3700 provided support yesterday – as expected. Short-term studies remain bullish while the pair holds above 1.3650-1.3700 and resistance starts at 1.3800, followed by 1.3850 where’s the 50% retracement of last down leg from 1.4550 to 1.3150. More important resistance is seen above these two levels – at 1.400 (former support and psychological/round barrier). Given recent dollar weakness, it shouldn’t be too hard to test 1.400 next week. The US Retail Sales data is the most important release of the FX Calendar today.
EURUSD
Euro Vs US Dollar Chart Daily 10-14-2011
As you can see in the 4-hrs chart below, the pair is forming a consolidation range between 1.37 and 1.38. Exiting the range on either side could be considered a trade opportunity
Euro Vs US Dollar Chart 4hrs 10-14-2011
AUDJPY
it’s been a while since the 62% fib resistance is being tested, so it doesn’t look like a correction anymore, but rather a minor consolidation before rallying higher. Buying on the break above yesterday’s top looks like a good plan
Australian Dollar Vs Japanese Yen Chart Daily 10-14-2011
AUDNZD
The Aussie dollar is holding gains against the Kiwi after breaking above 1.2800 resistance yesterday. It’s probably best to consider the bullish scenarios right now, as the cross seems set for more upside
Australian Dollar Vs New Zealand Dollar Chart Daily 10-14-2011
USDCAD
1.0250 provided a new selling opportunity as the pullback was short-lived, but we’re still above support formed around 1.0150. In case price pulls back again and because it is Friday, and Friday charts are usually either strange or dollar positive – I doubt that 1.0250 will hold. I remain bearish for now but won’t sell on a new rally. Not today
US Dollar Vs Canadian Dollar Chart Daily 10-14-2011
Enjoy your weekend!
actually, I do not see a breakout of AUD/NZD just yet. I believe that the breakout will fail, and then a breakout at a later date.
if it breaks higher then I owe you nothing, if it fails – then I owe you that Ferrari 458 Italia plus a six-pack of Guinness
ok? :)
Your bet is too vague. You have to give me price targets and time frames otherwise we would end up arguing over whether it was a real breakout or not.
I would be willing to concede that a move above 1.29 and remains there in the next 1-2 weeks is a valid breakout … A move below 1.2750 in the next 2 weeks would be a false breakout. A level in between 1.29 and 1.2750 in 2 weeks would void the bet.
I am not sure you have much to bargain with !!! I have still not seen my Ferrari from the last bet. However, lets go double or nothing. A Ferrari and an iPad 3 (since I do not drink beer) if AUD/NZD breaks out as defined above.
Hi Liviu, i am a reader of you for a while. Thanks for all the insightful comments.
"Short-term studies remain bullish while the pair holds above 1.3650-1.3700." Is there a tool you use for this kind of analysis? I mean i am using MT4 and i don't know how can i make the indicators work with imaginary data.
Hi Lunr
No, I don't use a tool to generate anything… I'm commenting on current trend status and levels where the market should look bearish instead of bullish, such as: support zones formed by recent higher lows, trendlines, moving averages and/or momentum