Euro Sell-Off Likely to Continue

Good morning. Euro recovered some ground since yesterday but is facing selling pressure on each attempt to reach fresh intraday highs – and the sell-off is likely to continue amid Spain and Italy worries. According to yesterday’s poll, most readers are expecting the EUR to continue its decline – to $1.200 and below.

EURUSD

Market sentiment: intraday – bearish, short-term – bearish

Potential trade strategy: to sell on pullback to 1.2150/70, initial stop above 1.2200, target at and below 1.200.

EURUSD 4hrs 7-24-2012

EURUSD 4hrs 7-24-2012

There are two sell zones quite obvious on the hourly chart: one at 1.2150 (gap filling) and the 2nd one between 1.2190 and 1.2220 – a 30-pip range formed by the two fib retracement levels

EURUSD hourly 7-24-2012

EURUSD hourly 7-24-2012

USDCHF

The dollar trades comfortably around .9900 against the Swiss franc and there’s a good chance that parity level will be tested soon

Market sentiment: intraday – bullish, short-term – bullish

Potential trade strategy: to buy dips at .9860/80, target at 1.000 and above

USDCHF 4hrs 7-24-2012

USDCHF 4hrs 7-24-2012

EURJPY

EURJPY feels even heavier than EURUSD. But it does have a chance to recover, and that’s only if USDJPY makes a strong comeback and EURJPY would follow. But right now it’s the other way around: USDJPY following EURJPY downward. Well, whatever happens – one thing is clear enough: there are many sellers waiting in line to crush the EUR against the yen

Market sentiment: intraday – bearish, short-term – bearish

Potential trade strategy: sell on minor pullbacks to 95.20, or maybe higher – at 95.80, target below 94

EURJPY hourly 7-24-2012

EURJPY hourly 7-24-2012

AUDUSD

Aussie dollar recovered some of its losses and is currently testing resistance formed by the MA lines seen below and the horizontal resistance around 1.0300. I don’t think it’s a good idea to buy it yet, as more EUR weakness would drag AUDUSD down as well.

Market sentiment: intraday – bearish, short-term – bullish

Potential trade strategy: to sell into rally at 1.0350, stop above 1.0400, target at 1.0150

AUDUSD 4hrs 7-24-2012

AUDUSD 4hrs 7-24-2012

AUDCAD

Recovery continues after Aussie bounced off support around 1.0450 yesterday. Resistance to keep an eye on is formed at 1.0500/10

Market sentiment: intraday – bullish, short-term – bullish

Potential trade strategy: to look for a swing trade buying opportunity on the potential break of 1.0500, target at 1.0700

AUDCAD 4hrs 7-24-2012

AUDCAD 4hrs 7-24-2012

have a great day!

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