Archive for the ‘Technical Analysis’ Category

USD…..

Tuesday, December 1st, 2009
Today we will re-examine the USD/JPY after November saw the biggest monthly drop this year.  A lot has happened in the last week with the biggest news being the debt crisis at Dubai World.  The dollar remains weak after a Dubai’s banks eased investors’ concerns with more liquidity for the market.
USD/JPY fell to 86.03, the lowest level we have seen for some time.
Technically speaking we have broken through the previous low for the year of 87.12 the downside still looks favourable.  The 50, 100 and 200 day moving average are all trading below each other respectively.  One possible positive sign from this graph is the long shadow on the candle for the 27th November: this long lower shadow shows that people are still going long here however it is too early to see signs of a reversal.
This market still remains in a strong down trend.

Today we will re-examine the USD/JPY after November saw the biggest monthly drop this year.  A lot has happened in the last week with the biggest news being the debt crisis at Dubai World.  The dollar remains weak after Dubai’s banks eased concerns with more liquidity for the market.

USD/JPY fell to 86.03, the lowest level we have seen for some time.

USDJPY

Technically speaking we have broken through the previous low for the year of 87.12.  The 50, 100 and 200 day moving average are all trading below each other respectively: the downside still looks favourable.  One possible positive sign from this graph is the long shadow on the candle for the 27th November: this long lower shadow shows that people are still going long here however it is too early to see signs of a definitive reversal.

This market still remains in a strong down trend.

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USD: Downside Prevails…

Monday, November 16th, 2009
Today was the start of what will be a busy week for US data releases.  U.S. retail sales rose 1.4% in October surpassing expectations of a 0.9% rise and motor vehicles and parts rose 7.4%
Excluding gasoline, autos and building materials, retail sales rose 0.5%, which makes this a third consecutive month of gains.
These figures support the opinion that the US economy is going to continue with its recovery during Q4.  In order to support the ongoing economic recovery and support the labour markets, the Fed are likely to maintain rates around 0.00%-0.25% for some time to come.
So what does this mean for the US Dollar?  Well today Bernanke made comments that supported a strong dollar which did give some initial signs of boost during intraday trading sessions however this was short lived and there was some downside pressure on the dollar.
Looking here at the USDJPY we broke through previous support levels and made new lows.  From a technical perspective we are trading below the 50 and 200 day Simple Moving Average.  There is some support around the 88.31 level; if we break through that then further downside can be expected.  A failure to close below that level may prompt signs of a reversal….

Today was the start of what will be a busy week for US data releases.  U.S. retail sales rose 1.4% in October surpassing expectations of a 0.9% rise and motor vehicles and parts rose 7.4%.  Excluding gasoline, autos and building materials, retail sales rose 0.5%, which makes this a third consecutive month of gains.

These figures support the opinion that the US economy is going to continue with its recovery during Q4.  In order to support the ongoing economic recovery and support the labour markets, the Fed are likely to maintain rates around 0.00%-0.25% for some time to come.

So what does this mean for the US Dollar?  Well today Bernanke made comments that supported a strong dollar which did give some initial signs of boost during intraday trading sessions however this was short lived and there was some downside pressure on the dollar for the remainder of the session.

USDJPY

Looking here at the USDJPY  from a technical perspective we are trading below the 50 and 200 day Simple Moving Averages, we broke through previous support levels and made new lows for the day; for the moment the downside prevails.  There is some support around the 88.31 level; if we break through that then further downside can be expected.  We will wait to see if we can hold this support level; a failure to close below this support may prompt signs of a reversal….

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EURUSD: Signs of a Bear

Tuesday, October 27th, 2009

Today we saw EURUSD decline to its lowest level in three weeks after breaking through support @ 1.4845.  Looking at the chart we can see that yesterday’s move down gave an indication of a bearish reversal; not quite a textbook Bearish Engulfing Pattern.  The signal is strengthened by the continuation of the move down.  There is some support around the 1.4800 level and if we see a major breach or a close below this level then there is a possibility of some more moves down in the following days.

Picture1

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Sterling: take your bets

Monday, October 26th, 2009

Opinion is really split on British Pound.  Friday saw large drops in GBP after the UK economy failed to escape the last of the recession.  Estimates of GDP show that the economy contracted 0.4% in the third quarter despite the lowest interest rates since 1964.

Goldman Sachs came out today stating that the economic downturn is being overplayed making GBP too cheap.  RBS on the other hand, who are one of the biggest FX traders, said that they expect the pound to weaken further and their outlook is echoed by a number of other large institutions.
We saw positive gains in the first half of last week for GBP on the back of rumours of interest rate rises.  In our view, once we see an actual rise that might be the catalyst for a reversal on the pound or at the least we will see some sort of bounce back.
We cannot be sure when these macro shifts will take place.   The Bank of England expected the UK economy to expand over the second half of the year but we have not seen much evidence of that.  But we can always find a story in the technical’s…
We have made a 50% retracement from the recent lows and critically we have crossed over and above the 200 day moving average.  We have some support around the 1.555 region which includes a double bottom.  For the moment this market is moving sideways and a breakout from this could give an hint as to the next long term direction.

Goldman Sachs came out today stating that the economic downturn is being overplayed making GBP too cheap.  RBS on the other hand, who are one of the biggest FX traders, said that they expect the pound to weaken further and their outlook is echoed by a number of other large institutions.

We saw positive gains in the first half of last week for GBP on the back of rumours of interest rate rises.  In our view, once we see an actual rise that might be the catalyst for a reversal on the pound or at the least we will see some sort of bounce back.

We cannot be sure when these macro shifts will take place.   The Bank of England expected the UK economy to expand over the second half of the year but we have not seen much evidence of that so far.  But we can always find a story in the technical’s…

GBP

GBP has made a 50% retracement from the lows in the first quarter and critically we have crossed over and above the 200 day moving average.  We have some support around the 1.555 region reinforced by a double bottom.  For the moment this market is moving sideways and a breakout from this will give a hint as to the next long term trend.

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