Market Research June 9th
Market Analysis June 9th 2009
EURUSD
Anyone who doubts the power of the 20EMA, consider this, the EURUSD, GBPUSD, AUDUSD and USDCAD all touched the 20EMA on the daily charts, all bounced/rejected off of it, and none closed above it. The smallest rejection from it has been roughly 150pips so the pair is definitely respecting it. Although we wanted a close below it to start a nice round of selling, the pairs are not totally ready to do it just yet. Ultimately, with the Momentum and CCI readings for EURUSD, we do not expect the recently carved highs in EURUSD just north of 1.4300 to be breached on this bounce. Instead, we expect a rally to be sold and a break of the 20EMA on the daily charts this week or early next. Until we get the close below, selling is only recommended around the 1.4300 level or an aforementioned daily close below the 20EMA. Buying a sustained hourly close above 1.4100 is also an option.
USDJPY
These days, I really hate even addressing this pair but such is life as the pair exists in such terrible technical waters. Cloud thin-ness suggests stay away. Oscillators are all over the place which suggest we stay away. With only the 38.2%fib being respected while the other two were dissed, we are staying away. Basically, I cannot find any technical reason to trade this pair and would rather pull splinters out of my big toe than trade this pair.
GBPUSD
Intraday cloud formation looks legit with a smooth and dense cloud climbing steadily while price action is maintaining its distance suggesting strength short term is with the buyers. We are closely watching for a Strong Tenkan/Kijun cross to the upside. Any move would likely target 1.6445, then 1.6520 and 1.6590. A break of here suggests possible attack on 1.6730 but be careful for rejection at the yearly highs.
AUDUSD
The aussie may want to continue its rally for another leg up as the 30m cloud supports the move. Watch for a tankan/kijun cross to the upside which would re-attack .8040, .8155 and .8230. An hourly close above here could inspire technical buyers to come in and target 8300 and 8500. The pair is showing resilience so we are cautiously buying via Ichimoku signals and will consider selling at yearly highs if the 30m oscillators look tired.
USDCAD
The Loonie broke the 6 day pattern of alternating up/down candles on the daily chart with two days of consecutive selling. The daily bounce off the 20EMA activated an evening star pattern which is generally seen on large uptrends so we will only take intraday sell signals via Ichimoku or on a break of the yearly lows just south of 1.0800. The 30m chart is setting up for a potential Tenkan/Kijun cross and the cloud has some thickness to it so if the pair maintains its current levels going into London, then starts a strong sell off, the current S3 pivot lows will be under pressure and if they fold, we expect 1.0950, 1.0850 and 1.0772 to be the next downside targets. Keep in mind today’s S3 pivot held two attacks so look for an hourly close below before selling on breaks. Oscillators will need to find new downside life to carry the momentum south with fervor.
EURJPY
If you’re a masochist or enjoy trading unclear technical plays, the EURJPY is your go to pair. Wicks on the dailies have no consistency giving equal views in length but changing sides going north and south. Two days up, one day down seems to be the only pattern besides a short term Tenkan holding on the daily charts for the last 15 days. However, we feel there are far better technical plays out there with the DOW showing no clear direction. We suggest waiting to trade this pair when the DOW has a day or two of 150pt gains/losses before taking action on the
GBPJPY
Taking a second shot at the 160 barrier, a possible low risk, small stop rejection play may be viable just above the round number. If we see a 1-2hour close above 160.45, then we expect the pair to find higher ground. The daily oscillators suggest there is a > 50% chance of this happening and will only take reversals/rejections with 2-4hour charts confirming the play via evening star, piercing pattern or ideally outside reversal on 4hr or daily charts. We would be open to taking a Tenkan/Kijun buy signal above the cloud on the 30m charts but the two lines are too close now and seem content to stay that way going into London. However, a 50-75pip breach of the Daily Tenkan (at 156.84) could ignite technical selling towards the 155 big figure and possibly 154.12 (20EMA). Trade with smaller positions and look for additional confirmation.
Analysis provided by 2ndSkies. No copy or reproduction without permission.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Weekly Market Research June 1st
Market Analysis June 1st 2009
EURUSD
Swinging here and there, this pair is skipping the B-Line and heading upward in small waves. It suggests decent confidence but nothing overwhelming. Thus, instead of buying breaks or closes, we suggest waiting for the general expression to come in line which is wait for a pull back to the Tenkan (white line) while placing stops below the 20EMA. You could also buy on 20EMA touches with tight stops below while targeting the next fib in the sequence. The pair has responded to both the 38.2 and 50% fibs so we expect upside targets to be the 1.4500 handle and the 61.8fib which stands at 1.4615. Cloud analysis says bullish strength is still clearly in play while it climbs but it is starting to thin. CCI and Momentum models suggest medium strength is still left in the trend so buying pullbacks as the suggested strategy is the way to play.
USDJPY
A bloody mess if you ask the British character in me (fyi – I have no British but like the accent and phrases). This chart is all over the place and we refuse for now to trade it in any fashion. It ended last week with an enormously bullish candle testing the Kijun, then selling off violently only to launch up again and retest the Kijun. In/out/in the cloud is a game not worth playing. We are staying away for now. Our strategy is avoidance.
GBPUSD
Now this a strong sailing pair which has climbed 15 out of the 21 days in May and started June with a 360pip climb from market open on Sunday. Buying breaks of key levels has worked pretty well as of late so we are either entering the latter phases of the trend or in a place of good strength. Waiting for a dip to the Tenkan seems too cautious so an alternate strategy is to wait for the next inside bar on the dailies then play a break to the upside. The only three upside targets are the 1.6660 (oct. 30th 09’ Swing High), the 1.6836 (50% fib of 08’peak) and 1.7000 being the big figure.
AUDUSD
Tiring but still in the fight like Rocky Balboa, the ascending cloud shape along with the Tenkan below price and the fact the pair only sold off only five days in May suggests the only real money to be made is on buying. The pattern suggests wait for a day of selling first as it has not been accompanied by a second round of selling since early April. Ideally, make sure the selling day has been solid as almost every selling day has closed towards the lows.
USDCAD
Only one legitimate fib retracement in the last three swings, the pattern is erratic at best neither stopping at the 20EMA or the Tenkan line. Price Action patterns suggest waiting for a inside day then break below or after a day of buying since no two days of buying has happened since mid April. Selling is still clearly preferred.
EURJPY
A relative mess but clearing up now that things are close to the 09’ highs at 137.48 currently about 100pips below. One can play the rejection of the highs but with momentum this strong at pointing up, along with the solid two day CCI high bar readings, we feel this would be troublesome for now.
A daily close above the highs could be a solid play but the candles are all over the place so the next best option is to wait for a bearish engulfing pattern to play out, then take the 50% retracement of the engulfing candle and sell there with stops above the previous swing high.
GBPJPY
Out of the last 9 days of buying candles, 7 of them have had wicks to the downside of 100pips length or more. This patterning suggests dips have offered good buying opportunities around a cents length dip from the open. If the market bounces off the lows and clears the open price the follow up buying should be strong on the following day. Watch how the market responds to the 160.00 level but we do not expect price to break the R3pivot tomorrow.
Analysis provided by 2ndSkies. No copy or reproduction without permission.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.