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Forex Trade Setups June 27th
GBPUSD – Coming up to a critical Fib/Support Level
Since the beginning of May and printing the yearly high just a shade above 1.6700, the pound has fallen virtually 6 out of every 10 trading days and has shed over 700pips since then. Whatever buying interest was there for the first half of the year is clearly gone now. What is important to notice is the pair is approaching a critical 61.8% fib of the 1300pip run which started in the end of Dec. 2010 lows to the May sub 1.55-1.67 highs. This fib also lines up with the December highs just under 1.5900 so this could be a place where the bulls try to make a stand before waiting till 1.5600 before taking another stab at it. For now, watch the 50% fib as the upside resistance short term coming in at 1.6049 for clues. Any serious rejection or failure here suggests the market is gunning for the last fib standing. Below that, expect the pair to sink about 275more pips before finding serious buyers.
EURGBP – The other side of the coin?
While the EURUSD has been holding its ground better than its big brother the sterling, this has setup some steady gains in the EURGBP cross since late May and is also coming up against some critical barriers just north of current price action. Other than the sell-off in early June, the pair has recovered decently and is back approaching the June highs of .8973 – only 21pips from current price as of this writing. But what really looms ahead is the all-time highs of .9041 which happend in early May of this year. This level could be an interesting point for sellers should any major issues with Greece further exacerbate any regional tensions. Often times, markets look for excuses to sell at critical levels so any major news happening around the all-time highs could really send this pair lower. But for the most part of this year, the Euro has been outpacing the GBP and the bounce off the 61.8% delineated below targets .9464 which is almost 500pips north of current price and 420 above the all-time highs so longs can wait for a daily close above the all-time print, perhaps even a weekly close and then look to carry longs up to the 100% projection of the 61.8% fib.
AUDNZD – Did it find a bottom?
After selling off the last two months and shaving off 900+pips, the pair has run into a critical support level which was the double bottom for the pair in Jan/Feb this year and also the prior resistance level in early Sept. 2010. Since then, the pair has rallied quite strongly while the AUDUSD has underperformed. After bouncing 300pips off this major low at 1.2800, the pair ran into the daily 20ema which was simply too much. But look at the price action which was not super convincing. Since then, the pair has rejected again off the 20ema denoting its importance but the pair is showing signs of a bottom. Should the pair take out the 20ema, the last hurdle in the short term would be the 1.3183 level which was the June highs and April lows of this year, but also a major resistance level for Oct/Nov. of 2010 so watch this level seriously for a rejection. Bears can consider this a solid level for parking their shorts but a break of this suggests the pair will likely return to the 1.3400 levels before encountering further adversaries.
Dow Index – Making a stand at the 50% fib
After a dramatic early May sell-off that caused the index to lose almost 100opts selling off 2 out of every 3 days, the index has found some support at the critical 50% fib of the 10927 low to 12919 highs. Even though its been hemmed in by the daily 20ema (which is getting lower each day), the index is holding the line below as well. This range is actually healthy because the longer it holds, generally the breakout is strong so we should be expecting some volatility likely by the time July kicks off. With that being said, those thinking they want to wear horns should place their buys near the June lows (and I’ll confess to being one while its below 12169) can sell at the aforementioned level which happens to be the 38.2% fib of the major move and also prior support in late April of this year. Should the market keep selling and take out the prior lows from this month, expect a min. run to 11700 before finding any new buyers.
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