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Market Research June 9th
Market Analysis June 9th 2009
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.
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.
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.
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.
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.
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
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.
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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.
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