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Mysticforex
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Everything posted by Mysticforex
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Taking a look at the daily chart of USD/JPY, the December low of 115.57 is the key support level to watch. We expect this level to hold but if it breaks, the next stop will be 114. On the upside, near term resistance is at 118. A break above that puts 120 back in sight.
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Swiss Central Bank suddenly abandons exchange raye cap on Franc. Intervention always fails in the end
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USD/CAD – Potential Failure at 1.20 Taking a look at the monthly chart of USD/CAD the currency pair has obviously had a very nice run. The 1.20 level is a psychologically significant level for the pair and one that was a former support turned resistance in 2005/2006. If you take a look at the daily charts you will also see that in 2008 when USD/CAD first made a run for 1.20 it’s rally fizzled at that level. We think the same will occur this time around especially since oil is oversold and approaching its own trendline support. While 1.20 is a psychologically significant level, 1.2120 is a key Fib level that should contain gains. This explains why our stop on the USD/CAD Big Short Trade is above this resistance. Should the currency pair pullback, there is no support until 1.18.
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Other AUD & NZD Pair Discussions (GBPNZD, EURAUD, AUDCAD Etc.)
Mysticforex replied to TL Staff's topic in Forex
For the first time since October, AUD/NZD is attempting to close above its 20-day Simple Moving Average. Historically, this has been a strong signal for short and medium term reversals in the currency pair. In 2014 AUD/NZD closed above the 20-day SMA on 8 occasions and 8 out of 8 times, which is 100% of the time its move extended for a minimum for anywhere between 40 and 300 pips with an average gain of 170 pips. -
A reason for the A$ weakness is the strength of the USD. Speculators have aggressively sold the euro, where there are multiple major problems, and the Japanese yen where PM Abe is taking Keynesian economics to the limit. But the third largest short position speculators hold at the CME futures market is in the A$. The COT report issued January 9th showed specs to be short 73.4K contracts of futures and delta adjusted options. The Friday report also showed the USD long has reached new records.
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From a fundamental perspective we like buying EUR/CHF because we think that the Swiss National Bank will maintain the 1.20 EUR/CHF peg. However when it comes to looking at the technicals for EUR/CHF, the outlook is murky because the peg distorts the charts. 1.20 is obviously the main support level for the currency and if that is broken, the next technical support should be 1.1675, the 23.6% Fibonacci retracement of the 2007 to 2011 decline. If 1.20 holds, the second chart below indicates that 1.2050 should be near term resistance. Of course if the Swiss National Bank suddenly intervenes, we’ll see EUR/CHF on the 1.21 handle.
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EURAUD has broken all support, but for now has found buyers at the 1.4500 level. A break there opens a run to 1.4000 while only a rally above 1.5000 negates the bearish bias.
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USD/JPY has set a lower top at the 120 level and is now looking like its is rolling over on the way to test the support at the 116.00 spike lows. A break of that level would be a major bearish sign while only a close above 120.50 would reestablish a bullish bias.
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GBP/USD dropped to a fresh 1 year low on the first official trading day of January. There’s significant downside momentum in the currency pair, which experienced 6 consecutive months of losses. The break below the 23.6% Fibonacci retracement of the 2007 to 2008 decline leaves 1.50 as the next significant support level for GBP/USD. If that gives way, the next point of support will be at 1.48, the 2013 low. If GBP/USD reverses course and starts to recover, it should find resistance above 1.53.
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1.20 is a very important technical and psychological support level for EUR/USD but today’s move has taken euro below 1.2135, the 50% Fibonacci retracement of the rally that lasted from 2000 to 2008. So far, the currency pair has held this level but the support should be temporary. In the short term resistance is at 1.24 but the main resistance level for EUR/USD is 1.26, the November/December range high.
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Introduce Yourself Here - Don't Be Shy!!
Mysticforex replied to trading4life's topic in Beginners Forum
de_Grommet, Welcome to Traderslaboratory. Don't be afraid to ask questions. -
Taking a look at the monthly chart of USD/JPY, the current 5 year high of 121.85 is the main near resistance level for USD/JPY. If and when this level is broken, the next stop for USD/JPY should be the 2007 high of 124.15. Near term support is at 120 but as long as USD/JPY holds above 116, the uptrend is intact.
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In the past 3 decades, AUD/NZD has found buyers between 1.04 and 1.05. The current record low for the pair is 1.0475. If this level is broken, every big round number could be potential support starting at 1.04. Resistance is at 1.06.
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Agree. 12700 is the line in the sand. Above that I will look to buy bounces while reverting to a "neutral" bias.
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When it comes to EUR/CHF, the 1.20 peg distorts the effectiveness of technicals. Nonetheless, there are certain levels within the EUR/CHF breakout that is important. EUR/CHF needs to be trading above the December 2nd 1.2047 high to have any chance of extending its gains without intervention. If it drops back towards 1.2020, the 1.20 peg could be tested once again but we do not expect EUR/CHF to drop below 1.1990.
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After the BOJ announced their increased monetary stimulus at the end of October the USDJPY soared from 112.57 to a high of 121.84. Then the market relaxed and a bout of safe haven demand resulted in yen buying which took us all the way to a swing low of 115.57. Following this break the Fed's comments were deemed bullish for equities and the USD, and we rally to 119.31. So what is next?
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Techincally the EURUSD looks like it has curved out a strong support bottom near the 1.2250 level, but the base could just be a pause that refreshes in the overall downward draft. So a test of this level could be crucial as a break could open a move towards the 1.2000 figure
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Taking a look at the daily chart of USD/JPY, if the 115.50 support level breaks, the next target for a decline should be the 100-day SMA right below 112. If 115.50 holds and USD/JPY breaks back above 118, the rally should extend as high as 120, which is not only a psychologically significant level but also the 61.8% Fibonacci retracement of 1998 to 2011 decline.
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I have found that the big money traders usually go on vacation after the second week of December, which this year means after December 13. Dec 13 to end of the year is holiday trading with low liquidity and inconsistent trade directions. Anything can happen during that time and one can get badly beaten up if one tries to ride the trend or forecast direction during that time. Of course, there are always pairs and years that have proven the exception to the rule.
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The 8200 level remains the key support for the pair and a key break below opens up a run towards the psychologically important 8000 figure. Only a close above 8400 relives the selling pressure for the pair.
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The recent rebound in EUR/USD has taken the currency pair to the top of its month long range. 1.25 is near term resistance with 1.26 being the key level to watch. We do not expect EUR/USD to trade above 1.26. On the downside, a break of the former low of 1.2247 puts the currency on target for a move down to the 50% Fibonacci retracement of the 2000 to 2007 rally near 1.2145.
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The break of the 1.1500 level while important still does not provide clear sailing for the loonie because the pair has a resistance overhead all the way to 1.1700 so progress much beyond this point may be stalled. A break above however would open a run to 1.2000 while only a move below 1.1200 would negate the bullish bias
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While 1.50 is an important psychological level, taking a look at the monthly chart of EUR/AUD, the 1.5030 level is really key. Smart investors will put their stops slightly above 1.50 and not exactly at that rate so if EUR/AUD clears 1.5030, there is no major resistance until 1.5270, the 38.2% Fibonacci retracement of the 2008 to 2012 decline. If it fails at 1.50, there will be support at 1.4800.
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NZD/USD now finds itself testing the recent lows at 7650 and a break of 7600 would open a run towards the key 7500 support . The pair has very heavy resistance at the 7900 level and does not break its bearish bias until it can clear that barrier.