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Mysticforex

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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.

EURCHF1095_1.png.bce52855cc24b5e2c2a2af38c30bdcb0.png

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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.

CL13151.png.12d744c8841f0795c509f2aa30ca53b3.png

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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.

USDJPY011515.png.08a25c4aaa3e94eaa97a2f60b9925757.png

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The action in EUR/CHF today was unprecedented as the SNB simply walked away from the peg and allowed the franc to appreciate by nearly 20% in an instant. The cross is now trading at parity and the key question is where now given the massive adjustment that has already occurred. Although it is tempting to believe that the pair will slide further, the most likely scenario is consolidation and some short covering rally as the event of today have grossly exaggerated the balance between the two pairs. First and foremost the sharply negative rate on the Swiss bank deposits means that investors will now lose 75bp to carry alone. Few investors will be willing to accept the slow depletion of their capital for a long period of time. Secondly the ECB may surprise the market by not doing full QE at its meeting next week. Any "positive shock" on the euro could trigger a pretty vicious short covering rally in the pair. That is why short trades at this point should be considered with care.

Technically there is simply no credible support points, but the parity level seems to be a psychological magnet and will be support for now.

EURCHF_01_16_15.jpg.147535d46fcb5e0241eca27ebd22d894.jpg

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What next for the EURO?

 

 

On a technical basis, EUR/USD has already fallen below the November 2005 low of 1.1645 and below the psychologically significant 1.15 level to a low of 1.1460. For now, 1.15 is still an important support level to watch because the currency pair ended the week above this rate. However the main support for EUR/USD right now will be the 61.8% Fibonacci retracement of the 2000 to 2008 rally at 1.1215. On the upside, the 1.1645 support is now resistance.

EURUSD011915.png.511583cd4cea26edd283e9cc81bb0730.png

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Technically, AUD/USD is attempting to break the top of its ascending triangle and I believe that it will happen in a more convincing way over the next week. When that occurs, a stronger move towards 84 cents is likely. In the meantime, the swing low of 0.8033 is support.

AUDUSD012015.png.a8fc07538af9cddccdc76e4d77c94a5a.png

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Oil dropped another 5 dollars today hitting a low of $46/bbl and dragged loonie to fresh lows as USDCAD soared through the 1.2000 and 1.2100 levels. The pair is now at highs not seen in 6 years and the key question is can it rise further? Of course the main driver will be oil - which is a key component of the Canadian economy especially in the western part of the nation. However although oil continues to drip lower its rate of decline has slowed and it looks like it may find a bottom in the mid 40'sb for now. If oil can stabilize the loonie is due for a bounce, especially if the BOC meeting tomorrow reveals no new policy initiatives. If however the BOC does something unexpected like lower rates all bets are off and USDCAD can climb to 1.2500

 

 

Technically, USDCAD has made a clean break out today, but on longer term charts the 1.2000 level was former support so it could prove to be new resistance. Still only a break below 1.1800 would disrupt the bullish bias in the pair

USDCAD_01_20_15.jpg.52daed8924de9f43330036336cc44b07.jpg

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Technically, NZD/CAD pulled back from its highs and we think this is a great value level for the currency pair. There is support at 92 cents and no major resistance until the June and July highs near 0.9450/0.9475.

NZDCAD012215.png.d4312965dd812f7d5a6bc586adfe87a0.png

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Euro At 12 Year Lows

 

Euro has now hit 12 year lows breaking through the 1.1400 level after ECB announced its QE program. After hemming and hawing the market finally decided that the program was not going to be enough to revive the EZ economy plus its convoluted structure has given market little confidence that it can succeed. However the lower euro may be doing the work of ECB for it as the decline in euro and decline in oil prices should have a positive impact on EZ businesses. Tonight's EZ PMIs will give us the first hint of whether the demand is picking up.

Having broken all the key levels the long term target on the euro now looks to be the 1.1000 level. However for now the pair could find support at 1.1300 and rebound to 1.1500

EURUSD_01_23_15.jpg.c6b55c39a113baf293fc67af2f534e98.jpg

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Now that AUD/USD has fallen below 80 cents and below the 61.8% Fibonacci retracement of the 2008 to 2012 rally, the next stop for the currency pair should be the 2007 swing low of 0.7675. As long as AUD/USD remains below 0.8050, the downtrend remains intact.

AUDUSD0126153.png.86c7a28c9eac516a54d3b14ff7edcafe.png

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NZD/JPY

 

 

Technically the 87.00 is key support for the pair and break there opens a run towards 85.00. On the other hand a close above 89.00 would suggest that the pair has found firm support and may be ready to rally

NZDJPY1_27_15.jpg.308777699691f2d1de57f1e672a1ed36.jpg

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The RBNZ has shifted from a tightening to neutral monetary policy bias and the New Zealand dollar collapsed in response.

At this point, there is no major support in NZD/USD until the 2011 low of 0.7118. Resistance remains at 75 cents.

NZDUSD012815.png.b915e4ba1153420067f954070e4be779.png

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Making a bottom?

 

Technically the 7400 level is the key support in cable and as long as it holds the pair should consolidate with an upward move towards the 7600 figure. A break of 7400 however would be very bearish and would open up the prospect of a move towards 7200.

EURGBP.1_30_15.jpg.95838d25f8125067face6738baa570b4.jpg

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USD/CAD to 1.30? USD/CAD raced to a high of 1.28 on the back of weaker than expected GDP numbers and while the loonie recovered part of its losses by the end of the North American session, the uptrend remains intact. Over the past month, the currency pair soared over 1000 pips or 8% to its strongest level in 5 years.

USDCAD020115.png.5c097de2e2e7fdb0a8fc72fe9b534108.png

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Technically, the main support level for AUD/USD is below this year’s low at 0.7675. If this level is broken, it should be clear sailing for AUD/USD down to 75 cents. If the RBA does nothing and AUD/USD pops, resistance is at the 61.8% Fibonacci retracement of the 2008 to 2011 rally around 0.7950.

AUDUSD020215.png.6a06c6b21ecbb0dc2c196439f23465e7.png

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Technically 1.2800 now represent the major top in the pair and a break above that could signal a move towards 1.3000 while support comes in at 1.2200 and the also at 1.2000 on any further retrace of the big rally

USDCAD_02_04_15.jpg.80e5ea86d46d3b80c73217e153180887.jpg

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USD/JPY

 

 

 

The pair has been trading in a very tight 117-118 range for a considerable period of time and such low volatility typically leads to a vol explosion one way or the other. The pair needs to retake the 119.00 figure to establish a bullish bias while a break below 116.50 opens the prospect of a test of recent lows at 115.00

USDJPY_02_05_15.jpg.33b51a0e7308e587c225df70974daafc.jpg

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Technically, Friday’s rally took USD/JPY out of a 2.5 week long consolidation. The next resistance or stop for the currency pair should be 120. We don’t see USD/JPY breaking back below 117, the current support level for the pair.

USDJPY0209151.png.25ce23d9140ea99c13d07eabc71bf7b8.png

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Breakout? Which way?

 

Taking a look at the daily chart of USD/CAD, the February low of 1.2352 is currently support. If this level is broken, there is no major support until 1.2115. As for resistance, if 1.26 is broken, it should be smooth sailing up to 1.28.

USDCAD020915.png.9ce131ac399d2eb9b8af8241035adb67.png

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GBP/AUD

 

Technically the pair is on the verge of a multi-year breakout and a move through the 1.9700 level could open a run towards the key 2.000 level. Meanwhile support rests at 1.9400 and even stronger support at 1.9000.

GBPAUD_02_10_2015.jpg.09ee44629953eeead69fc9ca63ad0718.jpg

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EUR/USD Ready for a breakout?

 

Taking a look at the daily chart EUR/USD is definitely prime for breakout and it looks like it's testing the top of its range with an upside breakout likely. If your dollar breaks one 1.1450 the next resistance is 1.15 followed by 1.1640. If your dollar brakes below 1.1270 the next support will be the 61.8% Fibonacci retracement of the 2000 to 2007 uptrend at 1.1220.

EURUSD021615.png.c9d5851b81f243e8c5a5b9789dc275e6.png

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USD/JPY in the crosshairs.

 

The technical picture in the pair is as uncertain as the fundamental one. On the negative side the pair continues to make lower highs, but on the positive side its is making higher lows. Such tight compression of price action typically leads to a breakout one way of the other. On the upside the key level remains the 120.00 figure while on the downside the 116.00 is vital support.

USDJPY_02_17_2015.jpg.2b05cb540be7962a36faa0aa8d60877d.jpg

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