Euro Leads European Pairs

Eur/Usd The four hour trend is short. The pair has followed the S&P futures market lower and formed a 13 day slide that took the pair from 1.4650, down to test 1.3850, and to areas not seen in seven months of trade. The move out of the euro has taken pressure off Euro-zone export prices, and in the week of the ECB rate decision traders will be looking for signs that a reversal is close. Daily Chart: ATR is 135 pips. RSI is oversold. SMA is resistance. Favor a straddle.

Gbp/Usd The four hour trend is short. Gbp/Usd is still trading within a daily chart sideways channel that has held as support and resistance since May 2009. In the week of the Bank of England rate decision there is no reason to think that a break and hold will now happen, if it has not held before. The pair is back into the price points formed in early January. Daily Chart: ATR is 160 pips. RSI is just under neutral. SMA is resistance. Favor an oversold bounce.

Usd/Chf The four hour trend is long. The pair recently broke through the 4 hour chart channel that has been in place since September 2009, and in doing so gets the pair into another price channel that started in May 2009. If the near-term moves hold, in reaction to Usd buying that is linked to Treasury note purchases, it will likely lead to this pair stagnating in the same 300-400 channel that held it last summer. Daily Chart: ATR is 105 pips. RSI is heading towards over-bought. SMA is support. Favor a straddle.

Commodity and Yield Pair Review

Aud/Usd The four hour trend is short. The pair is deeply oversold on the near-term reads as the daily chart heads for the swing point low that was set in December. At that time the pair bounced higher from 0.8650 to test the channel range at 0.9550. The same price point was were a huge collapse happened in Jul 2008, but ahead of an expected increase in rates from the RBA on Monday, favor a long bounce. Daily Chart: ATR is 120 pips. RSI is heading to oversold. SMA is resistance. Favor an oversold bounce.

Usd/Cad The four hour trend is long. The pair is pushing into the top of a 4 hour chart range that has sent price action lower on each test that has happened going back to Nov 2009. The last 4 trading sessions have been unable to move things too far, either way, and the path of least resistance looks to be lower if equities, oil, and gold can find buyers. If not, a test of Oct 2009 1.0890 may hit. Daily Chart: ATR is 105 pips. RSI is heading towards over-bought. SMA is support. Favor a straddle.

Usd/Jpy The 4 hour trend is short. The Usd/Jpy pair has been playing tag with the major moving averages over the last 10 days, and in doing so has created a strange looking set of near-term charts. The pair has bucked the long-Usd trend that has held steady recently, in the face of threats from the Japanese Finance Ministry that an over-valued Jpy will be addressed if the market does not adjust Usd/Jpy weakness, Daily Chart: ATR is 105 pips. RSI is at the neutral line. SMA is support and resistance. Favor a straddle.

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