Sample Category Title

USD/CHF - 1.0054

Original strategy :

Buy at 0.9950, Target: 1.0050, Stop: 0.9915

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9950, Target: 1.0050, Stop: 0.9915

Position : -

Target :  -

Stop : -

The greenback remained confined within near term established range and further sideways trading is in store before recent rise from last week’s low at 0.9813 resumes, above resistance at 1.0079 would extend further gain to previous resistance at 1.0109, however, loss of upward momentum should prevent sharp move beyond latter level and reckon 1.0140-50 would hold, risk from there has increased for a retreat to take place later. 

In view of this, would not chase this rise here and would be prudent to buy dollar on pullback as support at 0.9948 should limit downside. Below 0.9925-30 would abort and signal top is formed instead, bring correction to 0.9905-10 but reckon previous resistance at 0.9869 would hold from here. 

GBP/USD - 1.2430

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although the British pound has retreated after meeting resistance at 1.2506 and test of support at 1.2419 cannot be ruled out, break of 1.2400 is needed to revive bearishness and add credence to our view that the rebound from 1.2377 has ended at 1.2559 earlier, bring further fall towards this support first. Looking ahead, only break there would extend recent fall from 1.2616 to 1.2350 and later towards 1.2325-30.

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. Above 1.2475-80 would bring another test of 1.2507 but only break there would shift risk back to upside for a stronger rebound to 1.2520-25, then towards indicated resistance at 1.2559. As near term outlook is still mixed, would be prudent to stand aside in the meantime.

EUR/USD - 1.0635

Original strategy  :

Sell at 1.0725, Target: 1.0610, Stop: 1.0760

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.0725, Target: 1.0610, Stop: 1.0760

Position : -

Target :  -

Stop : -

As the single currency has remained weak after recent selloff, bearishness remains for the decline from 1.0906 to extend further weakness to 1.0620, then test of previous chart support at 1.0600, however, a sustained breach below the latter level is needed to retain downside bias for subsequent selloff to 1.0570-75 first.

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 1.0720-30 should limit upside. Only a firm break above resistance at 1.0773 would suggest low is formed instead, bring a stronger rebound to 1.0800 but resistance at 1.0827 should remain intact. 

USD/JPY - 110.62

Original strategy  :

Sell at 111.30, Target: 110.30, Stop: 111.65

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 111.30, Target: 110.30, Stop: 111.65

Position :  -

Target :  -

Stop : -

Although the the greenback fell briefly to 110.13, as dollar has rebounded after holding above support at 110.11, suggesting further consolidation above this level would be seen and corrective bounce to 111.00 cannot be ruled out, however, reckon upside would be limited and resistance at 111.46 should remain intact, bring another decline later, below said support at 110.11-13 would confirm medium term decline has resumed for further subsequent fall to 109.80-85 (1.618 times projection of 112.20-111.12 measuring from 111.59) but price should hold above 109.50-55 (100% projection of 112.20-110.27 measuring from 111.46).

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 111.20-30 should limit upside. Only above 111.46 resistance would abort and prolong choppy trading, risk rebound to 111.59, then towards 111.90-00 later but price should falter well below said resistance at 112.20. 

EUR/JPY - 117.70




EUR/JPY: Wave v as well as larger degree wave (C) ended at 94.11 and first leg of larger degree wave C upmove has possibly ended at 149.79 and wave 2 correction has possibly ended at 109.49.




As the single currency has fallen again after brief recovery and broke below indicated previous support at 118.24, adding credence to our bearish view that the decline from 124.10 top is still in progress and downside bias remains for the erratic decline from 124.10 top to extend further weakness to 117.00 (61.8% Fibonacci retracement of 112.61-124.10) but downside should be limited to 116.00 and price should stay well above 115.00, risk from there is seen for a rebound to take place later.

The daily chart is labeled as attached, early selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), hence, wave (C) has possibly ended at 94.12 with a diagonal triangle as labeled in the daily chart, hence upside bias is seen for further gain. Recent rally above indicated retracement level at 116.69 (50% Fibonacci retracement of the intermediate fall from 139.26-94.12) adds credence to this view and signal major reversal has commenced but first leg of this wave C has possibly ended at 149.79, hence wave 2 has commenced with wave A ended at 126.09, followed by wave B at 141.06, wave C commenced and could have ended at 109.49, above 125.00 would add credence to this view. 



On the upside, although initial recovery to 118.35-40 cannot be ruled out, reckon upside would be limited to 119.05-10 and price should falter below 119.80-85, bring another decline later. Only a daly close above indicated resistance at 120.44 would defer and suggest low is formed, bring a stronger rebound to 120.90-00 and possibly 121.30-35 but price should falter well below resistance at 121.84, bring another decline later. 


Recommendation: Sell euro at 119.75 for 117.15 with stop above 120.75.

To re-cap the corrective upmove from the record low of 88.93 (18 Oct 2000), the wave A from there is subdivided as: 1:88.93-113.72, 2:99.88 (1 Jun 2001), 3:140.91 (30 May 2003), 4:124.17 (10 Nov 2003) and 5 ended at record high of 169.97 (21 Jul 2008). The brief but sharp selloff to 112.08 is viewed as a-b-c x a-b-c wave (A) of B. The subsequent rebound to 139.26 is (B) of B and (C) of (B) has possibly ended at 94.12 and in any case price should stay well above previous chart support at 88.93, bring rally in larger degree wave C towards 150.00.

The pair maintains overall bearish bias despite long-legged candles in past couple of days that signaled hesitation at key 110.00 support zone. Repeated rejection at daily Tenkan-sen 111.14 yesterday and today's spike to former low at 110.09 were bearish signals. Renewed demand for safe-haven assets keep yen supported along with firmly bearish technicals. Final break below 110.00 zone (110.09 base / 109.91 – 50% retracement of 101.17/118.65 rally) would trigger fresh acceleration lower and expose 109.30 /108.81 projections and 108.00 in extension. Weekly close below 111.36 (weekly cloud top) is needed to confirm bearish stance. Alternative scenario will be activated on sustained break above 111.36. US NFP data are in focus.

Res: 110.99, 111.14, 111.36, 111.43
Sup: 110.09, 109.91, 109.30, 108.81

USD/CHF –  1.0061

 
USD/CHF – Wave IV ended at 1.1730 and wave V has possibly ended at 0.7068

 
As the greenback found good support at 0.9815 late last month and has staged a strong rebound from there, adding credence to our view that low has been formed there and consolidation with mild upside bias is seen for further gain to 1.0105-10. Having said that, price should falter below resistance at 1.0171, bring retreat later. In the event dollar breaks above said resistance at 1.0171, this would revive our bullish view for the erratic rise from 0.9861 to extend further gain to 1.0200 and possibly test of resistance at 1.0248, however, a daily close above there is needed to signal the retreat from 1.0344 has ended at 0.9861, bring eventual retest of 1.0344.

Our preferred count on the daily chart is that early selloff to 0.9630 is an end of the larger degree wave III and major correction is unfolding from there with a leg ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), wave b ended at 0.9910 with (a): 1.0370, (b): 1.1967, (c): 0.9910. The rise from there to 1.1730 is the wave c which also marked the end of wave IV and wave V has possibly ended at 0.7068.


On the downside, whilst pullback to 0.9995-00 cannot be ruled out, reckon downside would be limited to 0.9945-50 and bring another rise later. Below 0.9900 would suggest the rebound from 09815 has ended instead bring another fall towards said support at 0.9815. Looking ahead, only a break below this level would confirm another leg of major fall from 1.0344 top is underway for further fall to 0.9735-40, however, oversold condition should prevent sharp fall below 0.9675-80 and price should stay well above 0.9600, bring rebound later.
 
Recommendation: Stand aside for this week

Dollar's long-term downtrend started from 2.9343 (Feb 1995) and it was unfolding as a (A)-(B)-(C) with (A): 1.1100, (B): 1.8310 (26 Oct 2000), then followed by another impulsive wave (C) with wave III ended at 0.9630 (Mar 2008). Under this count, correction in wave IV has possibly ended at 1.1730 and wave V already broke below support at 0.9630 and met indicated downside target at 0.7500 and 0.7400. The reversal from 0.7068 suggests the wave V has possibly ended and the breach of resistance at 0.9595 add credence to this view and indicated upside target at 1.0000 had been met, however, the sharp retreat from 1.0296 to 0.7401 suggests choppy trading would be seen but price should stay above said record low at 0.7068.

'We continue to highlight GBP's vulnerability to a break above 1.25, given the extended bearish positioning and the potential for adjustment.' – Scotiabank (based on FXStreet)

Pair's Outlook

The US Dollar managed to outperform the British currency, but failed to carry out the anticipated retest of the support cluster around 1.2420. With today's US NFP data being the main market mover, the Cable has the opportunity to reconfirm the bearish trend-line at 1.2549 and possibly even pierce it should the employment figures disappoint. Technical indicators are also in favour of the positive outcome; however, we should not rule out the possibility of the NFP data surprising to the upside, in which case the substantial demand area circa 1.2420 could easily be pierced.

Traders' Sentiment

For the fifth consecutive day market sentiment improved, as now 59% of all open positions are long. Meanwhile, all pending orders are equally divided between the buy and the sell ones.

'The fact that the dollar hasn't broken under 110 on this news [US conducting air strikes in Syria] shows how strong that level is, but we are still waiting to see Russia's reaction to the U.S. move.' – Sumitomo Mitsui Trust (based on Reuters)

Pair's Outlook

There has been barely any movement registered in the USD/JPY currency pair for the third day in a row yesterday, with the 110.50 mark still proving to be a tough psychological support. Today's NFP data is a double-edged sword, as from one hand the psychological support suggests the Greenback could continue avoiding further losses, while on the other technical indicators imply the given pair could fall under 110.00. Such a decline would even pave the way towards the descending channel's support line at 109.26 to be put to the test, which is also bolstered by the monthly S1, the weekly S2 and the lower Bollinger band. We expected the US Dollar to decline today.

Traders' Sentiment

Traders' sentiment remains bullish at 67%, but the share of purchase orders is significantly higher, up from 34 to 54%.

'Bonds, the yen and gold jumped in Asia on Friday, while stocks slipped, as investors turned to safe-haven assets after the missile strikes.' – James Regan, Reuters

Pair's Outlook

On Friday the yellow metal's price jumped due to events in the world. The bullion's price surged due to the missile strikes conducted by the US on Syrian airfields. From a technical viewpoint the bullion passed the 200-day SMA at 1,255.71 and the weekly R1 at 1,259.70 level to trade at 1,269.33 during one point of the session. It is highly possible that the bullion will continue the surge, as events occur during the day. In such case the commodity price would most likely surge up to the weekly R2, which is located at the 1,271.04 level. The weekly R2 marks the beginning of a strong resistance cluster.

Traders' Sentiment

SWFX have become neutral bullish on the metal, as 51% of open positions are long. However, buy orders have decreased from 61% on Thursday to 51% on Friday.