ANALYSIS

Technical Analysis 09 September 2013

GBP/USD

Strong bullish sentiment was found in the support zone around 1.4830, which pushed the pair to the upside reaching 1.5275 corresponding to 50% Fibonacci level, 1.5400 corresponding to 61.8% Fibonacci level, then 78% Fibonacci around 1.5533.

The uptrend line around 1.5430-1.5400 applied bullish pressure on the pair which was able to reach 1.5680 which corresponds to last week's highest level. The market expressed obvious closure of 4H above 1.5575 which invalidated the H&S reversal pattern. This renders the pair bullish towards 1.5750 in the short-term prospect.

It is important to note that the market expressed a strong bullish engulfing weekly candlestick unlike the preceding one. That's why, bullish momentum may be witnessed obviously during this week. 4H chart shows a broken bearish channel, the upper limit of which is located around 78.6% Fibonacci Level.

The pair remains bullish in the short prospect towards 1.5750 initially as long as 1.5625 remains defended by the bulls.

EUR/USD

The EUR/USD pair has broken a major resistance at 1.9290. Moreover, it should be noted that the weekly pivot point is calculated at 1.3171 and it is now approaching from it. Therefore, an upside movement will probably start at this area and recovery will begin again.

Thus, the market will indicate a bullish opportunity at the level of 1.3171, as well as it will be a good sign to buy at this spot with the first target at 1.3228 in order to form a double top and continue towards 1.3310.

But, please, check out the market volatility before investing, because the sight price may have already been reached and scenarios become invalidate. On other hand, if a break of 1.3150 occurs, then it will be a good location for placing stop loss at the price of 1.3100 as well as we should remind that the stop loss should never exceed your maximum exposure amounts.

USD/JPY

USD/JPY is trading in a range. USD/JPY is supported by Tokyo's win in race to host the 2020 Olympics; the yen trades amid improving risk appetite as the global growth outlook brightened after China's trade surplus widened more than expected to $28.6 billion in August (versus $20.4 billion forecast) from $17.8 billion in July, as exports increased 7.2% y/y (versus +6.0% forecast), while imports rose just 7.0% y/y (versus +11.7% forecast); demand from Japan importers.

But USD/JPY upside is limited by negative dollar sentiment (ICE spot dollar index last 82.27 versus 82.63 early Friday) after U.S. August non-farm payrolls increased less-than-expected by 169,000 (versus +175,000 forecast), while July job gains were revised down to just +104,000 from +162,000, raising uncertainty whether the Federal Reserve would start to scale down its $85-billion-a-month bond-buying program at its Sept.17-18 meeting; lower U.S. Treasury yields; Japan exporter sales. The yen crosses are vulnerable to 01.30 GMT China August CPI (expected to rise 2.6% y/y versus July's +2.7%) and PPI data.

Daily chart is mixed as five- & 15-day moving averages are advancing, MACD is bullish; but stochastics turned bearish and overbought.  Trading recommendations:   The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point.

As far as the price is above its pivot point, trading in a higher range is most favorable and a buy position is recommended above its pivot, with the first target at 100.2 and the second target at 100.45.

You should keep in view short positions below the pivot. Keep the first target at 99.00. The breach of this target will move the pair downwards further and one may expect the second target at 98.5. The pivot point stands at 99.3.     Resistance levels: R1 - 100.2 R2 - 100.45 R3 - 100.7 Support levels: S1 - 99.00   S2 - 98.5 S3 - 98.25 

Gold

Since our last analysis Gold has been trading sideways around the price of 1,386.00. We are still waiting for the bearish trend continuation. We are still likely to see its testing the weekly FE level of 161.8% (Weekly third target) at the price of 1,151.00. I saw supply bar on the volume above the average according to the daily chart.

That is the sign that the pair failed to test FE 100% at the price of 1,440.00 so we may mark point D like an end of the upward corrective phase. The current situation in (4H) is that we have got large volume in the previous downward move, which is a sign that we have got strong supply on the market. Since we are in the short-term downtrend in the daily chart, buying Gold looks very risky and I advise you to watch for selling opportunities after corrections.

Daily pivot Fibonacci points:  Resistance levels: R1: 1,392.52 R2: 1,394.52 R3: 1,397.77 Support levels: S1:  1,386.02 S2:  1,384.02 S3:  1,380.77 Trading recommendation: Operating with the metal, be careful with short-term buying and look for selling opportunities. My recommendation for a downward short-term target is 1,151.0 


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