ANALYSIS

Market Technical Analysis - 09 October 2013

USD/CAD

Three months ago, a prominent bottom was established around 1.0260. This happened after the pair found strong bearish pressure around 1.0555-1.0600, this was followed by intensive bearish pressure that led to 1.0254. An important key level was located around 1.0505. This was the key level for the last week's movement as the reclosure below it enabled the pair to break down 1.0455 as well, where the lower limit of the depicted consolidation range was located. The nearest support zone is located around 1.0250. On September 19, the pair expressed a false breakdown reaching 1.0180, where obvious bullish rejection was expressed to get the pair back above 1.0250 again on Thursday, resulting in a bullish hammer Weekly candlestick. Since then, the pair has been consolidating within 70 pips range between 1.0260-1.0340, untill we had a bullish breakout at the daily closure yesterday. The current levels will probably push the pair again towards 1.0450 if the price zone of 1.0265-1.0250 remains defended by the bulls. This is enhanced by the inside weekly bar expressed two weeks ago, as long as its low at 1.0270 remains solid as a weekly low.  The price level around 1.0465 remains the nearest considerable resistance for the pair, a valid SELL entry is recommended at retesting with SL located above 1.0500.  

EUR/USD

Yesterday data on France and Germany was worse than forecasts. Trade Balance in France was -4.9 billion euro vs. estimates for -4.8 billion; Germany’s Factory Orders in August against estimates for a 1.2% growth declined 0.3%. Today at 14:00 UTC+4 data on Industrial Production in Germany in August is issued; forecast 1.1% vs. -1.7% in July. Now we may expect data weaker than estimates. At 22:00 UTC+4 FOMC meeting minutes are published today.   The first bearish target is the area 1.3537/42 with consolidation under which the second target opens 1.3495, support of trend line on the daily chart.  

AUD/USD

According to the previous events, the price has still been trapped between 0.9400 and 0.9420. Therefore, the first step is to wait for a period of tight sideways market before breakouts. Then, probably, the market is going to start showing bullish signs. In other words, it will be a good sign to buy above 0.9310 with the first target at 0.9390, and the price will climb towards 0.9435. However, if the pair fails to break 0.9460 (resistance 8 - 9 for October 3, 2013), the market will indicate a bearish opportunity below 0.9460, then the level will really act as strong resistance, it wil be a good sign to sell below 0.9460 with the first target at 0.94 and it will call for a downtrend in order to continue bearish movement towards 0.9355.   Intraday technical levels: Date and Time: 9/10/2013 09:44  Pair: AUD/USD  Projected High: 0.9582  Breakout (Buy Stop): 0.9527  Strong Resistance (Sell Limit): 0.9497  Current Pivot: 0.9434  Strong Support (Buy Limit): 0.9371  Breakout (Sell Stop): 0.9346  Projected Low: 0.9296 

USD/CHF

There has been a serious threat to the recent bearish bias in the chart, for the price is currently challenging the EMA 56, and would possibly close above it. Should this happen, it would signal the end of the bearish bias and the beginning of a bullish bias. The buying pressure in the market is already strong.

USD/JPY

On this currency instrument, the rally in the context of an uptrend is so strong to the extent of nearly overriding the extant bearish outlook. Further northward movement would definitely cause the bearish outlook to be totally rendered useless, for the RSI period 14 it has already crossed the level of 50 to the upside.

EUR/JPY

General overview for 09/10/2013 06:30 CET The first wave upwards has been done and corrective wave (ii) looks to be done as well, however it might be just the first leg of correction. Currently, the most important level to overcome for bulls to confirm the intraday bullish bias is Weekly Pivot area of orange rectangle at the 132.20 level. Only when the level is broken, the test of another level is possible at 132.67. On the other hand, the Key Level for bulls to keep the bullish momentum going is at 131.41 as the former low of the wave (ii). If this level is broken, then test of 131.13 is in view. Support/Resistance: 130.85 - 130.96 - GAP ZONE 131.13 - Swing Low 131.41 - Key Level for Bulls 132.14 - Weekly Pivot | Intraday Resistance | 50%Fibo | Golden Trend Line Resistance 132.67 - Techncial Resistance 132.98 - WS1 Trading recommendations: As long as the Key Level holds, bias is to the upside. Long positions from 131.60 area, as per Monday recommendation, should be still in play.

GBP/USD

GBPUSD bounced off the support level at 1.6046 and now this pair is trying to take a new path in this chart. The higher low pattern remains very much intact in this chart, however, it is likely to pair go up to resistance level of 1.6146 and if it breaks it, it is expected to rise to the level of 1.6235.

On the other hand, if the pair manages to break the support level at 1.6046, the bearish trend could be strengthened in this pair. The MACD indicator remains in negative territory. Now, this pair is likely to fall back to the support at the 1.6004 level. If the pair manages to break this support level, it would be expected to fall to the bullish trendline. On the other hand, if the pair manages to break the bearish trendline, it would be expected to rise to the level of 1.6164.

Gold

Since our last analysis, Gold has been trading sideways around the price of 1,311.38 on high volume, we are still likely to see it testing the weekly FE level of 161.8% (Weekly third target) at the price of 1,151.00. I saw lack of demand on volume just below the average, according to the daily chart, which means that gold may continue the bearish movement.

The current situation is that we have got buying climax, increasing volume on downward bars and the broken channel, which is the sign that Gold may continue the downward movement. 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:  1,327.58 R2:  1,330.88 R3:  1,336.23

Support levels:   S1:  1,316.88 S2:  1,313.58 S3:  1,308.23

Operating with metal, be careful with the short-term buying and look for selling opportunities. My recommendation for a downward short-term target is at 1,151.00