Daily Technical Analysis by Kate Curtis from Trader's Way

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USD/JPY: Chance to Join the Rally? (May 16, 2013)

USD/JPY seems to have stalled right below the 103.00 major psychological resistance level as the pair retreated upon reaching a high of 102.78. There could be a chance to hop in the overall uptrend as the pair is currently finding support at the Fibonacci retracement levels.

Take note that the 50% Fibonacci retracement level is in line with the 102.00 major psychological support, which used to act as resistance in the past. The pair already seems to have bounced off this area and is showing upward momentum, although stochastic hasn’t reached the oversold region yet.



If there’s room for a larger correction, USD/JPY can still pull back down to the 61.8% Fib before resuming its uptrend. But if you think that the pair is headed north from here, you can just opt to set your stop below the lowest Fib and go long at market. Aiming for the recent highs or the 103.00 mark could yield a good reward-to-risk for the day.

The risks for the remaining sessions are the U.S. data releases, namely the CPI, building permits and housing starts, as well as the Philly Fed index. Note that U.S. data has been weak yesterday and has weighed on the U.S. dollar.

By Kate Curtis from Trader's Way

 

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GBP/USD Trend Line Break and Retest (May 17, 2013)

GBP/USD already broke below the rising trend line on the 4-hour time frame earlier this week, but it appears that the pair has found support around the 1.5200 major psychological level for now.

This was spurred by an upgrade in growth and inflation forecasts by the BOE, as well as stronger than expected jobs data from the United Kingdom. The economy’s jobless rate fell from 7.9% to 7.8% in April, as there were fewer individuals filing for unemployment claims in the month.



Weak U.S. data, namely inflation reports and manufacturing indices, also contributed to GBP/USD’s recent rally. However, the climb could last only until the Fibonacci retracement levels. Note that the 1.5400 major psychological resistance is between the 50% and 61.8% Fibonacci levels.

The broken trend line is also within this range, which suggests that it could act as strong resistance moving forward. Stochastic has yet to reach the overbought region so wait for a crossover and a move down before shorting.

By Kate Curtis from Trader's Way

 

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AUD/USD Short-Term Falling Trend Line (May 20, 2013)

Ever since AUD/USD breached the 1.0200 major psychological level, it has been on a very strong selloff, even breaking below parity. The trend remains very bearish for the pair and there could be shallow retracements for the week.

On the 1-hour time frame, there’s a falling trend line connecting the pair’s recent highs. Using the Fibonacci retracement tool shows that the 38.2% Fibonacci retracement level is close to the .9800 major psychological level. This level has acted as support last week and could act as resistance from now on.



Stochastic is still moving up, which suggests that the pair could still pull up to the 61.8% Fibonacci level, which is closer to the falling trend line. Set your stops above this area or the .9850 minor resistance if you’re shorting.

The only major release from Australia this week is the RBA monetary policy meeting minutes. The U.S. dollar could continue to draw support from talks that the Fed is already mapping out plans to exit its bond purchases.

By Kate Curtis from Trader's Way

 

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USD/CAD Short-Term Rising Trend Line (May 21, 2013)

The dollar seems to have retreated from its rallies at the start of this week, as traders may have booked profits off key inflection points for the major pairs. USD/CAD, in particular, has found resistance at the 1.0300 major psychological level.

From there, the pair has pulled back to the rising trend line on the 1-hour time frame. Stochastic, however, is making its way out of the oversold region. This suggests that the pair’s rallies could resume soon if sentiment for the dollar remains bullish.



The pair could test its former highs around the 1.0300 area and even make a strong break to the upside later on this week, depending on the outcome of the FOMC meeting minutes release and Fed head Bernanke’s testimony. Indications that the Fed is really considering reducing its bond purchases as early as June could trigger another strong dollar rally.

By Kate Curtis from Trader's Way

 

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EUR/USD Ready for a Major Correction? (May 22, 2013)

EUR/USD seems to be rebounding from its recent lows nicely as the pair is edged back abve the 1.2900 major psychological level. It’s just a few more pips away from the 38.2% Fibonacci retracement level, which could also act as resistance should the pair keep climbing in today’s trading sessions.

There are a bunch of market catalysts on tap, starting with the euro zone current account release and the German bond auction. Should these events turn out better than expected, EUR/USD could stay supported for the rest of the London session.



During the US session, the existing home sales report and FOMC meeting minutes will be printed. Around the same time, Fed Chairman Ben Bernanke is set to give a speech and possibly drop some hints on the Fed’s stimulus exit plan. In his previous speeches, Bernanke seems to be in no rush to withdraw quantitative easing and if he does highlight this bias in today’s testimony, the U.S. dollar could continue to sell off.

However, if the FOMC minutes show that majority of Fed officials support the tapering off of asset purchases as early as June, the dollar could regain ground.

Further dollar selling could take the pair up to the 1.3000 major psychological area, which is close to the 50% Fib and a former support level.

By Kate Curtis from Trader's Way

 

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GBP/USD Retracement Scenario (May 24, 2013)

The recent correction in GBP/USD is giving pound bears a chance to hop in the ongoing selloff at a better price. The pair rebounded off its recent lows and appears to be making a pullback to any of the Fibonacci retracement levels.

The falling trend line on the hourly time frame is still intact as the 61.8% Fibonacci retracement is in line with the former support level around 1.5175. Stochastic is pointing upwards, suggesting that the pair could head further north before resuming its drop.



If you’re planning on shorting this pair, set your stop above the trend line or the 1.5200 major psychological level. If the pair resumes its selloff, it could test its previous lows around the 1.5050 minor psychological support and possibly go for new lows closer to the 1.5000 handle.

By Kate Curtis from Trader's Way

 

[katetrades]

USD/JPY Long-Term Retracement (May 27, 2013)

After that strong rally that lasted for nearly a couple of months and more than a thousand pips, USD/JPY seems to be in the mood for a major correction.

On the 4-hour time frame, the pair is pulling back to the 99.50 to 100.00 area, which acted as resistance in the past. This is in line with the 61.8% to 50% Fibonacci retracement levels, which could act as support from now on.



Stochastic is already in the oversold region, suggesting that USD/JPY could rebound soon. The oscillator has also made a bullish divergence from the lows at the start of May.

The BOJ has made no changes to their current monetary policy scheme while the Fed has expressed intention to scale down their bond purchases within the year. This should keep USD/JPY supported in the near term.

By Kate Curtis from Trader's Way

 

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AUD/USD Testing .9600 Weekly Support (May 28, 2013)

AUD/USD is once more sitting at a key inflection point, which has been an established support level on longer-term time frames. There is no report scheduled for release from Australia today, as this pair could be driven by U.S. data and market sentiment.



Gold prices have been dropping lately, and this doesn’t bode well for the Australian dollar. In addition, the U.S. will be printing its CB consumer confidence figure and is expected to show a huge increase in consumer optimism. The figure is slated to rise from 68.1 to 70.7 this month, following better than expected consumer sentiment data from the University of Michigan.

This might be enough to trigger strong dollar buying that could push AUD/USD below the .9600 handle. The last time it broke below a key support level (1.0200), it plummeted by 600 pips.

By Kate Curtis from Trader's Way

 

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USD/CAD Resistance at Rising Channel (May 29, 2013)

USD/CAD’s uptrend is still very strong as the rising channel on its shorter-term time frame is still holding. The pair recently found support at the bottom, which is near 1.0350, and bounced right back up when the U.S. printed strong consumer confidence data yesterday.



The pair could be on its way to test the top of the rising channel, which is near the 1.0450 minor resistance level. Stochastic has already reached the overbought area, which means that sellers could take control of price action soon.

Take note that the BOC interest rate decision is scheduled today, and this event could provide enough volatility for USD/CAD. Downbeat remarks from BOC Governor Carney could trigger a quick Loonie selloff, but this might not last as he is set to step down from office soon.

By Kate Curtis from Trader's Way

 

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USD/CHF Head and Shoulders Pattern (May 30, 2013)

On its 4-hour time frame, USD/CHF seems to have formed a head and shoulders pattern, indicating a potential reversal from the pair’s rallies earlier this year.

The Swiss GDP is set for release and the economy is expected to have grown by 0.2% for the first quarter of the year. Later on, the U.S. will release its preliminary GDP report but is expected to make no changes to its 2.5% growth rate.



However, stronger than expected Swiss GDP and a downward revision in U.S. GDP could trigger a sharp breakdown from the neckline of the formation around .9600. On the other hand, weak Swiss GDP and an upward revision in U.S. GDP could set off a bounce back to the .9700 area.

By Kate Curtis from Trader's Way