SunbirdFX Daily Analysis 16/08/2011


SunbirdFX Daily Analysis 16.08.2011

Green opening for the US stock markets this week, as indices were up 2%. Many institutional, fund's managers and other major players see the recent crashing as an opportunity for increasing their positions in the stocks. That means that they might start loading the market with billions of dollars and support Wall Street. However, we will keep on warning every day from surprising news regarding the European debt problem that can trigger the panics at any moment.

Dow-Jones and S&P 500 closed their gaps from last week and therefore might correct down again. Nevertheless, if the positive momentum continues then the S&P will face resisting levels at 1220 & 1250 points.

Important news for today: German GDP; UK - CPI & inflation letter; US - building permits.

The central bank of Switzerland is considering pegging the CHF to the EUR in order to intimidate speculators. The Swiss currency, as mentioned many time before, is one of the investors' "safe shore" instrument, and the SNB wants to block the risings of the CHF. The rumors caused a slight correction in the Swiss currency, which corrected to the break-down area at 80.0.

Many sellers have waited there and resisted the USD. A hammer-doji candlestick with a long shadow was created yesterday, and that indicates for a possible reversal. The 20 EMA supports the CHF and a break-down of yesterday's low, around 0.7770-0.77780 might slide all the way down to the recent low at 0.77.

The Canadian dollar has been weakening against the USD since the beginning of the month, and it showed this weakness even before the crashes on Wall Street, which supported the USD. However, this pair got to a powerful resisting level at 1.0, where the bears waited to go back in. The CAD crossed under the important support of the 200 SMA, and if it continues below yesterday's bottom, it might slide to 0.965. The Stochastic indicator is supporting this estimation and suggesting that this pair might correct down.

On the weekly analysis, we estimated that the gold has got to a proper level for reversing, in technical analysis terms. Yesterday's candlestick supports that analysis by creating a green candlestick that got support on the same level of the previous candlestick. That is an accurate reversal pattern and if the Gold crosses above $1770/oz it will complete this pattern and possibly go back to $1815/oz. A break-down of the last two days' support at $1720/oz will be a negative sign for the gold.

Warning: Remember, that the prices of shares and other investments can fall fast and you may not get back the money you originally invested. The material here is for general information only and is not intended to be relied upon for individual investment decisions on real cash trading accounts. Take independent advice before making such decisions.