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US Dollar Buying Non-Existent
By Jamie Saettele | Published  05/2/2006 | Currency | Unrated
US Dollar Buying Non-Existent

EUR/USD - EUR/USD fell yesterday after gaining for the past 6 days and 11 of the last 13.  The pair did trade to 1.2688 but ended up closing below the 50% fibo of 1.3666-1.1640 at 1.2652.  This fibo resistance combined with yesterdayâ,"s long upper wick on the daily candle at the upper Bollinger band (daily) looks to have established a short term top.  Support stems from the 23.6% fibo of 1.2068-1.2688 at 1.2543.  A break below targets the confluence of the 10 day SMA / 38.2% fibo at 1.2452/60.  Meanwhile, long term bullish signals continue to accumulate as the 100 day SMA now sits just above the 200 day SMA.  This is the first 100, 200 day positive cross since 10/27/2004.  Resistance remains the 50% fibo of the 1.3666-1.1640 bear wave at 1.2652 followed by yesterdayâ,"s high at 1.2688.

USD/JPY â,“ USD/JPY also looks poised for a contra move.  After trading below support posed by the 50% fibo of 104.18-121.38 at 112.75, the pair formed a hammer on the daily and closed above the mentioned support.  RSI on the daily is sloping up and just below the oversold barrier of 30, favoring yesterdayâ,"s low as a short term bottom.  Yesterdayâ,"s comment that â,"Positive divergence on the dealer charts along with the pair hugging the lower Bollinger band on the daily leaves possibility for a contra moveâ, did indeed proved accurate.  Resistance comes in at the 4/24 low of 114.23 with additional strength targeting the 38.2% fibo of 118.82-112.32 at 114.80.  The 50% fibo of the rally from 104.18 to 121.38 at 112.75 remains initial support with yesterdayâ,"s low at 112.33 as additional support.

GBP/USD â,“ Cable looks very similar to EUR/USD in that both formed bearish daily candles and both closed below their respective 50% fibos of the mostly 2005 dollar rally (GBP/USD was 1.9540-1.7046).  Ultimately, it was the 6/8/2005 high at 1.8401 that held up as resistance.  Negative divergence is still obvious with oscillators on the dealer chart.  This combined with the fibo resistance at 1.8294 hints at a corrective move.  Support is at the 5/1 low of 1.8203 with a break below exposing the 23.6% fibo of 1.7249-1.8413 at 1.8139.  A break above yesterdayâ,"s 1.8413 high could facilitate a move to the 9/5/05 high of 1.8501.

USD/CHF â,“ There was a theme regarding the majors yesterday.  They all made new recent highs against the dollar but at the end of the day had formed a reversal candlestick.  USD/CHF spent time below its 50% fibo of 1.1477-1.3284 at 1.2382 and closed above.  If the pair can distance itself from the lower Bollinger band, then a corrective move meets resistance at the 23.6% fibo of 1.3192-1.2285 at 1.2499 followed by the 1/13 low of 1.2553.  The mentioned fibo at 1.2382 is immediate support with yesterdayâ,"s low of 1.2285 as additional support.  A break below exposes the 9/5/05 low at 1.2236.

USD/CAD â,“ The Canadian Dollar continues to rally.  In fact, the pair broke the November 1991 low of 1.1189 on Friday and challenged the 138.2% fibo of 1.1297-1.1771 at 1.1116.  The 161.8% fibo of the 1.1297-1.1771 March bull wave comes in at  1.1005 and is support in the event that yesterdayâ,"s low at 1.1113 is broken .  A bounce higher off of the lower Bollinger band on the daily targets the 4/26 low at 1.1251 and 10 day SMA at 1.1274.

AUD/USD â,“ AUD/USD gained for a fifth consecutive day on Friday and rallied past the 61.8% fibo of .7987-.7017 at .7616 in trading yesterday before retreating back below the .7600 figure.  Negative divergence with RSI on the dealer chart favors shorts in the short term.  The proximity of the 61.8% fibo mentioned above at .7516 limits upside risk.  Support is designated from the 4/26 high at .7544 with a break below exposing the 23.6% fibo of .7013-.7618 / former resisting trendline from May 2005 at .7475.

NZD/USD â,“ The Kiwi extended gains from last Friday before reversing at the upper Bollinger band on the daily at .6425.  Dealer charts are bearish as they, like most oscillators on the majors, show negative divergence along with declining oscillator values.  The pair remains above the 50 day SMA after being rejected by the longer term moving averages twice early last week.  The confluence of the 50 day SMA / 23.6% fibo of .5991-.6425 is now support at .6320/23 with additional losses exposing the 38.2% fibo of .5991-.6425 at .6259.

Jamie Saettele is a Technical Currency Analyst for FXCM.