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USD/JPY Daily Outlook 23.01.2008
USD/JPY continues to be relatively stable among the majors as it's staying inside tight range of 105.60 and 107.58. Outlook remains unchanged. With 107.58 resistance remains intact, fall from 114.77 should still be in progress and is still expected to extend further to next medium term target of 101.22/65 key support. However, with bullish convergence condition in 4 hours MACD and RSI as background, break of 107.58 will indicate that a short term bottom is in place and and bring stronger rebound towards 110.10 resistance.
In the bigger picture, whole medium term down trend from 124.13 remains in force towards key medium term support zone of 101.22/65 level. However, since the structure of the fall from 124.13 is not clearly impulsive yet, the fall from 124.13 might only be part of a wide range consolidation pattern only and 101.22/65 key support might hold. Much attention will be paid there on sign of reversal as USD/JPY approaches this key support zone.
On the upside, though, above 110.10 will indicate that fall from 114.77 has already completed. Stronger rally could the be seen retest the trend line resistance (now at 113.66). But still, a decisive break of trend line resistance is needed to be the first signal that whole down trend fro 124.13 has completed. Otherwise, medium term outlook will remain bearish.
EUR/JPY Daily Outlook
EUR/JPY's strong rebound from 152.11 reached as high as 157.13 but is so far still limited below 4 hours 55 EMA (now at 157.25) and 157.77 cluster resistance (38.2% retracement of 166.64 to 152.11 at 157.65). Short term outlook remains neutral for the moment. As long as 157.77 cluster resistance holds, decline from 166.64 is still expected to extend further to retest 149.27 support. Below 154.24 minor support will flip intraday bias back to the downside for 152.11 low and break will confirm fall from 166.64 has resumed. However, firm break of 157.77 will indicate that fall from 166.64 has likely completed and will put 158.67 support turned resistance into focus.
In the bigger picture, as discussed before, the corrective nature of the rise from 159.67 to 166.64 suggests that further downside should be seen, at least in near term. Also, note that, firstly, EUR/JPY is still struggling around long term channel support (now at 153.68). Secondly, firm break of 149.27 will also complete a medium term double top pattern (tops at 168.93 and 167.72). Decisive break of 149.72 support will indicate that whole long term up trend from 88.97 (98 low) has completed and bring much deeper medium term decline to 143.60 support first.
However, strong rebound above 149.27, followed by a break of 158.67 resistance will indicate firstly that fall from 166.64 has completed. Secondly, price actions from 168.92 is probably just forming a sideway consolidation pattern. In such case, the long term uptrend remains intact and retest of 168.93 should eventually be seen.
GBP/JPY Daily Outlook
GBP/JPY was supported by double channel support and rebounded strongly from 204.74. Nevertheless, upside is still limited below 212.44 resistance as well as 4 hours 55 EMA (now at 210.47). Short term outlook is neutral for the moment. As long as 212.44 resistance remains intact, recent fall from 241.35 is still expected to extend further to next downside target of 200 psychological support. Below 206.99 minor support will flip intraday bias back to the downside for 204.74 low and break will confirm recent decline has resumed.
On the upside, however, above 212.44 will indicate fall from 241.35 has possibly made a short term bottom, with bullish convergence conditions in 4 hours MACD and RSI. Further rebound should that be seen to retest short term falling channel resistance (now at 220.08).
In the bigger picture, an important medium term top is formed at 251.09 after completion of a medium term head and should top pattern (ls: 241.47, h: 251.09, rs: 241.35), with the medium term trend line support taken out too. In other words, the whole up trend from 148.19 should have ended at 251.09 already. Last week's close below 100% projection of 251.09 to 219.32 from 241.35 at 209.58 confirms underlying downside momentum is still strong and will encourage deeper decline to psychological support at 200, which overlaps with next medium term fibo support of 50% retracement of 148.19 (006) to 251.09 (07 high) at 199.64. The current fall will probably extend further to test long term rising trend line (129.32 to 148.19, now at 173.79). This view will remain unchanged as long as 221.25 support turned resistance holds.
GBP/USD Daily Outlook
Cable's strong rebound reached as high as 1.9645 but fails to sustain above 4 hours 55 EMA (now at 1.9602). Short term outlook is neutral for the moment. On the one hand, break of 1.9789 is needed to be the first signal that whole decline from 2.1161 has completed. Otherwise, further decline is still in favor after completing the current rebound. On the downside, below 1.9467 minor support will flip intraday bias back to the downside for a retest of 1.9337 low first and break will confirm that recent fall has resumed for next medium term support at 1.9183.
In the bigger picture, prior break of medium term rising channel and 2.0 psychological support at least indicate that rise from 1.8090 has already completed at 2.1161. With 55 weeks EMA taken out too, it's likely that the medium term up trend from 1.7047 has also completed. Sustained trading below mentioned 1.9554/1.9589 cluster support (04 high at 1.9554 and 38.2% retracement of 1.7047 to 2.1161 at 1.9589) confirms such case. Deeper medium term decline is expected towards 61.8% retracement at 1.8619, with 1.9813 medium term support as interim target.
On the upside, though, above 1.9789 resistance will argue that a short term low is in place and put focus back to short term falling channel resistance (now at 1.9948). Sustained break of this channel resistance will indicate that whole decline from 2.1161 has likely completed and stronger rise should then be seen towards 2.0099 resistance first.
USD/CAD's fall from 1.0378 continues as expected and reaches as low as 1.0143 so far. At this point, further pull back is still expected as long as 1.0256 resistance holds. However, downside should be contained well above 0.9971 resistance turned support and bring rally resumption. As discussed before, the current rise from 0.9756, which is treated as resumption of the whole rally from 0.9058 is still expected to extend to 61.8% projection of 0.9056 to 1.0248 from 0.9756 at 1.0493. Above 1.0256 will bring retest of 1.0378 high first.
In the bigger picture, a medium term bottom is in place at 0.9056 after USD/CAD just missed double projection target of 161.8% projection of 1.4006 to 1.1716 from 1.2737 at 0.9032 and 161.8% projection of 1.2737 to 1.0930 from 1.1874 at 0.8950. Nevertheless, the current rise from 0.9056 is still treated as correction to the long term down trend for the moment. Strong resistance should be seen as USD/CAD approaches key medium term resistance of 1.0930, with 100% projection of 0.9056 to 1.0248 from 0.9756 at 1.0948, 38.2% retracement of 1.4006 to 0.9056 at 1.0947 and 50% retracement of 1.2737 to 0.9056 at 1.0897. Attention will be paid to reversal signal as USD/CAD approaches this resistance zone. On the downside, break of 0.9971 to needed to be the first alert that rise from 0.9056 has completed. Otherwise, short term outlook remains bullish.
GBP/USD Daily Outlook
Cable's retreat from 1.9645 was contained at 1.9464 for the moment, suggesting that further consolidation could still be seen. Nevertheless, with 1.9789 resistance remains intact, outlook remains basically unchanged. That is fall from 2.1161 should still be in force. Below 1.9464 will flip intraday bias back to the downside for 1.9337 low and break will confirm recent fall has resumed for next medium term support at 1.9183.
However, note that downside momentum has been decreasing as seen in bullish convergence conditions in 4 hours MACD and RSI. Break of 1.9789 will indicate that a short term bottom is likely in place and will bring stronger rebound to short term falling channel resistance (now at 1.9931) first.
In the bigger picture, prior break of medium term rising channel and 2.0 psychological support at least indicate that rise from 1.8090 has already completed at 2.1161. With 55 weeks EMA taken out too, it's likely that the medium term up trend from 1.7047 has also completed. Sustained trading below mentioned 1.9554/1.9589 cluster support (04 high at 1.9554 and 38.2% retracement of 1.7047 to 2.1161 at 1.9589) confirms such case. Deeper medium term decline is expected towards 61.8% retracement at 1.8619, with 1.9813 medium term support as interim target.
On the upside, sustained break of the channel resistance will indicate that whole decline from 2.1161 has likely completed and stronger rise should then be seen towards 2.0099 resistance first, with prospect of further rise to 2.0577 resistance.
EUR/JPY Daily Outlook
EUR/JPY's strong rebound suggests that consolidation from 152.11 is still underway. Further choppy sideway trading could still be seen. But still, with 157.77 cluster resistance (38.2% retracement of 166.64 to 152.11 at 157.65) remains intact, outlook remains unchanged. At this, decline from 166.64 is still in force. Break of 152.11 low will indicate recent decline from 166.64 has resumed for next downside target of 149.27 low. However, break of 157.77 cluster resistance will be the first alert that fall from 166.64 has completed and will turn short term outlook neutral.
In the bigger picture, as discussed before, the corrective nature of the rise from 159.67 to 166.64 suggests that further downside should be seen, at least in near term. Also, note that, firstly, EUR/JPY is still struggling around long term channel support (now at 153.68). Secondly, firm break of 149.27 will also complete a medium term double top pattern (tops at 168.93 and 167.72). Decisive break of 149.72 support will indicate that whole long term up trend from 88.97 (98 low) has completed and bring much deeper medium term decline to 143.60 support first.
However, strong rebound above 149.27, followed by a break of 158.67 resistance will indicate firstly that fall from 166.64 has completed. Secondly, price actions from 168.92 is probably just forming a sideway consolidation pattern. In such case, the long term uptrend remains intact and retest of 168.93 should eventually be seen.
USD/JPY Daily Outlook
After diving to as low as 104.96, USD/JPY rebounded strongly. Downside momentum continues to diminish as seen in bullish convergence condition in 4 hours MACD and RSI. A short term bottom could be around the corner if not formed. But still, further decline is mildly in favor as long as 107.37 resistance holds. Break of 104.96 will indicate recent decline is still in force towards next short term downside target of 100% projection of 104.77 to 107.88 from 110.10 at 103.22. However, break of 107.37 will confirm that a short term bottom is in place and bring stronger rebound towards 110.10 resistance.
In the bigger picture, whole medium term down trend from 124.13 remains in force towards key medium term support zone of 101.22/65 level. However, since the structure of the fall from 124.13 is not clearly impulsive yet, the fall from 124.13 might only be part of a wide range consolidation pattern only and 101.22/65 key support might hold. Much attention will be paid there on sign of reversal as USD/JPY approaches this key support zone.
On the upside, though, above 110.10 will indicate that fall from 114.77 has already completed. Stronger rally could the be seen retest the trend line resistance (now at 113.56). But still, a decisive break of trend line resistance is needed to be the first signal that whole down trend fro 124.13 has completed. Otherwise, medium term outlook will remain bearish.
1/24/2008 - EUR/USD - After having hit an approximate double-top last week (nearing the record high in the currency pair), price on the EUR/USD daily chart, as shown, dropped back down in what looked like the beginnings of a bonafide reversal. But that was not to be. After hitting a key horizontal support/resistance line at around 1.4350 on Tuesday (represented by the lower yellow horizontal line), which coincided with a 38.2% Fibonacci retracement level (the low-to-high retracement span being measured from the swing low on 8/16/2007 to the all-time high reached on 11/23/2007) price bounced cleanly up off this level, negating the double-top reversal for the time being. In the current bullish run-up, which is supported by oscillators like the displayed Stochastics showing a clear emergence from oversold territory, the next obvious resistance level to the upside is in the region of the approximate double-top (around 1.4920-60). And of course, any break above this level with momentum would represent a significant potential breakout trading opportunity.
EUR-USD
1.4755. Uptrend is still intact in a triangle configuration. It should continue to rally to 1.4782 or 1.4896 if support around 1.4708 hold. After which a pullback to 1.4708 - 1.4673 zone is possible.
USD-CHF
1.0879. A drift to below 1.0838 or maximum 1.0798 is expected to precede a rally towards above 1.0908 or 1.0928. Fall below 1.0798 would be bearish.
USD-JPY
107.17. It looks set for gains to above 107.59. Supports at 106.56 and 106.77. A break of 106.34 will damage this bullish structure.
GBP-USD
1.9765. Market looks set for gains towards 1.9863 or above in extension. Dips should find support at 1.9682 - 1.9633 zone.
EUR-CHF
1.6052. It should be subject to more sell off towards 1.5941 or 1.5831. Corrective upward swings should face resistance around 1.6206 area. A break of 1.6141 is bullish.
EUR-JPY
158.12. Market looks set for gains towards 159.28 or above in extension. Dips should find support at 157.07 - 156.49 zone.
EUR-GBP
0.7465. Our preferred outlook is for a drift down to 0.7453 or below 0.7441. Resistances are at 0.7465 and 0.7472. A rise above 0.7484 would delay but not abort this expected fall.
AUD-USD
0.8821. A corrective/consolidation activity between 0.8735 and 0.8950 is likely for a while.
USD-CAD
1.0038. Market should not go lower than 0.9925. After this move down it should go up to 1.0026 - 1.0103 area.