AUD/USD - Reversing Lower From Triple Top Resistance
Last week we were looking at AUDUSD price action at 0.9200, suggesting this would be a level of psychological support. This assertion proved correct, as the pair showed a Hammer and bounced up from this point towards 0.9400.
We have now identified a downward-sloping resistance line connecting recent highs for a triple top. This looks to be a significant hurdle to further upside at the moment. We see AUDUSD retracing lower near 0.9200 again. That said, we will opt to take a short position. AUDUSD has been trading along an established bullish trend since August of last year. The yield differential is also resoundingly in favor of the Australian dollar. With those considerations in mind, we would rather wait for a long entry to present itself rather than trade counter-trend.
AUD/USD Strategy
We remain flat as we wait for an entry point to present itself.
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13729&stc=1&d=1208749700
Thank you, I appreciate it.
For EURUSD, if the current candle closes as-is, you could make the argument that its a Bearish Engulfing. However, note that the candle is still above the trend line we have been looking at, and the bearish candle's body does not engulf the wicks of the previous bullish one. I am not seeing a strong enough signal here to make a trade.
Hope that helps, and thanks again the compliment.
Ilya
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13830&stc=1&d=1208985523
Euro crumbles following 1.60 Test
Last week, we concluded that EURUSD was positioned well at 1.5800 for a test of the psychological level at 1.60. Our analysis proved correct, yielding 200 pips in profit. Euro bulls lost all momentum following the test at the all time high, with EURUSD dropping sharply lower to break through the upward sloping trend line we have been following since February.
We have changed our bias to bearish. The pair is currently showing a decisive Three Black Crows pattern to further validate the bearish view. The decline has stalled ahead of 1.5560, offering poor risk-reward parameters to enter short at the current price. Rather, we will wait for a retrace to just below 1.5800 amid past price congestion to sell the pair with an eye on downside to just above 1.5340.
EUR/USD Trading Strategy
1. Short EURUSD on retrace to 1.5800
2. Set stop-loss just above all-time high near 1.6022
3. Set target above swing low at 1.5340, risking 222 pips to gain 460.
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13972&stc=1&d=1209366183
Sterling Looks to Attempt a Another Rally
Last week, we did not see a clear signal on GBPUSD and opted to remain on the sidelines. We identified the pair as trading near an established pivot level at 1.9970. This had acted as support or resistance at various points in recent price action. GBPUSD has now cemented the level as significant resistance, oscillating between this and a downward sloping trend line (see chart below).
Currently, the GBPUSD has shown a Bullish Engulfing pattern. Adding further to the upside argument, we are seeing an upward-sloping support line intersecting with the previous resistance line, suggesting last week to have been a break-out from a triangle pattern. That said, current positioning does not offer attractive risk-reward parameters for an entry. We will look for a pull back to 1.9760, a multiple support/resistance level, to enter long. The most recent top at 1.9970 was largely symmetrical with the 04/04 Inverted Hammer top. We will look for the next bullish run to test resistance in a similarly symmetrical fashion with the top on 03/27.
GBP/USD Strategy
1. Long GBPUSD on a retrace near 1.9760
2. Set stop-loss below 1.9650 past recent wick lows
3. Set profit target near 2.0090, aiming for a symmetrical test of the 03/27 top, risking 110 pips to gain 330.
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13973&stc=1&d=1209366210
Yen continues to retreat, but event risk may derail rally
Last week, we advocated buying USDJPY on a retrace from 103.69 to 102.90, citing a confirmed Hammer candlestick. Our analysis proved correct, as the pair pulled back to the entry point and then proceeded to rally, closing at 104.41 for the week and yielding 151 pips in profit.
USDJPY is currently showing a bullish Three White Soldiers candlestick pattern, suggesting further upside. That said, we must be cognizant of the barrage of US data due this week. With USDJPY closely correlated to risk trends, the pair may see significant volatility in the coming days. We will revise our target to a more modest 105.19 and continue holding long. Conservative traders may opt to take profit here and wait for event risk to pass, or move their stop-loss to break-even at 102.90.
USD/JPY Strategy
1. Hold Long USDJPY from last week’s entry at 102.90.
2. Based on individual risk tolerance, either retain stop-loss at 101.40 or move to break-even at 102.90
3. Revise profit target to 105.19 near the 01/23 wick low.
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13974&stc=1&d=1209366249
USD/CAD - Long term trend line back in play
Last week, we opted to continue holding USDCAD short from below 1.0250 looking for a test of the range bottom. We moved our stop to break-even to contain the risk of an upside reversal. This proved wise, as USDCAD rallied to hit our stop-loss. We left the trade with no gains, but suffered no losses.
Recent price action has suggested an upward-sloping trend line from the 11/07/07 low. The pair now finds itself back at this support level having given back about half of last week’s gains. Our bias has shifted to bullish, but we will wait for confirmation with a close above support and a bullish reversal candle prior to entering a trade.
USD/CAD Strategy
1. Long USDCAD above trend line support on confirmation of a reversal.
2. Set stop-loss near 0.9983 below recent wick lows
3. Target a return to the range top at 1.0250, risking 97 pips to gain 170.
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13975&stc=1&d=1209366297
AUD/USD - Reversing Lower From 0.9500 Double Top
Last week we identified a downward-sloping resistance line connecting recent highs for a triple top. This looks to be a significant hurdle to further upside, and we opted to remain flat. AUDUSD broke past this point temporarily to hit the 0.9500 psychological resistance level, only to crash lower and stabilize above the 0.9300 level.
The pair is showing to consecutive Long Black Candles, a strong indication of a bearish bias. As we mentioned last week, we see AUDUSD retracing lower near 0.9200 again. Still, we will opt to take a short position. AUDUSD has been trading along an established bullish trend since August of last year. The yield differential is also resoundingly in favor of the Australian dollar. With those considerations in mind, we would rather wait for a long entry to present itself rather than trade counter-trend.
AUD/USD Strategy
We remain flat as we wait for an entry point to present itself.
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13976&stc=1&d=1209366334
NZD/USD - Trend Line Broken, Further Downside Looms
Last week, NZDUSD decisively broke through significant support marked by an upward-sloping trend line established in August of last year, hitting our stop loss above 0.7773 for a loss of 75 pips.
The pair is now showing two consecutive Long Black Candles, a strongly bearish signal. We will look to go short from here, targeting past price congestion near the 01/07 low of 0.7604.
NZD/USD Strategy
1. Short NZDUSD below 0.7850.
2. Set stop loss at 0.7950 above trend line support-turned resistance.
3. Set target near 0.7604, risking 100 pips to gain 246.
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=13977&stc=1&d=1209366371
EUR/USD
Triple Top Broken, Looking Up From Trend Line
Last week, the danger of a trend break emerged as we saw what could have been a Bearish Engulfing as the US Dollar strengthened following statements at that weekend’s G7 summit. We opted to remain on the sidelines and wait for the market to tell us how best to proceed.
The bearish reversal did not materialize. Rather, EURUSD broke through triple top resistance at 1.5900 with a Long White Candle. A lull in US and European data at last week’s end prompted what looked to be a technically driven relief retracement. This saw the pair decline to trend line support. From here, we continue to believe that EURUSD will test 1.6000. Current positioning at the trend line offers a good entry point.
EUR/USD Trading Strategy
1. Long EURUSD at trend line support above 1.5800
2. Set stop-loss below last week’s low at 1.5701
3. Set target at 1.6000
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-20-2008_EUR.JPG
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Pound Bulls Retake Initiative
Last week, we were waiting for a break of support at 1.9690 to enter a short position. We saw our entry conditions met 2 days into the trading week and entered the market. In the following days, GBPUSD surged unexpectedly higher to break trend line resistance with a Large White Candle. Our stop-loss at 1.9843 was triggered for a loss of 153 pips.
The pound is currently trading near an established pivot level 1.9970. This has acted as support or resistance at various points in recent price action. The pair’s behavior at this juncture will be important for determining directional bias going forward. Without a clear signal, we will remain on the sidelines in GBPUSD.
GBP/USD Strategy
We remain flat as we look for a confirmation of directional bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-20-2008_GBP.JPG
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Topside Break Out
Last week we saw a Hammer candle forming but chose to hold off and wait for confirmation until it closed. We noted that if the candle closes with the Hammer still showing, this will be a bullish reversal signal pointing to USDJPY upside momentum. We therefore suggested a conditional strategy, saying that if confirmation comes we will go long USDJPY above 100.70, revising our profit target lower to aim just below 104.00. Our analysis proved correct. The candle we were looking at was confirmed a Hammer (see below). This prompted us to buy USDJPY, entering at 101.08 with a stop at 99.97 and targeting 103.97. Our target price was reached, yielding 289 pips in profit.
Upside momentum has extended above the medium term resistance level at 102.90 (shown below). This suggests USDJPY will continue moving up from here. However, present positioning does not yield good risk-reward parameters. Should the pair retrace back to 102.90, we will enter long upon seeing a bullish reversal candlestick.
USD/JPY Strategy
1. Long USDJPY if it retraces to 102.90 and a confirms a reversal.
2. Set stop-loss near 101.40 amid recent price congestion.
3. Set profit target just below 106.00, risking 150 pips to gain about 300.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-20-2008_JPY.JPG
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CAD
Range Top Caps Upside, Trend Line Support Gives Way
Last week began with USDCAD back near the large range top at 1.0250. Though we saw no candlestick signals, our bias remained short given the pair’s previous behavior at this level. We opted to wait for confirmation of a close below resistance on today’s candle to go short again towards the bottom of the range.
Our confirmation came, and we shorted USDCAD following the next day’s bearish close. As we noted, we monitored closely as the pair tested the trend line at 1.0100. USDCAD did not stall here, breaking though with a Long Black Candle and prompting us to remain short. While there was a relief rally back to the tend line following the break, this support-turned-resistance was not penetrated and remains in effect. We will move our stop to break even (in our case we got in at 1.0185) and continue to hold short towards our target at 0.9835.
USD/CAD Strategy
1. Continue holding short USDCAD.
2. Move stop to break even (1.0185 is our case).
3. Target 0.9835 near the range bottom.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-20-2008_CAD.JPG
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Reversing Lower From Triple Top Resistance
Last week we were looking at AUDUSD price action at 0.9200, suggesting this would be a level of psychological support. This assertion proved correct, as the pair showed a Hammer and bounced up from this point towards 0.9400.
We have now identified a downward-sloping resistance line connecting recent highs for a triple top. This looks to be a significant hurdle to further upside at the moment. We see AUDUSD retracing lower near 0.9200 again. That said, we will opt to take a short position. AUDUSD has been trading along an established bullish trend since August of last year. The yield differential is also resoundingly in favor of the Australian dollar. With those considerations in mind, we would rather wait for a long entry to present itself rather than trade counter-trend.
AUD/USD Strategy
We remain flat as we wait for an entry point to present itself.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-20-2008_AUD.JPG
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Trend Line Holds, Eyeing Upside
Last week, NZDUSD found itself at the familiar upward-sloping trend line established in August of last year. We noted that if downside is contained here, we expect New Zealand Dollar bulls to retake momentum and drive the pair upward to the March high at 0.8067.
Last week saw price action remain above trend line support, with a double Hammer pattern suggesting a reversal upward. With little changed in the pair’s net positioning, we will hold to the same target and stop loss levels employed last week.
NZD/USD Strategy
1. Long NZDUSD above 0.7850 at the upward sloping trend line.
2. Set stop loss at 0.7773, just under the wick low of the most recent trend line test.
3. Set target at 0.8067 near the March top, risking 77 pips to gain 217.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-20-2008_NZD.JPG
For more resources on the NZDUSD, please visit the DailyFX New Zealand Dollar Currency Room.
NOTE: Unless otherwise specified, all trades are closed at the end of the trading week.
Many thanks, I appreciate the kind words.
With regard to the EURUSD, markets generally do not move in one direction so some kind of retracement after a major trend break is likely. Last week's breakout occurred during a general lull in significant economic data, while this week brings on a heavy dose of US releases with FOMC, then GDP, then NFP. I do not see any evidence at present to suggest a substantial positive shift in US underlying fundamentals since the last time these metrics printed. Meanwhile, the European calendar is fairly light. Barring any big upside surprises, the focus on dollar data should be enough to catalyze a pull-up before EURUSD continues to sell off.
As for the specific magnitude of the move, have a look at the attached chart. The pair has already retraced to the 23.6% Fib of the decline from 1.6018-1.5554. If we are expecting dollar-bearish news in the coming days, a further rise may be capped somewhere around the 38.2% or the 50% Fib levels below 1.58. The closer to 1.58, the better the risk-reward parameters of a short trade assuming a stop loss above the 1.6019 high. Given the magnitude of the data on offer, I think 150 pips above current levels is reasonably attainable.
As always, flexibility is key, so if we see a reversal at the 38.2% Fib then its time to get short.
IlyaAttached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14005&stc=1&d=1209418938
Hi Keith
Many thanks for the compliment. You're right, there is a shooting star on the monthly chart, and if you were picking your entry points from that alone I would say that this candlestick pattern requires confirmation.
That said, lets dig deeper. Given the kind of volatility we are seeing, trading from the monthly chart may lead to missing the boat on a good entry point. Looking on a daily chart, we see that things look very bearish with Three Black Crows right at the break of a major trend line. To confirm things with a weekly chart, the latest candles show a Bearish engulfing.
While I do think there will be some upward retracement at some point in the EURUSD, things look decidedly bearish as of now. The fundamentals of the situation also favor a bearish EURUSD bias, as the Fed was ahead of the pack in cutting rates and seems close to stopping while the ECB is running out of options and will need to cut.
Hope that helps
Ilya
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14164&stc=1&d=1209714820 http://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14165&stc=1&d=1209714826
Eurusd Topped Out !!
EURUSD has completed a 5 wave bullish sequence of an elliott wave pattern and now must continue lower to complete a three wave correction to complete the larger move. There is a Shooting Star left on the chart from last months price action after a huge run up, This is a good sign of a reversal. This also comes at the major top which I have been watching for.
To Bolster the Bearish Scenario even further, Under the Gann Timing method, market's top out around the 6th and 7th years of a decade, and a bull market lasts approximately 5 to 7 years. From The beginning of this multi year rally that began In October 2000 to present, This Market has Put in a Swing High about seven and a half years into the Bull Trend, Price is Due To Collapse.
My Bearish Bias For This Pair Just went through the roof !
A SHOOTING STAR CAN BE THE TOP OR CAN WARN THAT THE TOP IS NEAR.. BE CAREFUL NOW..
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14213&stc=1&d=1209767242
I would agree on a bearish bias for EURUSD, though we may see some retracement before downside momentum resumes. A snipped from the most recent Candlestick weekly:
"EURUSD now finds itself near 1.5400, a level that has acted as significant support/resistance level (see chart below). While this looks like a plausible place for a retracement, a lack of clear candlestick signals will keep us from risking a counter-trend trade. We will remain on the sidelines as future price action makes the picture clearer."
Ilya
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14263&stc=1&d=1209973613
路过:*18*:
感谢发帖
IlyaAttached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14287&stc=1&d=1210022371
Ilya
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14288&stc=1&d=1210023717
IlyaAttached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14289&stc=1&d=1210024334
Today's candle is certainly very bearish. There is a couple ways we can look at EURUSD from here, but it seems to me the pair is working through a price congestion area that we have seen before along the way to 1.60. In light of today's price action I am looking for a pullback to near 1.5550 or a break below 1.54 to get short.
Ilya
Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=14384&stc=1&d=1210198378
EUR/USD
Correction ahead
Last week, we saw the EURUSD decline stall at 1.5400. This had acted as a significant support/resistance level in the past and we suspected it would be a plausible place for a retracement upward. We got our confirmation with a Bullish Engulfing once the week’s first candle closed, prompting us to look for a short on a retracement to resistance.
The Euro closed the week showing a Morning Star pattern, pointing to the likelihood of upside momentum in the near term. The first clear layer of resistance is found just below 1.5560, a frequent price swing point. While this may well cap a relief rally in the EURUSD, the size of the Morning Star and the extended sell-off in the Euro with little pull-back threatens a deeper correction. We will monitor price action carefully as the pair trades near 1.5560 and go short on a confirmed reversal to the downside.
EUR/USD Trading Strategy
We remain flat, waiting for entry point. Updates will be posted throughout the week at the Candlestick forum.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-11-08_EUR.JPG
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Channel guiding prices lower
Last week, we saw an Inverted Hammer candlestick at trend line support suggesting a reversal higher. We approached cautiously, waiting for a next-day bullish candle to validate the upward bias before entering. However, GBPUSD saw limited upside before a wick lower hit out stop for a loss of 102 pips.
We took a step back to re-evaluate the pair and found GBPUSD to be trading along a downward sloping channel. Price action is now at the lower boundary of this formation, with indecision shown by the presence of back-to-back Hammer candles (one inverted and one otherwise). Our overall bias is now short, with the next being to identify an entry point. From a risk-reward perspective, the most advantageous scenario is to wait to for GBPUSD to oscillate higher for a short below 1.9890 near the channel top. On balance, we stand ready to short GBPUSD should the pair decisively break below the channel bottom and close there.
GBP/USD Strategy
1. Short GBPUSD below 1.9890.
2. Set stop-loss below 1.9980 above recent wick highs.
3. Set profit target near the channel bottom above 1.9470, risking 90 pips to gain 420.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-11-08_GBP.JPG
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Looking for direction after trend line break
Last week we opted to continue buying USDJPY along an upward-sloping trend line established in mid-March, with the most recent entry at 104.00. This time, we missed the mark and the pair broke lower on a retest of resistance at 105.65 to hit our stop near 102.90 for a loss of 110 pips.
The USDJPY decline has stalled near 102.60, a multiple support/resistance level. With the overall direction of the trend still looking bullish, we will look for clear confirmation of a bearish reversal before committing to a short. On balance, a strong bullish signal is also lacking at the moment. We remain on the sidelines for the time being as things clear up.
USD/JPY Strategy
We remain flat, waiting for confirmation. Updates will be posted throughout the week at the Candlestick forum.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-11-08_JPY.JPG
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CAD
Range contains price action
Last week, USDCAD was showing a large Doji candlestick following a Long White Candle. Considering the proximity of triple top resistance at 1.0250 above current price action, we thought there was a good chance the pair will retrace lower to trend line support before resuming upward momentum. The downside came indeed, triggering a long entry at trend line support near 1.0100. The second half of our preferred scenario did not materialize however as a stray wick low tripped the stop order for a loss of 69 pips.
With the upward trend line now effectively invalidated, we are left with the pair’s recent range to guide trading decisions. USDCAD has been oscillating between boundaries around 1.0240 and 1.0013 since March. Last week closed to show a Bearish Engulfing. While this is a bearish reversal signal, it can be argued that it is not entirely valid because the pair has been ranging rather than trending. As such, there is no trend to reverse. The proximity of current price action makes a long position most advantageous from a risk-reward perspective. As such, we will look to buy USDCAD above 1.0013 but keep our stop order close should the Engulfing bring with it a breakout to form a new bearish trend.
USD/CAD Strategy
1. Long USDCAD above the range bottom at 1.0013.
2. Set stop-loss above 0.9960 below recent wick lows
3. Set profit target at 1.0198 just below the range top, risking 53 pips to gain 185.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-11-08_CAD.JPG
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Down move offers long entry point
Without favorable risk-reward parameters, we continued to remain flat on AUDUSD last week. The pair went on to attempt a short-lived rally before being stopped short at the 0.9500 once again and easing lower.
We now see a Bearish Engulfing in place at the previous test of the 0.9500 triple top. This lends credence to a downside scenario. Substantial support has formed at the intersection of the upward-sloping trend line established in August of last year and a short-term level at 0.9285 that has contained downside tests since mid-April. We will look to go long here, betting with the substantial yield differential in favor of a return to Aussie strength.
AUD/USD Strategy
1. Long AUDUSD above 0.9285.
2. Set stop-loss just below 0.9200.
3. Set profit target near 0.9500, risking 85 pips to gain 215.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-11-08_AUD.JPG
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Decline accelerates
Last week we confirmed a Three Inside Up pattern, a strong bullish reversal signal. We retained our bearish bias, shorting the pair on a retrace toward 0.7950 to test trend line support-turned-resistance. This proved wise; the pair tumbled following just one wick high at the trend line to ram through our target at 0.7750 for 200 pips in profit.
Current positioning does not offer favorable risk reward to re-enter short, but we will continue to monitor the pair for any signs of pullback or stabilization to get back in. A heavy price congestion area lies close ahead above 0.7600, raising the chances that a support level will emerge in the coming days.
NZD/USD Strategy
We remain flat, waiting for entry. Updates will be posted throughout the week at the Candlestick forum.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-11-08_NZD.JPG
EUR/USD
Strategy: Bearish below 1.5645, Targeting 1.5229
Last week, we expected EURUSD to retrace to near 1.58 before continuing lower towards 1.5340. The bullish pull-up did not materialize as the pair collapsed to stabilize above 1.5415, the 38.2% Fibonacci retracement of the 02/07-04/22 rally. This appears to be a near-term bottom, with a relief rally taking the pair to test the 23.6% Fib at 1.5645. Our bias has been established as bearish following the upward-sloping trend break after the pair tested 1.60. We will look to short EURUSD below 1.5645 aiming to participate in a continuation of the downtrend to the 50% Fib at 1.5229.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Fibo_Weekly/05-05-08_EUR.jpg
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Strategy: Bullish against 1.9683, Targeting 1.9903
The Pound has been oscillating erratically in the past several weeks, testing through higher levels of Fibonacci resistance only to drop back to where it started. We have indentified an upward-sloping support line connecting recent lows. Price action is now wedged between this and the 23.6% Fibonacci retracement of the 03/14-04/15 down move. We see GBPUSD try for another bullish run past this level to test the 38.2% Fib at 1.9903. Should this level fail to be overcome yet again, bears may regain enough confidence to take the pair below trend line support.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Fibo_Weekly/05-05-08_GBP.jpg
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Strategy: Bullish against 104.00, Targeting 107.37
We had originally advocated being long USDJPY two weeks ago with the pair trading near 102.92, the 38.2% Fibonacci retracement of the 12/27/07-03/17 decline. Our target throughout this period has been a breach of the 105.00 level to hit the 50% Fib level, a task accomplished by last week’s close. The pair failed to hold above this level and has started to decline back to trend line support. We remain bullish and will be looking to re-enter long just above 104.00 targeting a re-test of the 50% Fib with a break higher taking USDJPY to the 61.8% level at 107.37.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Fibo_Weekly/05-05-08_JPY.jpg
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CHF
Strategy: Bullish against 1.0375, Targeting 1.0547
Last week’s impressive dollar rally took USDCHF to through resistance to hit our target at 1.0547, the 61.8% Fibonacci retracement of the 02/13-03/17 decline. Price action has stalled here, with a Star candlestick at resistance seeming to indicate the next move to be a retrace lower. We continue to be bullish on USDCHF, and will be looking for a pullback to the 50% Fib level at 1.0375 to enter long for a continuation of the rally. Should the pair break 1.0547 on the next attempt, we see price action extend above 1.07.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Fibo_Weekly/05-05-08_CHF.jpg
For more resources on the USDCHF, please visit the DailyFX Swiss Franc Currency Room.
USD/CAD
Strategy: Bullish against 1.0100, Targeting 1.0200
Canadian dollar price action validated last week’s analysis, rising from trend line support to rest above 1.02. That said, our profit target at 1.0250 proved too ambitious. USDCAD reached as high as 1.0236 and closed the week at 1.0188. The pair has now retraced all the way back to trend line support at 1.0100. That support is made stronger by the close proximity of the 61.8% Fibonacci retracement of the 01/22-02/28 decline at 1.0121. Without a daily close below trend line support, we continue to favor the bullish scenario and a return back above 1.02.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Fibo_Weekly/05-05-08_CAD.jpg
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Strategy: Bullish against 0.9287, Targeting 0.9500
Last week we were looking to go long AUDUSD following a pullback to the 61.8% Fibonacci retracement of the 02/28-03/20 decline at 0.9287, aiming for a return to test 0.9500. AUDUSD proceeded to do just that, hitting Fib support before moving higher with prices about 40 pips away from 0.9500 as of this report’s publication. A decisive break above this level would put AUDUSD at levels unseen since the early 1980s. We will continue to hold long as the trade plays out.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Fibo_Weekly/05-05-08_AUD.jpg
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Strategy: Bearish against 0.7940, Target TBA
Last week we advocated to short NZDUSD near 0.7850 targeting a decline to 0.7700. The pair came within 24 pips of our target and proceeded to reverse higher. This week, we look at a larger Fibonacci retracement spanning the 07/27/07-08/17/07 decline that saw NZDUSD fall nearly 1500 pips in less than a month. We see that the most recent downward break past trend line support was contained at the 76.4% Fibonacci retracement at 0.7757. The pair then moved higher and will likely continue to do so until a test of trend line support-turned-resistance near 0.7940. We will look to enter short from there as the bearish trend resumes.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Fibo_Weekly/05-05-08_NZD.jpg
EUR/USD
Ready to retrace losses?
Last week, Euro bulls lost momentum following a test above the psychologically significant 1.60 level, with EURUSD dropping sharply lower to break through the upward sloping trend line we have been following since February. We saw a decisive Three Black Crows pattern and changed our bias to bearish. To improve risk-reward parameters, we were looking for a retrace to 1.5800 to enter short. The reversal never came – EURUSD continued lower and our trade was not triggered.
EURUSD now finds itself near 1.5400, a level that has acted as significant support/resistance level (see chart below). While this looks like a plausible place for a retracement, a lack of clear candlestick signals will keep us from risking a counter-trend trade. We will remain on the sidelines as future price action makes the picture clearer.
EUR/USD Trading Strategy
We remain flat, waiting for confirmation. Updates will be posted throughout the week at the Candlestick forum.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-04-08_EUR.JPG
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Inching higher along trend line support
Last week, GBPUSD showed a Bullish Engulfing pattern at an upward-sloping support line prompting us to go long near 1.9760, a multiple support/resistance level. While price action has not broken the trend line we were looking at, a stray wick low tripped our stop order for a loss of 110 pips.
Looking at current price action, we see an Inverted Hammer candlestick suggesting a reversal higher. On balance, this is generally considered a weaker level signal and confirmation is required. Should tomorrow’s candle validate a bullish bias, we will look to go long above trend line support targeting recent highs. Importantly, it must be noted that our intended profit target and stop loss levels require an entry near trend line support at 1.9690 for risk-reward considerations.
GBP/USD Strategy
1. Long GBPUSD above 1.9690 on confirmation of a bullish reversal following the Inverted Hammer.
2. Set stop-loss near 1.9588 below recent wick lows.
3. Set profit target near 1.9954, risking 102 pips to gain 264.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-04-08_GBP.JPG
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Yen rally finds significant resistance
We originally advocated buying USDJPY two weeks ago on a retrace from 103.69 to 102.90, citing a confirmed Hammer candlestick. Last week, the pair rallied to close at 104.41 showing a Three White Soldiers candlestick formation, so we opted to continue holding long to a target of 105.19. This target was hit, yielding a total of 229 pips in profit.
Looking ahead, USDJPY price action has reached a significant level of resistance at 105.65. This marked a bottom that contained selling pressure for nearly a month between mid-January and mid-February. It is plausible to suspect a retracement here, with trend line support near 104.00 being the next buying opportunity. However, the lack of a specific candlestick signal will keep us on the sidelines for the moment until further confirmation is available.
USD/JPY Strategy
We remain flat, waiting for confirmation. Updates will be posted throughout the week at the Candlestick forum.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-04-08_JPY.JPG
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CAD
Eyeing return to trend line support
Last week, we suggested going long USDCAD upon a confirmed close above the trend line established at the 11/07/07 low. This proved wise as the pair proceeded to rally from our entry price at 1.0080 to close out the week at 1.0188, yielding 108 pips in profit.
Looking ahead, USDCAD is showing a large Doji candlestick following a Long White Candle. Considering the proximity of triple top resistance at 1.0250 above current price action, we reckon there is a good chance the pair will retrace lower to trend line support before resuming upward momentum, at which point we will re-enter long.
USD/CAD Strategy
1. Long USDCAD near trend line support at 1.0100.
2. Set stop-loss at 1.0031 below recent wick lows
3. Target a return to test 1.0250, risking 69 pips to gain 150.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-04-08_CAD.JPG
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
New support contains downside
Last week we opted to remain flat on AUDUSD. Having been rejected at the second test of 0.9500 and put in a double top, we expected the pair to decline and waited for a new buying opportunity at trend line support. Downside momentum did not extend as far as we had foreseen as AUDUSD cemented support above the 0.9285 level and proceeded to range above it for most of the week.
Erratic long candles in opposite directions make sense given last week’s US fundamental data overload, and we expect AUDUSD to begin taking up direction again shortly. That said, current price action finds itself near the midpoint between support and resistance, offering poor risk-reward parameters. Our bias remains bullish, and the next trade decision is a matter of selecting the best entry point to express that view.
AUD/USD Strategy
We remain flat, waiting for an entry point. Updates will be posted throughout the week at the Candlestick forum.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-04-08_AUD.JPG
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Trend Line Broken, Further Downside Looms
Last week, we decided to short NZDUSD below 0.7850 after the pair decisively broke through significant support marked by an upward-sloping trend line established in August of last year. Though the pair collapsed as low as 0.7724 throughout the week, our price target at 0.7604 proved too ambitious and was not reached. The week closed at 0.7811, yielding modest profits of 39 pips.
With price action nearly back to our original entry point, we continue to hold a bearish bias. That said, the current candlestick arrangement looks like a fledgling Three Inside Up pattern, a strong bullish reversal signal. If the current candle were to close above Thursday’s open, the pattern would be confirmed. If this is the case, NZDUSD will likely retrace toward 0.7950 to test trend line support-turned-resistance before the bearish trend resumes. Alternatively, the pair could resume dropping lower without retracement from current levels below 0.7850. The closing of the current candle will offer critical confirmation on the short-term outlook for NZDUSD.
NZD/USD Strategy
We remain flat, waiting for confirmation. Updates will be posted throughout the week at the Candlestick forum.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/special_report/Candlestick_Weekly/05-04-08_NZD.JPG
Trading the News: US Change in Non-Farm Payrolls
What’s Expected
Time of release:
05/02/2008 12:30 GMT, 08:30 EST
Primary Pair Impact :
EURUSD
Expected:
-78K
Previous:
-80K
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/other/TTN/ttn05.01.08-1.gif
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/other/TTN/ttn05.01.08-2.gif
How To Trade This Event Risk
Last month’s Non-Farm Payroll disappointment provided the momentum that would eventually send the EUR/USD to eventually break the 1.60 barrier. The economy has given back over 70,000 jobs the last three months and expectations are that another 78,000 was lost in April. Total cuts may have exceeded estimates again, with Citigroup and Merrill Lynch leading the financial sector in announcing 23,000 layoffs in April. Meanwhile,jobless claims jumped to 380,000 and continuing claims rose over 3 million this week, both four year highs. The FOMC cut rates another quarter point at its April 30th meeting, bringing the total since September to 325 points and leaving the benchmark rate at 2.00%. The subsequent statements didn’t contain the degree of hawkish slant the markets were expecting, nonetheless the consensus is the MPC will pause their current easing policy. The initial dollar bearish reaction has since quelled, as traders have digested the comments further. The most noteworthy element was the omission of the words “downside risks to growth remain”,which signals the Fed may sit back and evaluate the impact of their recent actions before considering further cuts. Inflation is becoming a concern for policy makers as record oil and food prices continue to squeeze consumers. However, with two months until the next meeting, two more significant months of job losses may force the central bank to cut again.
The EUR/USD has fallen below the 1.550 price level as traders chose to focus on the recentincrease in U.S. personal consumption rather than the dour employment data. The warning goes “don’t bet against the U.S. consumer for too long”, and with credit markets starting to stabilize and the Fed’s expected pause, traders are starting to heed it. Giving the recent dollar bullish trend, a small job loss may be sufficient to garner a long position, with any amount of job creation as a sure fire trigger.We would also look at the net job change absent the financial sector, which was directly impacted by the subprime crisis, for signs of job growth. Therefore, a loss of less than 25,000 jobs with job creation throughout the broader economy would be sufficient for a dollar bullish position, With a strong fundamental mix, we will look for red, five minute candle close for a short on two lots of EURUSD. Our initial stop will be set above the nearby swing high (or reasonable distance) and the first target will equal this risk. The second objective will be discretionary; and to protect against losses, we will move the second stop to break even when the first target is hit.
On the other hand, another month of over 70,00 jobs lost will diminish expectations of a Fed pause. We will look for a inline or greater contraction in employment for a EURUSD long and will follow the same strategy as a short, just in reverse.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/05/other/TTN/ttn05.01.08-3.gif
EUR/USD
Strategy: Bearish below 1.5800, Targeting 1.5343
As we expected, a light US calendar saw technical levels be the guiding principle behind EURUSD price action last week. Our target of 1.60 was hit mid-week, followed soon after by a sharp breakdown past trend line support. As we had speculated here on numerous occasions, the run to 1.60 owed more to momentum than underlying fundamental outlook. Having touched the psychological level being aimed at, Euro bulls gave up. The decline looks to be supported at 1.5560, the 23.6% Fibonacci retracement of the 02/08–03/17 rally. We see a retracement to just below 1.58 in the near term as current losses are consolidated, followed by a decline to the 38.2% retracement at 1.5343.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-28-08_EUR.jpg
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Strategy: Bullish against 1.9787, Targeting 2.0092
Last week we opted to remain flat on GBPUSD as the pair oscillated between the 23.6% and 50% Fibonacci retracements of the 03/14-04/15 decline in search of a direction. Following the most recent test of the downward sloping trend line resistance-turned-support established at the 03/14 high, GBPUSD has pushed higher to close above the 38.2% Fib level at 1.9903. The daily chart suggests symmetry between the most recent test of the 50% Fib and psychological resistance level at 2.00 and the one on 04/04. A continuation of this symmetry would take the current rally to the 61.8% Fib at 2.0092.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-28-08_GBP.jpg
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Strategy: Bullish against 103.70, Targeting 105.19
Last wee we advocated being long USDJPY above 102.90, the 38.2% Fibonacci retracement of the 12/27/07-03/17 decline. This proved wise, as the pair rallied to surpass the 104.00 level. We now notice an upward-sloping trend line connecting recent lows that has guided price action since the bottom above 95.00. This trend line would suggest a retracement to 103.70 followed by continued upside. As we have noted for several weeks now, we see USDJPY test the 50% Fibonacci retracement at 105.19.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-28-08_JPY.jpg
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CHF
Strategy: Bullish against 1.0201, Targeting 1.0547
Last week, USDCHF broke out higher of its range between the 23.6% and 38.2% Fibonacci retracements of the 02/14-03/17 decline. The move was catalyzed by the broad US dollar rally following the Euro’s rejection at 1.60. The rally has neatly topped out at the 50% Fibonacci retracement at 1.0375. This will likely prove to be a retracement point, seeing the pair ease back to find support at 1.0201 before resuming higher towards the 61.8% Fib at 1.0547.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-28-08_CHF.jpg
For more resources on the USDCHF, please visit the DailyFX Swiss Franc Currency Room.
USD/CAD
Strategy: Bullish against 1.0039, Targeting 1.0250
Last week we saw significant support established at the intersection of the 50% Fibonacci retracement of the 01/22-02/28 decline and an upward sloping trend line established in November of last year. We looked for the pair to rally, and so it has. USDCAD has rallied past the 61.8% Fib at 1.0120 and has stabilized there. Our view here remains unchanged from last week. We see the pair continue to rise for a test of the long-term range top at 1.0250.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-28-08_CAD.jpg
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Strategy: Bullish against 0.9287, Targeting 0.9500
Last week opened with AUDUSD breaking past 0.9400. We remain with our bullish bias, looking for the pair to reach 0.9500. Similarly to the EURUSD, this trade saw AUDUSD hit our target and break down soon after as 0.9500 became a double top. The down move was contained at 0.9287, the 61.8% Fibonacci retracement of the 02/28-03/20 decline. We maintain that as long as AUDUSD remains above trend line support, the up-trend is intact. That said, current positioning does not offer particularly favorable risk-reward parameters. The pair is currently stalled below psychological resistance at 0.9400. We will look for a retracement back to Fib support at 0.9287 for a long position targeting a return to test 0.9500.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-28-08_AUD.jpg
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Strategy: Bearish against 0.7850, Targeting 0.7700
Our analysis missed the mark on NZDUSD last week. We had been looking at a long-term supporting trend line established in August and reinforced by the 38.2% Fibonacci retracement of the 01/22-02/27 rally at 0.7896. NZDUSD price action negated this assessment as the pair decisively crashed through the trend line and the 50% Fib. This amounts to a trend change, with our bias shifting to bearish and eyeing a decline to the 61.8% Fib at 0.7700.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-28-08_NZD.jpg
EUR/USD
Euro crumbles following 1.60 Test
Last week, we concluded that EURUSD was positioned well at 1.5800 for a test of the psychological level at 1.60. Our analysis proved correct, yielding 200 pips in profit. Euro bulls lost all momentum following the test at the all time high, with EURUSD dropping sharply lower to break through the upward sloping trend line we have been following since February.
We have changed our bias to bearish. The pair is currently showing a decisive Three Black Crows pattern to further validate the bearish view. The decline has stalled ahead of 1.5560, offering poor risk-reward parameters to enter short at the current price. Rather, we will wait for a retrace to just below 1.5800 amid past price congestion to sell the pair with an eye on downside to just above 1.5340.
EUR/USD Trading Strategy
1. Short EURUSD on retrace to 1.5800
2. Set stop-loss just above all-time high near 1.6022
3. Set target above swing low at 1.5340, risking 222 pips to gain 460.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-27-08_EUR.JPG
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Sterling Looks to Attempt a Another Rally
Last week, we did not see a clear signal on GBPUSD and opted to remain on the sidelines. We identified the pair as trading near an established pivot level at 1.9970. This had acted as support or resistance at various points in recent price action. GBPUSD has now cemented the level as significant resistance, oscillating between this and a downward sloping trend line (see chart below).
Currently, the GBPUSD has shown a Bullish Engulfing pattern. Adding further to the upside argument, we are seeing an upward-sloping support line intersecting with the previous resistance line, suggesting last week to have been a break-out from a triangle pattern. That said, current positioning does not offer attractive risk-reward parameters for an entry. We will look for a pull back to 1.9760, a multiple support/resistance level, to enter long. The most recent top at 1.9970 was largely symmetrical with the 04/04 Inverted Hammer top. We will look for the next bullish run to test resistance in a similarly symmetrical fashion with the top on 03/27.
GBP/USD Strategy
1. Long GBPUSD on a retrace near 1.9760
2. Set stop-loss below 1.9650 past recent wick lows
3. Set profit target near 2.0090, aiming for a symmetrical test of the 03/27 top, risking 110 pips to gain 330.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-27-08_GBP.JPG
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Yen continues to retreat, but event threatens the rally
Last week, we advocated buying USDJPY on a retrace from 103.69 to 102.90, citing a confirmed Hammer candlestick. Our analysis proved correct, as the pair pulled back to the entry point and then proceeded to rally, closing at 104.41 for the week and yielding 151 pips in profit.
USDJPY is currently showing a bullish Three White Soldiers candlestick pattern, suggesting further upside. That said, we must be cognizant of the barrage of US data due this week. With USDJPY closely correlated to risk trends, the pair may see significant volatility in the coming days. We will revise our target to a more modest 105.19 and continue holding long. Conservative traders may opt to take profit here and wait for event risk to pass, or move their stop-loss to break-even at 102.90.
USD/JPY Strategy
1. Hold Long USDJPY from last week’s entry at 102.90.
2. Based on individual risk tolerance, either retain stop-loss at 101.40 or move to break-even at 102.90
3. Revise profit target to 105.19 near the 01/23 wick low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-27-08_JPY.JPG
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CAD
Long term trend line back in play
Last week, we opted to continue holding USDCAD short from below 1.0250 looking for a test of the range bottom. We moved our stop to break-even to contain the risk of an upside reversal. This proved wise, as USDCAD rallied to hit our stop-loss. We left the trade with no gains, but suffered no losses.
Recent price action has suggested an upward-sloping trend line from the 11/07/07 low. The pair now finds itself back at this support level having given back about half of last week’s gains. Our bias has shifted to bullish, but we will wait for confirmation with a close above support and a bullish reversal candle prior to entering a trade.
USD/CAD Strategy
1. Long USDCAD above trend line support on confirmation of a reversal.
2. Set stop-loss near 0.9983 below recent wick lows
3. Target a return to the range top at 1.0250, risking 97 pips to gain 170.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-27-08_CAD.JPG
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Reversing Lower From 0.9500 Double Top
Last week we identified a downward-sloping resistance line connecting recent highs for a triple top. This looks to be a significant hurdle to further upside, and we opted to remain flat. AUDUSD broke past this point temporarily to hit the 0.9500 psychological resistance level, only to crash lower and stabilize above the 0.9300 level.
The pair is showing to consecutive Long Black Candles, a strong indication of a bearish bias. As we mentioned last week, we see AUDUSD retracing lower near 0.9200 again. Still, we will opt to take a short position. AUDUSD has been trading along an established bullish trend since August of last year. The yield differential is also resoundingly in favor of the Australian dollar. With those considerations in mind, we would rather wait for a long entry to present itself rather than trade counter-trend.
AUD/USD Strategy
We remain flat as we wait for an entry point to present itself.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-27-08_AUD.JPG
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Trend Line Broken, Further Downside Looms
Last week, NZDUSD decisively broke through significant support marked by an upward-sloping trend line established in August of last year, hitting our stop loss above 0.7773 for a loss of 75 pips.
The pair is now showing two consecutive Long Black Candles, a strongly bearish signal. We will look to go short from here, targeting past price congestion near the 01/07 low of 0.7604.
NZD/USD Strategy
1. Short NZDUSD below 0.7850.
2. Set stop loss at 0.7950 above trend line support-turned resistance.
3. Set target near 0.7604, risking 100 pips to gain 246.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-27-08_NZD.JPG
The Standard Trade
When a trader goes about defining a money management strategy, they usually decide on what their risk/reward ratio will be, how wide to set stops, how many different trades can be floated at one time, and many otherwise important rules. However, one aspect seems to be overlooked and forever set in stone – each trade will be based on a single lot with one stop and one limit. There is an exception to this generality in those traders that pyramid in and out of positions; but this approach is very time consuming and can often lead to greater losses than taking a single lot alone. On the other hand, taking a trade based on two lots at the outset can offer a great deal more flexibility for a trader while at the same time keeping the downside well defined.
However, before delving into how a multiple lot trading system works, we should first establish a baseline trading strategy.We will use a simple and straightforward RSI breakout strategy. A trade is triggered when a 14-day RSI moves from an extreme region (below the standard 30 and below 70) and crosses back within these key levels towards the 50, mid-point. For an exit strategy we set both the profit target and stop equal (increasing the risk/reward merely decreased the ratio of winners to losers and in turn led to worse results). As an example, we have the GBPUSD November reversal seen in the chart below. After the RSI closes the day below the 70 overbought level after previously being outside the extreme boundary, we would look for a reversal and initiate a short trade at the open of the next bar with a wide, 300 points and an equivalent target. As we can see from the chart below, our target is met relatively quickly.http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Special/SPR04-23-1.gif
And, while this was a successful example, backtesting over 10-years of GBPUSD data shows that this profitable trade is in the minority. The best results come with a 100-point stop and target; and yet the statistics still show us that little more than 40 percent of our trades are profitable. What’s more, the median size of the winners will equal the median loser, so there is no money making edge to this trading strategy. Overall we would end with a net loss of $6,609.00 on an initial balance of $50,000 (which we can see in the trade performance below).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Special/SPR04-23-2.gif
Trading With Multiple Lots
Incorporating a two-lot system into a trading strategy actually requires few adjustments. With a single-lot system, a trader would take a position with one standard or mini lot and immediately set a stop loss and profit target. For our new system, a triggered entry would lead us to enter in the same way with two standard or mini lots. From there, we stagger the stop and target levels (setting both lots’ targets and stops equal would effectively just double our leverage and offer no real benefit). There are advantages to inputting different stop levels, but we will keep them equal to make things simple. At any rate, the true value in a two lot system comes from the ability to set two profit objectives. The first should be set relatively close and the second will naturally look for follow through with a wider objective.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Special/SPR04-23-3.gif
From here, we will apply the two-lot system with a modest 100-point stop and initial target and an aggressive second target of 300 points to see how this strategy performs. From the chart above, we can see that our short GBPUSD trade hits its first target very quickly. With a portion of our profit secured, we now have greater confidence in pursuing a more aggressive, second target.
The Benefits of Trading Multiple Lots
A first target that is set ‘nearby’ is essential to this strategy. It should make sense that the closer a target is to the entry price, the greater the probability that the objective will be hit. From a psychological standpoint, a trader will often times view this as a winning trade which leads to a better state of mind when considering subsequent positions. Practically, this first target can ‘pay for’ all or part of the trade. If the first target equals the total stop amount, the trade is essentially riskless when the first objective is met. Even if the first target is only a fraction of the total stop, the risk will be reduced significantly when the objective is met.
To better improve the risk/reward probabilities of this method of trading, we can trail the stop on the second lot. Therefore, when the first lot meets its first objective, the second lot’s stop is moved up to break even which locks in the gain and guarantees that profit.This one step can dramatically alter the performance of a strategy and boost a trader’s confidence. When the first target has been met, the worst that can happen from that point on is the second lot retraces to the breakeven point and the trade is closed out for the net profit on the first lot. For strategy performance this will naturally increase the ratio of winners (though it could also lower the average size of winners and increase the average size of losers depending on the size of the stops, first target and second target). Applying the two lot method, and the trailing stop for the second lot, to our RSI strategy; we can see a dramatic improvement in performance. Our percentage winners is boosted to 60 percent with a greater average winner to loser. The bottom line, this strategy turns a faulty trading strategy into to a profitable edge through a few money management adjustments.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Special/SPR04-23-4.gif
The greater potential from adjustable stop is seen in trader psychology. Emotions often get in the way of a successful trade whether a strategy is discretionary and placed by hand or mechanical with orders automated. Often times, when a trader creates a strategy, they will either place a target too far (in compensation of high risk or to satiate greed) or too close (in fear of a reversal). When using a two-lot system, the burden of turning a profit or avoiding risk is lessened. After the first target is reached, the trader can be more aggressive on the second objective and choose that level more objectively.
Singapore’s Dollar gets the ‘Green Light’ to Head Higher
Singapore's economy got a surprisingly unexpected rebound in the first quarter. Gross domestic product grew at an annualized pace of 16.9%.
Economists were expecting a gain of 10.2%. Wow! What a difference. That was nearly 65% more than economists expected.
Consumer prices (CPI) also rose 6.5% in February, which is "well above" the upper end of the range of where Singapore's monetary authority would like it to be. In fact, the central bank wants it to hover around 4.5% to 5.5% right now. So that's way above their comfort level, too.
So with GDP and CPI prices being so strong, the central bank said that "it would allow its currency to appreciate further."
Since the central bank reviews monetary policy twice a year, this approach should stick around for quite some time and should put some wind at the back of the Singapore dollar (SGD).
Instead of raising or cutting interest rates in Singapore, the bank chooses to control inflation by influencing the level of the currency. So if inflation is high, it allows the currency to appreciate.
Singapore’s dollar thrashes the U.S. dollar!http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Special/SPR04-22-1.gifThe news from the central bank is just crushing the USD/SGD pair as the Singapore dollar eats the U.S. dollar's lunch.
Since consumer prices are now climbing at the quickest pace in 26 years, you can bet they'd rather strengthen the currency quite a bit and somewhat quickly — such is the pressure of the enormous inflation staring them in the face.
Electronics exports are currently waning due to the global slowdown. But the gap is being made up by drug makers like Merck, which are producing more pharmaceuticals.
In addition, the manufacturing sector grew at 13.2% in the first quarter from a year earlier.
Look for the USD/SGD to have a long term downtrend as the Singapore dollar continues to strengthen against the U.S. dollar with the blessing of its own central bank.
This means that a U.S. rate cut at the end of the month won't help either. In fact, it will crush the USD/SGD pair even more. So, look for more losses in USD/SGD.
This should be a long-lasting trend that takes place over months to a year or two, possibly. However, being that the bank doesn't look at monetary policy but twice a year, you should have quite some time before it even considers a change of mind.
So in my opinion, this could very well be one of the hottest, fully tradable currencies of 2008-2009. It just broke through 30 year highs against the dollar (which means USD/SGD’s chart just hit a fresh 30 year low. Check out the chart below.
Singapore gives the “green light” to traders as the USD/SGD breaks 30 year lows!
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Special/SPR04-22-2.gif
EUR/USD
Strategy: Bullish above 1.5800, Targeting 1.6000
Last week’s bullish bias proved warranted – EURUSD broke through the triple top resistance level at 1.5900. A lull in US data late last week allowed for a brief respite in the rally as dollar bulls pushed price action back to trend line support. A close below did not materialize, with EURUSD right back above 1.5900 today as upward momentum resumes. This week is light on data from the US and the Euro Zone, so technical levels should prove to be the guiding principle behind price action. We continue to aim for a test of 1.60 before Euro traders stop to re-examine their bias once again.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-21-2008_EUR.jpg
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Strategy: Flat, waiting for confirmation
Last wee, we saw GBPUSD trading orderly lower along a downward-sloping resistance trend line. Mid-week, a sharp rally catalyzed the pair to break this level. The rally was contained at the 2.00 level, a level of significant psychological resistance made stronger by a 50% Fibonacci retracement of the 3/14-4/15 decline. Pound bears took price action back to the trend line, where resistance has now turned into support. Without a clear signal to guide our thinking, we will remain neutral on GBPUSD until further evidence emerges.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-21-2008_GBP.jpg
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Strategy: Bullish against 102.90, Targeting 105.19
USDJPY finally validated our multi-week bullish bias, rallying past resistance at 102.90, the 38.2% Fibonacci retracement of the 12/27/07-03/17 decline. Following the initial break, the pair has now retraced back to this Fib level as price action consolidates. As we noted last week, we continue to see USDJPY test the 50% Fibonacci retracement at 105.19.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-21-2008_JPY.jpg
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CHF
Strategy: Flat, waiting for entry point
Last week we saw USDCHF tread along the low of its current range between the 38.2% and 23.6% Fibonacci retracements of the 02/13-03/17 down move. The pair looked to be building momentum to break lower, causing us to favor a bearish bias. Similarly with the EURUSD, the lull in the US calendar late last week brought a dollar relief rally, taking USDCHF up for another test of range resistance. Price action has since eased back to the middle of the range. With the pair trading sideways, we will wait to commit to a directional bias. A move to the bottom of the range at 0.9986 would offer an opportunity to play oscillation within the range with a long position. On balance, such a trade would counter the established bearish trend, so traders would be wise to carefully assess their analysis of risk-reward parameters.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-21-2008_CHF.jpg
For more resources on the USDCHF, please visit the DailyFX Swiss Franc Currency Room.
USD/CAD
Strategy: Bullish against 1.0039, Targeting 1.0250
As we expected, last week saw USDCAD decline from the established long-term range top at 1.0250. Price action has since stalled at the intersection of an upward sloping trend line and the 50% Fibonacci retracement of the 01/22-02/28 down swing. Having already tested the next Fib level at 1.0117 (61.8% Fibonacci retracement) after the initial break lower, the pair looks poised to pick up steam for a more substantial upward push. Our bias on USDCAD has changed to bullish, eyeing a return to 1.0250.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-21-2008_CAD.jpg
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Strategy: Bullish against 0.9400, Targeting 0.9500
Last week’s analysis was validated as AUDUSD turn upward following a descent to the 50% Fibonacci retracement at 0.9220. The pair stalled just below 0.9400, showing the makings of a triple top. Price action dropped lower sharply, but downside momentum was contained by the 61.8% Fibonacci retracement at 0.9287. This week opened with AUDUSD breaking past 0.9400. We remain with our initial bias established at the long-term upward sloping trend line test on 04/01, looking for AUDUSD to reach 0.9500.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-21-2008_AUD.jpg
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Strategy: Bullish against 0.7900, Targeting 0.8100
NZDUSD has spent last week consolidating above trend line support above 0.7900, a level that also coincides with the 38.2% Fibonacci retracement of the 01/22-02/27 rally. Price action looks determined to inch higher, albeit slowly. Without a significant change in positioning since last week, we continue to hold to a bullish strategy, targeting a rise to 0.8100.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-21-2008_NZD.jpg
EUR/USD
Triple Top Contains Upside
At the beginning of last week we identified a Hammer at the trend line supporting EURUSD confirmed by a bullish candle. This led us to hold with our bullish bias, entering long at just above 1.5660 and targeting a test of the psychologically important 1.6000 mark. Though upside momentum materialized as we expected, our target was not reached. Price action stalled just below 1.5900, making a triple top. Still, with a close at 1.5826 the week yielded 166 pips in profit.
Looking ahead to this week, we see that the weekend’s G7 communiqué has buoyed the US dollar across all the majors. If the current EURUSD candle closes as-is, we will see a Bearish Engulfing and a break of the established bullish tend line. This would change our bias to favor the downside, and likely spark a major selloff in EURUSD. Should the candle close above the trend line, the bullish trend will remain intact and we will be looking for a buying opportunity. We are not able to make a reliable trading decision until today’s candle closes, and will wait for confirmation in tomorrow’s price action.
EUR/USD Trading Strategy
We remain flat as we wait for confirmation
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-13-08_EUR.JPG
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Positioning for further downside
Last week, we noted a Shooting Star bearish reversal signal at the down-sloping resistance trend line. This shifted our bias to bearish on GBPUSD, looking for downside to 1.9730. Our analysis proved correct – GBPUSD declined to hit the target at 1.9730. Though profit/loss depends on where each trader entered the position, we opened short as of the printing of last week’s article at 1.9927 to book 197 pips in profit.
For this week, the pair does not show a clear candlestick signal as yet. Price action is currently testing 1.9690, a level that has acted as resistance in February and turned into support when price action penetrated above it. Our overall bias remains bearish. Should the close of today’s candle confirm a support break, we will look for continued downside targeting 1.9387.
GBP/USD Strategy
1. Short GBPUSD on a break of support at 1.9690
2. Set stop-loss jus above the recent wick high at 1.9843.
3. Set profit target near 1.9387, risking about 153 pips to gain 303.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-13-08_GBP.JPG
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Finally ready for an upside push?
Last week opened with a candle that would become a Bullish Engulfing pattern by the close of Monday’s trading session. We noted that should this happen, we would buy USDJPY above 102.40 with a stop near 101.05, targeting 105.60. A spike wick low took out our stop, locking in loses of 138 pips. USDJPY would end the week just above support at 100.70, a level that acted as the range top for price action following the pair bouncing up from a multi-year low near 96.00.
The current candle looks to be forming an inverted Hammer. If the candle closes as-is, this will be a bullish reversal signal pointing to USDJPY upside momentum. If confirmed, we will go long USDJPY above 100.70, revising our profit target lower to aim just below 104.00.
USD/JPY Strategy
1. If the Inverted Hammer is confirmed, long USDJPY above 100.70
2. Set stop-loss near 99.97 below recent wick lows.
3. Set profit target just below 104.00, risking about 73 pips to gain 330.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-13-08_JPY.JPG
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CAD
Large Range Top in Play Again
We took a cautionary stance on USDCAD last week having booked profits on a short trade from downward bounce following a test of the large range top at 1.0250. We established conditions whereby if the pair closed below the upward-sloping trend line guiding price action mid-range, we would go short again. Our conditions were not met, and no trade was triggered.
Currently, price action has retraced from the trend line back to the range top at 1.0250. There are no candlestick signals here yet. Given the pair’s previous behavior at this level, our bias remains short. We will wait for confirmation of a close below resistance on today’s candle. Should this materialize, we will look to go short again towards the bottom of the range.
USD/CAD Strategy
1. Short USDCAD on a daily close below range top support at 1.0250.
2. Set stop-loss at 1.0384, above January’s false break wick high.
3. Monitor price action on a retrace to the trend line at 1.0100. Should trading stall here, take profit. On a break past the trend line, hold short to target 0.9835 near the range bottom.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-13-08_CAD.JPG
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Reversal Underway – Will Trend Line Offer Support Again?
Last week, favored a long position above 0.9200 targeting 0.9470. Though AUDUSD did not reach as high as we had hoped, the upside momentum we forecast materialized as expected. The week closed with the pair at 0.9288, booking just over 80 pips in profit.
Looking ahead, we see today’s price action forming a Large Black Candle ahead of the psychologically significant 0.9200 level. This is typically a strong bearish signal, though our reading of risk-reward does not offer a tempting-enough entry to go short. On a break of 0.9200 we will look for price action to take AUDUSD to the long-term supporting trend line just above 0.9100. We expect this support to hold and position Australian dollar bulls to regain momentum. Should we see a break at the trend line, AUDUSD may be in for substantial losses in the coming weeks.
AUD/USD Strategy
We remain flat as we wait to establish directional bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-13-08_AUD.JPG
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Testing Trend Line Support
Last week open did not yield sufficient evidence to initiate a position in NZDUSD. Mid-week, price action moved higher from trend line support as risk appetite returned to the market. Mid-week, price action formed a Hanging Man candlestick marking a reversal back to the downside.
This week, NZDUSD finds itself at the familiar upward-sloping trend line established in August of last year. Should downside be contained here, we expect New Zealand Dollar bulls to retake momentum and drive the pair upward to the March high at 0.8067. Alternatively, a break and close below the trend line would signal substantial NZDUSD losses in the coming weeks.
NZD/USD Strategy
1. Long NZDUSD on a confirmed reversal at 0.7850 along the upward sloping trend line.
2. Set stop loss at 0.7773, just under the wick low of the most recent trend line test.
3. Set target at 0.8067 near the March top, risking 77 pips to gain 217.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Candlestick_Weekly/04-13-08_NZD.JPG
EUR/USD
Strategy: Bullish above 1.5700, Targeting 1.6000
EURUSD began last week range-bound between the highest close of the previous bullish run near 1.5730 and the 1.5900 double top. Markets reacted strongly to the marginally better ISM manufacturing survey, giving the Greenback impetus to rally and take the pair down to the upward-sloping trend line established in early February. Last Friday’s NFP report crushed the dollar bulls’ wishful thinking, and further downside failed to materialize. Current price action is very reminiscent of February’s orderly ascent along the trend line, with consistent bullish days separated by shallow bearish Hammer candlesticks. We continue to hold the view that EURUSD is set to test 1.6000.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-07-08_eur.jpg
GBP/USD
Strategy: Bearish against 2.00, Targeting 1.9860
We remained flat on sterling last week as we looked for the pair to show a confirmation of directional bias. The current picture looks decidedly bearish, with a downward-sloping resistance trend line capping recent upside retracements. The strongest support looks to be the 61.8% Fibonacci retracement of the 02/20-03/13 rally at 1.9758. Price action has repeatedly bounced higher from this level, working through preceding Fib levels at 2.0002 and 1.9880, setting a lower high and with every try. In the near term, we expect the pair to test this level again with a potential break targeting as low as 1.9360.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-07-08_gbp.jpg
USD/JPY
Strategy: Bullish against 101.50, Targeting 105.15
Bucking negative sentiment towards the dollar following last Friday’s NFP, USDJPY broke out of the range between 100.70 and 98.50 to extend above multi-year support-turned resistance at 101.50. The level has only been tested twice prior to this year, once in 1999 and again in 2005. On both previous occasions, the test sparked a protracted multi-year rally. The level gave way March as USDJPY pushed to a low of 95.71. Last week’s trading established the pivotal level as support once again, with USDJPY consolidating below the 38.2% Fib of the 12/27/07-03/17 decline at 102.89. Our bias has shifted to bullish, seeing USDJPY break through current resistance to test the 50% Fib at 105.15.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-07-08_jpy.jpg
USD/CHF
Strategy: Bearish below 1.0100, Targeting 0.9840
The move below 0.9840 did not materialize last week. Rather, USDCHF continues to oscillate between the 38.2% Fibonacci retracement of the 02/14-03/17 decline at 1.0196 and the record-lowest close at 0.9840. With no substantial evidence to change our stance, we remain bearish looking for a return to the current range’s lows.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-07-08_chf.jpg
USD/CAD
Strategy: Bullish against 1.0120, Targeting 1.0250
Last week’s bearish bias proved correct, though the decline was not as deep as we anticipated. USDCAD was rejected once again from the top of the long-term 0.9793-1.0250 range (established in August of last year) and declined to the 50% Fibonacci retracement of the 01/22-02/28 down leg at 1.0041. We now notice an upward-sloping trend line connecting recent lows and adding further support near the 50% Fib level. USDCAD rallied from this area above the 61.8% retracement at 1.0120 to find itself in at the bottom of a familiar range, the very same one it had occupied since 03/20. From here, it seems trading will move up to once again find itself at the larger range’s upper boundary.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-07-08_cad.jpg
AUD/USD
Strategy: Bullish against 0.9287, Targeting 0.9500
Having bounced from support at the long-term trend line established on 08/17/07 as of the writing of last week’s report, AUDUSD returned to that support having failed to build momentum through Fibonacci resistance levels at 0.9157 and 0.9222 (38.2% and 50% of the 02/29-03/20 decline, respectively). On a second bounce from the trend line, AUDUSD overcame the aforementioned hurdles and is now testing the 61.8% Fib level at 0.9287. Should this resistance give way, we see the pair rallying back to test 0.9500. On balance, we may see yet another retracement to support before this Fib gives in. Regardless, our bias continues to favor the upside.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-07-08_aud.jpg
NZD/USD
Strategy: Bullish against 0.7902, Targeting 0.8100
Last week’s bearish bias proved short-lived. While NZDUSD declined past the 38.2% Fibonacci retracement of the 01/22-02/27 rally at 0.7902, the decline was halted at the intersection of the 50% Fib level at 0.7804 and the upward-sloping trend line established in September of last year. Spending a bit of time ranging between the nearest retracement levels, the pair mounted a top-side brake as USD optimism waned and risk appetite returned to the market. This places NZDUSD between the boundaries of last month’s range between 0.7902 and 0.8217. In the near term, we see the pair oscillating upwards to test the 0.8100 level.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/04/special_report/Fibo_Weekly/04-07-08_nzd.jpg