Article originally published on innerfx.com and republished here with permission
Some people will never learn anything because they understand everything too soon. ~ Alexander Pope
Good morning. It’s been a bad year for the euro and it ain’t over yet, as there are only two more days until 2012 and the euro has breached below $1.30 and reached 100.30 against the Japanese yen – the lowest level in 10 years. Today’s Initial Jobless Claims (FX Calendar) is the last important economic release of 2011 and tomorrow should be rather quiet due to lack of events and preparations for the New Year’s Eve. Let’s take a quick look at some of the last charts of 2011
Recent top near 81 is under pressure as last correction to mid 79 is over. Uptrend is intact & strong as EURUSD continues to slide, so best thing to do right now is to remain bullish on USD
Two days ago I was rather expecting the tight range to remain intact until January or perhaps see a correction towards 1.32-1.33 due to bears closing positions before year end, but it seems they don’t miss the selling opportunity of one last decline in 2011. Is the pair about to close below 1.300 tomorrow? – then selling in the 1.2980/00 region on weak rally is a plan to consider.
It seems that a reversal is in place as price climbs above recent lower highs and also formed a reversal candlestick around 1.0150. Therefore, buying on the (new) break of 1.0250/60 seems a good bet.
AUDNZD is still on my watch list – expecting a decent decline below 1.3050 soon. Current range looks rather corrective, probably forming a bear flag – suggesting a sell signal on the potential break of 1.3050/65
EURJPY draws a lot of attention these days as it just reached a 10-years low and there’s no sign of reversal yet. Perhaps the “big” pending buy orders are clustered below 100, so it should be interesting to see how this unfolds. However, I really don’t think it’s a good idea to buy it just because it seems cheap and because round numbers have some “magical” properties – it’s most likely just a matter of time until 100 will be quite far away to the North – just look at USDJPY which has been in a similar situation