Euro Gains on Short-Covering and Risk-On Trade, Dollar Continues Slide

Article originally published on innerfx.com and republished here with permission

The man who has confidence in himself gains the confidence of others. ~ Hasidic Saying

Good morning. Dollar continues to fall as stocks recover, hence risk currencies, including EURUSD, are following stocks higher. Here are some of today’s interesting charts

USD Index

Support around 79.50 is in focus as dollar’s decline continues. That is probably a bottom bulls are keeping an eye on

USD Index Chart Daily 1-20-2012USD Index Chart Daily 1-20-2012

EURUSD

Daily studies are slightly bullish as the euro trades above recent lower high and breached above resistance layer formed between 1.28 and 1.29. Next resistance is seen around 1.3150. I remain bearish on EUR on a medium term basis but current recovery provides some good short-term and intraday buying opportunities.

Euro Vs US Dollar Chart Daily 1-20-2012Euro Vs US Dollar Chart Daily 1-20-2012

Silver

Resistance at 30.50 has been breached, so the potential breakout mentioned yesterday is valid. Anyway, gains are still moderate as silver keeps trading in a narrow range lately, but upside remains favoured. I remain bullish on silver, expecting it to test offers in the 32.50-33 region in a week or so.

Silver Chart 4hrs 1-20-2012Silver Chart 4hrs 1-20-2012

EURAUD

Recovery continues and resistance at 1.2500 is getting closer. Who is already holding long positions might consider buying more on the potential breach of 1.2500

Euro Vs Australian Dollar Chart Daily 1-20-2012Euro Vs Australian Dollar Chart Daily 1-20-2012

AUDJPY

Buying on the break of 80, as I wrote yesterday, wasn’t a bad plan at all. Perhaps a consolidation is due, but upside remains favoured so it’s probably a good idea to be one of the bulls while 79.50-80 holds.

Australian Dollar vs Japanese Yen Chart Daily 1-20-2012Australian Dollar vs Japanese Yen Chart Daily 1-20-2012

AUDNZD

As much as I wanted to see a break below 1.29 a few days ago, support holds and the cross keeps trading in range. A plan I’m considering right now is to sell on strength around 1.3050.

Australian Dollar Vs New Zealand Dollar Chart Daily 1-20-2012Australian Dollar Vs New Zealand Dollar Chart Daily 1-20-2012

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About abwehra group

The Art&Science of Trading Gold
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