Euro Starts the Week Lower, Testing Support Zone

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

It’s human nature to find patterns where there are none and to find skill where luck is a more likely – William Bernstein

Good morning. Euro opened lower this week, erasing most of Thursday’s gains, therefore dollar index found support at 80:

USD Index

USD Index Chart Daily 1-23-2012USD Index Chart Daily 1-23-2012

EURUSD

4hrs chart still looks bullish as current decline could be corrective. Next support backs the highlighted range at 1.2800, which is also the median retrace value of the entire up leg from 1.2625 to 1.2980

Euro Vs US Dollar Chart 4hrs 1-23-2012Euro Vs US Dollar Chart 4hrs 1-23-2012

According to COT data, bearish positions are printing fresh records each week:

EURUSD COT Daily 1-23-2012EURUSD COT Daily 1-23-2012

Silver

It was rather clear that a breakout was underway and its target at 32.50 was reached earlier than I’ve been expecting. What’s next? well, corrections are normal after such vertical moves, so keep an eye on next support range around 31.50, if a correction is due. I remain bullish on silver, expecting more upside action.

Silver Chart 4hrs 1-23-2012Silver Chart 4hrs 1-23-2012

EURAUD

It seems that EURAUD takes EURCHF’s place in the “one way only” category and every single correction, no matter how weak or strong, is just another opportunity to sell the cross. I was wrong to expect an extended correction these days and I guess we can’t talk about a decent correction as long as it holds below 1.2500 – and that’s not even an important resistance – but where else to expect a notable resistance in such a strong downtrend?

Euro Vs Australian Dollar Chart Daily 1-23-2012Euro Vs Australian Dollar Chart Daily 1-23-2012

AUDJPY

AUD follows stocks higher and it seems there’s more upside for AUDJPY in the coming days. Basically, it’s all good (if you’re bullish) while it holds above 80.

Australian Dollar Vs Japanese Yen Chart Daily 1-23-2012Australian Dollar Vs Japanese Yen Chart Daily 1-23-2012

GBPUSD

Cable is still in a bearish formation but it’s a good idea to keep an eye on two resistance levels (highlighted below). Potential buy setup would be likely on the breach of 1.5550-1.5600

British Pound Vs US Dollar Chart Daily 1-23-2012British Pound Vs US Dollar Chart Daily 1-23-2012


 

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About abwehra group

The Art&Science of Trading Gold
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