Dollar Approaching Resistance Zone; Risk Pairs Under Pressure

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

There are two rules for success: 1) Never tell everything you know. ~ Roger H. Lincoln

Good morning. Risk-off trade continues, therefore JPY is recovering across the board. Australian dollar drops as the RBA maintains interest rate at 4.25% as expected, but suggested that the door is open for further cuts. Let’s see what are some of today’s interesting charts

USD Index

The dollar index is little changed since yesterday, but it’s definitely worth keeping an eye on resistance around 80 which is the first level sellers are probably waiting to be triggered

USD Index Daily 3-6-2012

USD Index Daily 3-6-2012

EURUSD

yesterday’s recovery was modest and downside pressure is still high. I remain bearish for now, while it holds below 1.33, planning to sell either on rally to 1.3270/90 or on a breach of yesterday’s bottom at 1.3170/80

EURUSD Chart 4hrs 3-6-2012

EURUSD Chart 4hrs 3-6-2012

EURJPY

Consolidation is not over yet but it definitely looks heavy. Yesterday’s recovery was weak, suggesting that buyers are still cautious. Exiting the consolidation range to the downside seems more likely than resuming uptrend, as there’s more room for this correction

EURJPY chart 4hrs 3-6-2012

EURJPY chart 4hrs 3-6-2012

NZDUSD

The sell-off extended below .8250 bottom, providing a nice breakdown. Short-term studies are now bearish, hence holding short/ selling rallies might be good ideas

NZDUSD chart daily 3-6-2012

NZDUSD chart daily 3-6-2012

AUDUSD

Same story here but it seems to lag a bit behind NZDUSD, hence expecting a breakdown

AUDUSD Chart Daily 3-6-2012

AUDUSD Chart Daily 3-6-2012

AUDJPY

The strong uptrend was broken yesterday and I am expecting to see more downside action from here. However, I think that this decline is corrective and normal in such a strong uptrend.

AUDJPY Chart 4hrs 3-6-2012

AUDJPY Chart 4hrs 3-6-2012

Support formed by the MA lines was reliable since late December – early January, but it’s being tested again. A potential breach below 85.50/80 would be quite bearish, projecting the target to 82-83

AUDJPY Chart Daily 3-6-2012

AUDJPY Chart Daily 3-6-2012

AUDNZD

I’m bullish on AUDNZD since it breached the downward trendline connecting recent lower highs and I think there’s more upside to be seen. Anyway, today’s failed attempt to climb over 1.3050 is not an obvious sign of exhaustion, and that’s because of the daily ATR – as the test of 1.3050 occurred when AUDNZD was already out of the average daily range.

AUDNZD Chart Daily 3-6-2012

AUDNZD Chart Daily 3-6-2012

What worries me is the 4hrs chart, where there’s a nice reversal candle formed at recent top, suggesting that the decline may easily reach support at 1.2950/70. I remain bullish, though

AUDNZD Chart 4hrs 3-6-2012

AUDNZD Chart 4hrs 3-6-2012

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About abwehra group

The Art&Science of Trading Gold
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