EUR: 1,30 Support Under Pressure in Risk-Off Trade Following Election Results

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

Many of life’s failures are people who did not realize how close they were to success when they gave up. ~ Thomas Edison

Good morning. All eyes are again on Greece, where political leaders are meeting again to form a new government. Current sell-off is also caused by the French election. With the euro down around $1.300 and struggling to hold, there’s a good chance that sellers are targeting more downside and potential pullbacks to the upside should provide more selling opportunities. Let’s see what are some of the interesting charts today

USD Index

Yesterday’s gap is not a clear breakout but filling the gap is normal, so the correction towards 79.50 should be over now. Next interim resistance is around 80 and a break above that level would result in EURUSD declining below 1.300

USD Index Daily 5-8-2012

USD Index Daily 5-8-2012

S&P500

The bottom formed by April’s lows is under pressure around 1360 as US markets decline after French and Greek elections stoke uncertainty in Europe. Bulls better wait on the sideline and only watch, because the decline doesn’t seem to be over yet

SPX Chart Daily 5-8-2012

SPX Chart Daily 5-8-2012

EURUSD

At first glance, yesterday’s candle is suggesting a reversal, but considering the political pressure which is the main market force these days, it’s probably better to just ignore the technical clues and look for more selling opportunities

EURUSD Chart Daily 5-8-2012

EURUSD Chart Daily 5-8-2012

AUDNZD

AUD is climbing against the NZD and just managed to overcome the barrier around 1.28. The breakout seems valid and yesterday’s short-lived pullback confirms that buyers are in control and there’s probably more upside to be seen – next important barrier being 1.300

AUDNZD chart Daily 5-8-2012

AUDNZD chart Daily 5-8-2012

AUDJPY

As usual – AUDJPY is one of the first pairs reacting to the decline of stock markets. Recent support around 82.60 is where sellers are probably waiting to renew their bets. I remain bearish for now, while it holds well below the interim top zone around 84.50

AUDJPY chart daily 5-8-2012

AUDJPY chart daily 5-8-2012

AUDUSD

Another AUD pair – same story: rallies likely to be sold, downtrend expected to remain intact

AUDUSD Chart Daily 5-8-2012

AUDUSD Chart Daily 5-8-2012

GBPUSD

Cable still holds onto gains remarkably well, considering all the pressure in other pairs. Support formed by former resistance line is intact and one of the possible trade setups I can think now – is to buy on the potential break above yesterday’s top/close at 1.6190 – just in case recovery resumes

GBPUSD Chart Daily 5-8-2012

GBPUSD Chart Daily 5-8-2012

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About abwehra group

The Art&Science of Trading Gold
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