Dollar Pulls Back After Strong Rally, Euro Recovers but Remains Under Pressure

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

Differences challenge assumptions. ~ Anne Wilson Schaef

Good morning folks. Not much is changed since yesterday across the charts, as EUR maintains a bid tone for now – but there’s a good change that current recovery is only a (much needed) correction. Hourly charts already show signs of exhaustion, but more notable resistance is a bit higher – at $1.2900 and $1.300.

USD Index

Still in correction zone – lowest level “allowed” before turning bearish (short-term basis) is 80.50. Below that, it won’t look like a correction anymore

USD Index Daily 5-22-2012

USD Index Daily 5-22-2012

S&P500

1300 provided support. After such a strong decline, a correction to 1340 is rather likely

SPX Chart Daily 5-22-2012

SPX Chart Daily 5-22-2012

EURUSD

Thinking of how many short bets are active, there comes a sudden urge to expect something – and that’s a short squeeze. I remain bearish on EURUSD on short-term basis as long as resistance lines at 1.29 and 1.30 are intact

EURUSD Chart 4hrs 5-22-2012

EURUSD Chart 4hrs 5-22-2012

USDCHF

Time to keep an eye on support zone between .9300 and .9350 as the dollar is pulling back after such a strong rally.

USDCHF Chart Daily 5-22-2012

USDCHF Chart Daily 5-22-2012

NZDUSD

Not trying to catch a falling knife in risk-off trade, but buying on the break of .7680/00 is tempting

NZDUSD Chart 4hrs 5-22-2012

NZDUSD Chart 4hrs 5-22-2012

USDCAD

There’s a strong bearish signal formed yesterday, so buyers better be careful as there’s some more room to the downside until support will be tested, eventually

USDCAD Chart Daily 5-22-2012

USDCAD Chart Daily 5-22-2012

AUDNZD

I remain bullish on AUDNZD, keeping an eye on 1.3050 while it’s not far from here. Support zone is intact and this is probably a correction

AUDNZD Chart Daily 5-22-2012

AUDNZD Chart Daily 5-22-2012

EURAUD

Support zone around former resistance is under high pressure today, but overall trend is still intact & strong (see 2nd chart below)

EURAUD Chart 4hrs 5-22-2012

EURAUD Chart 4hrs 5-22-2012

EURAUD Chart Daily 5-22-2012

EURAUD Chart Daily 5-22-2012

GBPUSD

Same as NZDUSD – it is rather tempting to look for a buying opportunity on rally above current intra-day top zone

GBPUSD Chart 4hrs 5-22-2012

GBPUSD Chart 4hrs 5-22-2012

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About abwehra group

The Art&Science of Trading Gold
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