Thursday, October 15, 2009
Posted by About this Blog at 11:24 PM
Strategy: Long at 89.00, Obj: 95.00, Stop: 88.70
Continues to show signs of stabilisation in the 88.00 region as evidenced by another lower shadow on the weekly candles last week. This bullish price action coming just ahead of last December’s 87.14 major Swing Low suggests that the 97.79 decline is about to undergo a good retracement and I look for 88.80 (minor 66% retrace/intra-week low) to hold for a push towards the 91.72/92.52 area (broken support/First Thrust High) then 95.00/97.79 out as losses are retraced. In the meantime, losing 88.80 would suggest scope for another crack at the lows, with key 87.14 then in the sights ahead of the 1995 all-time low of 79.75.
Strategy: Long at 1.5885, Obj: 1.6700, Stop: 1.5910
The recovery from 1.5706 is gathering pace as a bullish outside week pattern forms. This move adds further credence to the view that the 1.7043/1.5706 decline is a completed bull market correction (Elliott a/b/c) and I now look for weekly closes above the sloping H & S neckline at 1.6210 to see an attack on the 1.6741 Reaction High ahead of the 1.7043 Swing High as medium-term bulls return after the correction. Looking for 1.6000/1.6120 to hold for moves higher, with loss there to again threaten the 1.5706 low, below which would see further Head & Shoulders related weakness towards 1.5500 then 1.4985.
Strategy: Long at 1.4565, Obj: 1.5280, Stop: 1.4765
Breach of the 1.4844 Swing High offered final confirmation of the corrective low at 1.4480 setting the stage for the current advance which is closing in on the 1.5000 interim target. With the key technical factor being the completed double-bottom pattern (1.4719 December breakpoint) I look for 1.4844 to offer support for an attack on 1.5208/1.5283 where broken support and a measured move target intersect over coming weeks, with psychological 1.5500 sighted further out. To turn bearish I would need to see penetration of 1.4675, the low of this week’s breakout bar, and/or settlement back under the 1.4844 old Swing High. Focus would then turn to key support at 1.4480 then 1.4045 as the year’s gains are retraced.
Strategy: Short at 1.0373, Obj: 0.9900, Stop: 1.0275
Loss of the 1.0186 Swing Low follows on from rejection from just ahead of last week’s 1.0358 high, a move which signalled completed the correction to consecutive bearish Thrust weeks (close under previous week’s low) at 1.0452. With the key technical factor being the settlement below January’s 1.0371 major Swing low confirming a large Double Top pattern, the risk is for an acceleration lower for 1.0010 (July 2008 Reaction Low) ahead of the 0.9647 all-time low (March 2008) over coming weeks. Look for 1.0186 to cap for moves lower, with re-capture of 1.0352 (high of this week’s breakout bar) and/or settlement back above 1.0186 to offer scope for a return to 1.0452, the key to a more sustainable advance to 1.0883/1.1021.
Strategy: Buying at 144.00, Obj: 153.00, Stop: 141.00
Showing further signs of stabilization having based out at 139.68 two weeks ago as potentially bullish lower shadows on the weekly candles buoy. The short-term risk is for a re-test of the Double Top breakpoint at 146.75, settlement above which would signal a false downside break and a likely resumption of the 118.84 advance towards 153.24 (Reaction High) then the 163.09 Swing High as medium-term bulls return. Failure to overcome 146.75 then 150.37 (Bear Trap Trigger) would again risk further weakness to reaction lows at 131.44/135.71 en route to a 130.47 pattern objective as the recent decline extends.
Strategy: Long at 131.50, Obj: 138.00, Stop: 131.51
Seeing an extension of last week’s advance which signalled failure below the old Swing Low at 131.01 and bullish victory in the battle for the trendline coming in from the May and July reaction lows. With the 129.02 Swing Low seen as the end of the 138.72 decline which forms one of the bear legs of a bullish triangle pattern unfolding from the June Swing High at 139.21 I look for 131.01/131.82 to now hold for a return to 135.48 then the 138.00/139.22 area initially. Much below 131.01/82 would again threaten 129.02 then the 127.00 Swing Low, below which would complete a large top pattern calling for a return to 120.00 then the 112.12 major Swing Low.
Strategy: Selling at 0.9270, Obj: 0.8840, Stop: 0.9415
Rejection from 0.9411 and subsequent settlement back under the 0.9298 previous Swing high is seeing the formation of a potentially bearish reversal week pattern signalling over-extension of the 0.8455 upswing. The short-term risk is for GBP outperformance and I look for 0.9298 to act as resistance for a return to 0.9077 and possibly 0.8839 as recent gains are retraced over coming weeks. I would need to see settlement back above 0.9298 to revive the flagging uptrend, with sights then set on the 0.9498 March reaction high and possibly the January Swing High at 0.9803.
Labels: Daily FX Technical Report