Forex Trader's Weekly Update (July 19 2010 to
July 23 2010)
EUR/USD
EUR/USD's
rebound from 1.1875 extended further to as high as 1.3006
last week. The strong break of the falling trend line
resistance and sustained trading above 55 days EMA suggests
that fall from 1.5143 is finished at 1.1875. Initial bias
will remain on the upside this week and further rise should
be seen to 1.3105/3123 level next (38.2% retracement of
1.5143 to 1.1875 at 1.3123, 161.8% projection of 1.1875 to
1.2466 from 1.2149 at 1.3105). Though, as such rise from
1.1875 is viewed as a correction only, upside should be
limited by 1.3105/3123 level and bring reversal. On the
downside, below 1.2865 minor support will turn intraday bias
neutral and bring consolidations. But break of 1.2522
support is needed to indicate that EUR/USD has topped.
Otherwise, another rise remain in favor until meeting
mentioned target.
In the
bigger picture, while a medium term bottom is in place at
1.1875, there is now indicate of trend reversal yet. Rise
from 1.1875 is viewed as a correction, or part of
consolidation in the larger decline only. Whole fall from
1.6039 is still expected to continue to 1.1639 support and
below. However, considering bullish convergence condition in
weekly MACD, decisive break of mentioned 1.3105/3123 level
will argue that whole fall from 1.6039 might have finished
totally at 1.1875 and will turn focus to 55 weeks EMA (now
at 1.3475) for more evidence.
In the long
term picture, considering the long term up trend from 2000
low of 0.8223 to 2008 high of 1.6039, price actions from
1.6039 are viewed as a correction only. Hence, we'd expect
strong support between 61.8% retracement of 0.8223 to 1.6039
at 1.1209 and 1.1639 support to contain downside and bring
another long term up trend. However, note that sustained
break of 1.1209 key fibonacci level will dampen this view
and open up the case of a take on parity.
Pips Mover’s Weekly Pivot Point for this week:
1.2826
Historical Levels up to date: 1.4865, 1.4675,
1.4420, 1.4090, 1.3840, 1.3600
GBP/USD
GBP/USD
surged to as high as 1.5470 last week but formed a temporary
top there and retreated. Initial bias is neutral this week
and some consolidations would be seen first. However, note
that the strong break of the falling channel resistance
argue that whole decline from 1.7043 is finished at 1.4230
already. Hence, another rise will remain in favor as long as
1.4947 support holds. Break of 1.5521 resistance will
confirm this bullish case and target 61.8% retracement of
1.7043 to 1.4230 at 1.5968 next. However, failure below
1.5521, followed by break of 1.4947 will revive the case
that fall from 1.7043 is still in progress and will flip
intraday bias back to the downside for another low below
1.4230.
In the
bigger picture, the sustained trading above medium term
falling channel argues that whole fall from 1.7043 is
finished at 1.4230 already. Break of 1.5521 resistance will
confirm this bullish case. Also, this will indicate that
rise from 1.4230 is the likely the third leg of the whole
consolidation pattern from 2009 low of 1.3503. In such case,
stronger rally would be seen to 1.7043 resistance and
possibly above before long term down trend resumes. On the
downside, failure below 1.5521 resistance and break of
1.4947 support will revive that case that fall from 1.7043
is still in progress for 1.3503 low.
In the
longer term picture, the corrective nature of the
multi-decade advance from 1.0463 to 2.1161 as well as the
impulsive nature of the fall from there suggests that GBP/USD
is now in an early stage of a long term down trend. Another
low below 1.3503 is anticipated after rebound from 1.3503 is
confirmed to be completed.
Pips Mover’s Weekly Pivot Point for this week:
1.5250
Historical Levels up to date: 1.9445, 1.8490,
1.7520, 1.6570, 1.6255, 1.5675