DailyFX Analyst Picks - Ilya Spivak

Remain Long USDCAD

Unknown Field-Author — Fri, 20 Nov 2009 16:03:07 GMT

Last week, I entered long USDCAD as prices put in a formidable Bullish Engulfing pattern on a re-test of broken resistance at the top of a falling channel that had guided prices lower since the swing high in March. The pair has indeed moved higher and I will remain long, initially targeting the 11/02 wick high at 1.0875. A stop-loss will be activated on a daily close below 1.0415.

Short GBPUSD (pending)

Unknown Field-Author — Thu, 19 Nov 2009 11:18:59 GMT

GBPUSD looks set to turn lower: prices have put in an Evening Doji Star bearish reversal candlestick formation bolstered by negative divergence on the RSI oscillator and are now on pace to close below the last layer of support at the bottom of a rising channel that has guided prices since the swing low in mid-October. A daily close below 1.67 would serve as confirmation to enter short, targeting the 1.6130-1.6250 congestion region.

USDJPY (Pending)

Unknown Field-Author — Wed, 18 Nov 2009 23:12:43 GMT

After a shallow rebound from support at the bottom of a falling channel that has guided prices since April, USDJPY has put in a large Bearish Engulfing candlestick pattern, hinting that bearish momentum was ready to resume. The bears face a formidable hurdle, however, with major support lining up in the 87.09-88.23 area. I will observe from the sidelines for now as prices resolve this pivotal juncture. A break lower would open the door for rapid bearish acceleration below the 80.00 mark.

Long USDCAD

Unknown Field-Author — Fri, 13 Nov 2009 10:26:50 GMT

Last week, USDCAD broke above resistance at the top of a falling channel that had guided prices lower since the swing high in March. The pair has now retraced downward to re-test this boundary and put in a formidable Bullish Engulfing pattern, signaling a rally was ready to resume. I will enter long from here, initially targeting the 11/02 wick high at 1.0875. A stop-loss will be activated on a daily close below 1.0415.

GBPUSD Short (pending)

Unknown Field-Author — Thu, 12 Nov 2009 12:28:41 GMT

GBPUSD has been confined to a well-defined rising channel since the latest swing low in mid-October. Prices are now squarely above channel support (1.6494) showing clear negative RSI divergence. I will look for a daily close below the channel bottom to enter short, initially targeting 1.6070. A likely stop-loss could be a daily close above 1.6848, the 11/9 wick high, but the final decision on where risk-reward would require the cutoff to be established depends on how the realization of the sell signal will play out (i.e. how far down the current candle will go if it closes below channel support, skewing risk-reward incentives).

Short USDJPY (pending)

Unknown Field-Author — Wed, 11 Nov 2009 13:20:08 GMT

After a shallow rebound from the double bottom in the 87.09-88.23 region, USDJPY has put in a large Bearish Engulfing candlestick pattern on the weekly chart. I will look for this to materialize into a break below the previously mentioned double bottom, targeting below 80.00.

Short EURUSD (pending)

Unknown Field-Author — Tue, 10 Nov 2009 12:35:38 GMT

A bearish reversal continues to develop, with the EURUSD weekly chart showing prices oscillating in a Rising Wedge formation with negative RSI divergence. A broad upswing in the Dollar also seems reasonable given its inverse correlation with equities and the likelihood that the latter is set to correct lower amid increasingly stretched valuations. A daily close below 1.4780 or so would confirm reversal.

Long USDCAD (pending)

Unknown Field-Author — Mon, 09 Nov 2009 13:51:54 GMT

USDCAD has retraced to key horizontal support at 1.0590 after breaking out of a falling channel that had contained prices since the highs in March. I will look for signs of a bullish reversal in the candlestick patterns at this juncture to enter long.

Long USDCAD (pending)

Unknown Field-Author — Fri, 06 Nov 2009 12:43:55 GMT

Last week, USDCAD conclusively broke out past resistance at the upper boundary of a falling channel that had guided prices lower since early March. Prices have now pulled back to re-test this juncture and are starting to show signs of returning bullish momentum above horizontal support at 1.0630. I will look for a strong bullish close on the current session to follow the back-to-back Star candlesticks now sitting at support as confirmation to enter long at the beginning of next week.

GBPUSD Short (pending)

Unknown Field-Author — Thu, 05 Nov 2009 13:13:48 GMT

Looking at underlying fundamentals, the British Pound now stands at a distict disadvantage against the US Dollar with the BOE heading deeper into quantitative easing even as the Fed ends purchases of Tresuries and scales back its expected buying of agency debt and mortgage-backed securities. Put simply, the Fed is slowly reversing its very loose monetary stance while the BOE heading in the opposite direction. This bodes ill for GBPUSD, particularly considering that the pair is now left without support from the equities rally as the correlation to risk trends has quickly dwindled. I will look for signs of a bearish reversal ahead of 1.67 to establish short.

Long USDJPY (pending)

Unknown Field-Author — Wed, 04 Nov 2009 12:06:08 GMT

The daily USDJPY chart is showing the makings of a Head and Shoulders bottom with a neckline at 92.15. I will look to enter long on a daily close, initially targeting 94.00.

Short EURUSD below 1.4733

Unknown Field-Author — Tue, 03 Nov 2009 15:28:02 GMT

A top in EURUSD is on the verge of seeing confirmation: recent highs above 1.50 are divergent with momentum indicators, the weekly chart is showing a bearish engulfing, and the final piece of the puzzle is nearly in place with a break below rising trend line support established from the March lows (now at 1.4733). I will look for a daily close above this level and enter short initially targeting near 1.4460.

Short EURUSD (pending)

Unknown Field-Author — Mon, 02 Nov 2009 12:49:12 GMT

A pivotal moment for EURUSD is at hand, with the weekly chart now showing a clear Bearish Engulfing pattern and pointing to a sizable down move ahead. Final confirmation is required on a daily close below rising trend line support established from the lows in March (now at 1.4720). The subsequent push lower initially targets 1.4450.

Long USDCAD (pending)

Unknown Field-Author — Fri, 30 Oct 2009 12:51:28 GMT

USDCAD is showing the makings of a bullish reversal having followed up a Hammer candlestick at the bottom of the 1.0334-1.0682 congestion region with a push to challenge major resistance at the upper boundary of the falling channel that has guided prices lower since the 2009 high (now at 1.0643). Positive RSI divergence bolsters the bullish scenario, but Iwill opt to wait for confirmation on a close above resistance to enter long.

Short GBPUSD (pending)

Unknown Field-Author — Thu, 29 Oct 2009 12:26:05 GMT

GBPUSD has bounced lower from 1.67 to re-test resistance-turned-support at the top of a falling channel that had contained prices since the swing high in August. After three days of stalling, prices now look positioned to advance and another challenge of 1.67 may be ahead. My bias generally favors USD against most major currencies as a downward correction in risky assets boosts the safety-correlated currency, so I will be looking for selling opportunities ahead as GBPUSD advances.

Short USDJPY (pending)

Unknown Field-Author — Wed, 28 Oct 2009 15:35:43 GMT

Over two weeks ago, I suggested a bullish correction was on the way to test 92.09 seeing positive RSI divergence ahead of the major double bottom at 87.09. Last week, prices broke resistance at the top of a channel established from the August swing high and now the move to 92.00 has been complete with the bears now poised to get back into the driver's set. I will look for a daily close below 91.15 to enter short, targeting 88.23

Short EURUSD (pending)

Unknown Field-Author — Tue, 27 Oct 2009 09:52:05 GMT

Weekly charts see EURUSD setting up a large Rising Wedge bearish reversal formation all the way from the major bottom in early March. Last week, prices tested resistance at the Wedge top but failed to break higher and are now reversing course. Confirmation to enter short would be seen on a weekly close below the Wedge bottom, now at 1.4706, which would initially open the door for a drop to1.4450.

Long USDCAD (pending)

Unknown Field-Author — Mon, 26 Oct 2009 14:50:32 GMT

Looking at weekly charts, USDCAD has put in a Hammer followed confirmation on the bullish close of last week's candle squarely at the bottom of the 1.0334-1.0682 resistance-turned-support region. I will look for final confimation on a break above the upper boundary of a falling channel that has led the pair lower since the 2009 high (now at 1.0643) to enter long.

Flat AUD, NZD

Unknown Field-Author — Fri, 23 Oct 2009 14:48:18 GMT

The breakneck Australian and New Zealand Dollar rally continues to push higher as risk appetite remains well-supported. Even if global economic fundamentals catch up with the recent gains in stocks and commodities, it seems very dangerous to chase this up move having seen no meaningful correction in months. To that effect, I will remain flat for the time being.

GBPUSD Short (Pending)

Unknown Field-Author — Thu, 22 Oct 2009 13:36:39 GMT

My open GBPUSD short position was stopped at break-even (1.6617) as prices surged past resistance at the top of a falling channel established from the August high. This coupled with the push above the key 1.50 level in EURUSD suggests the wave of Dollar selling has yet to be exhausted and another leg higher in both pairs may be ahead. That said, my fundamental bias remains bullish on the US currency, driven in the near to medium term by a likely downward reversal in the risk rally of recent months that would boost USD as a safe-haven asset. I will stand aside for the time being and look for selling opportunities in the days and weeks ahead.

USDJPY Short (Pending)

Unknown Field-Author — Wed, 21 Oct 2009 19:54:57 GMT

Last week, I wrote that USDJPY may be setting up bullish correction with the emergence of positive RSI divergence ahead of the major double bottom at 87.09, looking for a break above the top of a channel established from the August swing high to open the door for a run towards support-turned-resistance at 92.09. Indeed, this very scenario is now upon us, and I will keep an eye out for signs of bearish reversal near 92.00 to enter short, trading along with the firm down trend in place since 2007.

EURUSD (pending)

Unknown Field-Author — Tue, 20 Oct 2009 23:53:34 GMT

Broadly speaking, positioning retains a bearish bias with a clear Rising Wedge bearish reversal formation bolstered by negative divergence on the RSI oscillator (weekly chart). The bulls face a major hurdle at the 1.50 level, a level that is significant both psychologically and technically with the intersection of the wedge top and a horizontal resistance level that has come into play on numerous occasions over the past two years. I will remain on the sidelines for the time being as prices find their bearings at this key juncture.