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EURUSD Long Trade Favored above 12700

EURUSD Long Trade Favored above 12700

2012-01-12 14:08:00
Jamie Saettele, CMT, Sr. Technical Strategist
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FXCM Expo Videos (Innovative Tech. explains Key Reversals and RSI Signals)

Innovative Techniques with Traditional Technical Indicators

Trading with the Elliott Wave Principle

Seeing the Forest from the Trees: An Analysis of Global Markets

Afternoon Technicals (all charts)

Other TA (crosses, COT, etc.)

December Key Reversals-none

December RSI Signals-CADCHF GBPCHF NZDCHF USDCHF (all bearish)

Key Reversals Last Week-none

RSI Signals Last Week-GBPNZD (bullish)

Daily Key Reversals (RV) and RSI Signals (RS)

EURUSD_Long_Trade_Favored_above_12700_body_011112table.jpg, EURUSD Long Trade Favored above 12700

Morning Comments:

S&P future – May still crawl higher into trendline resistance from the May and July highs (at 1306.50 today). Coming under 1285 would warn of a larger reversal and shift focus to 1279.25 and 1267.25.

EURUSD_Long_Trade_Favored_above_12700_body_eurusd.png, EURUSD Long Trade Favored above 12700

USDOLLAR (Ticker: USDOLLAR): Is expected to work lower to complete a corrective decline from 10039. Watch the short term corrective channel and Fibonacci levels at 9926 (61.8% retracement) and 9932 (100% extension) for support. A former pivot defends the level at 9923. Longs are favored under 9946.

EURUSD_Long_Trade_Favored_above_12700_body_usdollar.png, EURUSD Long Trade Favored above 12700

Prepared by Jamie Saettele, CMT

EURUSD – May have found a low. An ending diagonal pattern may be complete from 13197. Diagonals are often fully retraced thus 13200 is not out of the question (short covering rally will surely be thrown around if the EURUSD does rally). Risk on any longs should be kept to this morning’s low under 12700. Under 12660 would return focus to 12590 and above 12818 would strongly suggest that the low is in place.

EURUSD_Long_Trade_Favored_above_12700_body_eurusd_1.png, EURUSD Long Trade Favored above 12700

GBPUSD – Risk on shorts should be kept to 15500 (above there triggers a reversal) and near term resistance is 15400. Price nearly reached the October low at 15271 this morning before reversing (240 minute bar key reversal at 5 am).

AUDUSD – The AUDUSD is on the verge of taking out 10385 and doing so would shift focus to the 11/3 high at 10446 and trendline at about 10485 (200 day average is at 10413). Today’s low at 10285 is the pivot (above is bullish and below opens up the door for a drop under 10260 and test of 10230).

NZDUSD – Has come off slightly from its best levels but focus remains on channel resistance and the 200 day average at 8030. Support is 7890-7915.

USDJPY – The rally from 7660 and decline from 7733 probably compose wave a and b of an a-b-c corrective rally. The implications are for a rally into 7750 (100% extension of rally from 7660) before the larger downtrend resumes.

USDCAD – After reversing on Monday from the trendline that extends off of November and December highs, the USDCAD has fallen into a 10140-10210 range. Near term pattern and larger direction implication is unclear but a pop above 10210 targets 10245 and a drop under 10139 targets 10075.

USDCHF – Carved out a key reversal Monday at its highest level since February 2011. The inability of the USDCHF to make a new high (above 9595) while the EURUSD did make a new low raises the possibility that the USDCHF rally is complete in the guise of a 5th wave truncation. Look lower as long as price is below 9595.

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele

To be added to Jamie’s e-mail distribution list, send an e-mail with subject line "Distribution List" to jsaettele@dailyfx.com

Jamie is the author of Sentiment in the Forex Market.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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