EUR/USD in summation

On the week, the USD and JPY made substantial losses against most majors amid positive data coming out of the US, suggesting recovery for the world’s biggest economy.  EUR/USD touched a two-week high before a report forecast to show sales of existing U.S. homes rose to the highest in 1&1/2 years.  In Asian trading the EUR/USD peaked at around 1.2983, its highest level since Jan 4.  In addition the euro has risen 2.3% since Jan 13.  Overall the currency market had a very quiet day during Asian session perhaps due to the winding down in readiness for the Lunar new year or that traders are waiting for news as Greece heads into a third day of talks with private creditors on a debt-swap plan.  In summation for the week, we have seen euro recover across the board on the back of short covering, technical retracement and stop losses.  That said market players are still quite comfortable with the thought that EUR/USD remains bearish as a trend due fundamental factors.  However in our opinion and with regards to risk/return ratio, the daily chart seems to indicate that the downward trend may resume on the break of 1.2930.

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Forex Analysis-Analysis and Suggestions on EUR/USD on 19th Jan. 2012

Yesterday, on the daily Forex chart, we can see that the Euro ended with a candlestick with little or no tail. Despite that the day before yesterday, the euro ended with a candle showing long tail, it still moved up high. After all, nobody is able to predict the high risky Forex market, is it? All what I do every day is just provide you suggestions for your reference. Now, as regularly, where the euro is going today on 19th Jan. 2012?

Technical Forex Analysis

On the 4-hour Forex daily chart, yesterday the euro was positive, almost trending all the way up. However, it did not bring Forex traders many surprises-that is to say, it did not move as what regularly did, which is a little bit hard for Forex traders to handle. At present, the euro is supposed not to reach any higher in the future.

Fundamental Forex Analysis

The markets are now focused on the Greek government’s negotiations with international creditors over the writing down of its debts. Without an agreement, Athens is likely to default on a bond repayment in March and could then trigger a forfeit of the €130bn bail-out agreed by leaders last year. Eyes are also focused on French and Spanish sovereign bond auctions later today.

As Raghee Horner, chief currency analyst for Interbank FX explains: “The daily EUR/USD has rallied to the swing short zone that is between the 20 period SMA close (aggressive) and the 34 period EMA low all while traders ponder what the odds are that the IMF will get an additional $500 billion to begin lending out (the U.S. has opted out) and whether the bulls have enough momentum behind the stream of positive headlines to make a run at 1.3000.”

Trading Suggestion

Downside risk still remains, the support line I analyze is 1.2806 and the resistance line is 1.2953.
I suggest that Forex traders should observe the 30-minute Forex chart for every tiny movement. Suggestion 1: if the euro drops to the line 1.2832, then Forex traders can consider going long. Suggestion 2: if the euro drops to 1.2806. Go short.
Suggestion 3: if the euro drops and breaks out the line 1.2806, but is not able to reach as high as this, Forex traders can consider going short.
Suggestion 4: if the euro reaches as high as 1.2953, go short.

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Forex Analysis-Analysis and Trading Suggestions of EUR/USD

Yesterday, on the daily Forex chart, we can see that the Euro ended with a candlestick with a long tail, showing that there would strong resistance line above. Actually after the euro met resistance at the line 1.2686, it retraced slightly. However afterwards it soon moved back up again and broke out the resistance with a long white body. Although it then turned afterwards, it did not break out the line 1.2697. Where the euro is going today on 18th Jan. 2012?

Technical Forex Analysis

On the 4-hour Forex daily chart, yesterday the euro trended sideways just below the line 1.2686 and after that it continued going upwards, breaking resistance lines again and again until it met resistance line at 1.2806. The euro dropped directly to the line 1.2710 and then rebounded strongly. For now the euro is still trending sideways.

Fundamental Forex Analysis

The euro is trading in a 1.2741-87 range so far, gaining ground for the third session in a row.
Stronger-than-expected GDP Chinese figures boosted sentiment on Monday, pushing riskier assets prices to higher levels. The upside was propped by positive German data out of the ZEW index, successful EFSF bond auction and a jump in the Empire State MI in the US.
The PSI talks are to resume today and would be one of the risk-events driving the markets in the upcoming weeks.

The cross is up 0.09% at 1.2757 as of writing, with resistance at 1.2810 (hourly high Jan.17) ahead of 1.2879 (high Jan.13) then 1.2898 (low Jan.4) and 1.2946 (high Jan.5).
On the downside, a breach of 1.2711 (hourly low Jan.17) would expose 1.2624 (low Jan.13) then 1.2592 (Lower Bollinger) and 1.2588 (monthly low Aug.14).

Trading Suggestion

Downside risk still remains, the support line I analyze is 1.2686 and the resistance line is 1.2777.
I suggest that Forex traders should observe the 30-minute Forex chart for every tiny movement. Suggestion 1: if the euro reaches the line 1.2765, then Forex traders can consider going short. Suggestion 2: if the euro reaches as high as 1.2777. Go short.
Suggestion 3: if the euro drops and breaks out the line 1.2686, Forex traders can consider going long; while they had better not take any action when the euro breaks out the same line for the second time.

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