Daily analysis and trading strategies 01-29-10

EURUSD

Trading strategy: small short at 1.4050, stop at 1.4110 (0.5% risk), 1st objective at 1.4000, 2nd objective at 1.3950

The euro remains under pressure since weak rallies are finding resistance and it couldn't hold pullback gains above the $1.40 mark. The 1.39 region is again in focus and more selling is in the cards. Potential pullbacks are likely to challenge resistance within the same 1.4050-1.41 region while extended dips may get to 1.3850 ahead of the week-end. Short-term sentiment is negative, since we are far from levels where the 'momentum bell' would ring signaling a change, such levels being set around 1.4250 - median retracement level of the current down leg from 1.4580 to 1.3910. Selling into rallies is favored for now as daily deviation to the upside from open prices averaged 20 to 30 points this week. The USD index holds gains into the freshly conquered territory and found support near 78.50 yesterday, as expected and noted in my previous article's chart. Same 78.50 should limit gains within the coming days, maintaining the positive bias, while interim support is emerging at 78.70. Current exchange rate is 1.3945 @07:27 GMT

Support: 1.3900/10, 1.3850, 1.3800 and 1.3750 Resistance: 1.4000, 1.4050, 1.4080/00, 1.4130/50, 1.4200/20, 1.4250/70 and 1.4300 Market sentiment: long term - bullish, medium term - slightly bullish, short term - bearish, intra-day - bearish

EURUSD 4hrs chart 1-29-2010

NZDUSD

Trading strategy: stand aside

Yesterday's short-lived rally came close to my strategy's short entry at .7150 as the New Zealand dollad sighed out of exhaustion ahead of the mid .71 region and collapsed, bringing another 1 full figure on bear's part. Submerged below the .7100 mark, but still holding above the 70 cents, the NZ dollar doesn't show any intuitive signs of recovery so we should dare to focus lower - at .7000 on first phase, which I expect to bring some support from bulls' side. .6885 remains my short-term target for now, while .7200 is on the safe side. Above that, I might consider buying on breakouts. Aussie's break below 61.8% of .8735-.9325 doesn't help either, in respect to correlation between the two pairs, hence favoring further pressure to the South. Current exchange rate is .7042 @07:27 GMT

Support: .7020, .7000, .6970, .6900 and .6855 Resistance: .7100, .7150/60, .7200/05 and .7230/50 Market sentiment: long term - bullish, medium term - bullish, short term - bearish, intra-day - slightly bullish

NZDUSD daily chart 1-29-2010

AUDUSD daily chart 1-29-2010

On Monday I wrote on some potential setups in AUDUCAD, EURAUD and EURCHF. Here's a few words update:

AUDCAD

Tiredness showed up 4 times, in 4 days, just ahead of .9600. Therefore -  no break out. I still believe that the AUD may catch a pulse and break above the .9600 mark, but this week already came to an end, so the bullish scenario remains doable next week.

AUDCAD daily chart 1-29-2010

EURAUD

A rally to upper channel's band was a bit too optimistic, as the EUR fails to print rates above the 1.57 handle against the aussie dollar. My short-term model is in a quasi-bullish phase, still, as 1.55 confirmed an interim bottom. Aggressive traders may consider buying on close above 1.5700, but such as AUDCAD's case - remains in play for the coming week.

EURAUD daily chart 1-29-2010

EURGBP

Planned to sell around .8850 - and 60 points below that was the higher high to see, so far, on my fancy charts. The euro is still too weak to recover but holds above weekly trend line coming from .8400 of June. The .8600 should hold for now, and if it does - I reconsider the .8850 level to sell on extended rallies.

EURGBP daily chart 1-29-2010

Have a great week-end!