Daily analysis and trading strategies 1-18-10

Trading strategy: short at 1.4450, stop at 1.4510 (1% risk), 1st objective at 1.4390, 2nd objective at 1.4350

Euro's weakness extended last Friday and bids near the 1.4330 support zone have tested. Downside bias is stronger as the euro failed to hold recent gains into the 1.45 region, above the bottom established around 1.4460. Therefore, former support into the 1.4460 zone may provide resistance on intra-day rallies, limiting gains. On the lower side - support starts into the 1.4330/40 region, formed by the channel's lower band as seen in the chart below. While it holds - rallies above the 1.44 mark are possible but current mixed-bearish sentiment shouldn't encourage the euro going too far. Selling into resistance regions is probably a good plan for now. Current exchange rate is 1.4388 @06:57 GMT

Support: 1.4330/50, 1.4300 and 1.4250 Resistance: 1.4425, 1.4460/75, 1.4540/50, 1.4580/00 and 1.4700 Market sentiment: long term - bullish, medium term - slightly bullish, short term - mixed, intra-day - bearish

EURUSD daily chart 1-18-2010

NZDUSD

Trading strategy: stand aside

The New Zealand dollar opened lower today, testing session lows below last week's bottom at .7360. Intra-day sentiment is bearish and extended losses within the coming days may bring the .7300 handle in focus - top side of December. However, while the .7000 psychological support is in a safe zone and the pair trades comfortably near last year's top - uptrend remains intact in medium and long term basis, dips meeting strong buying demand. On the upside, intra-day resistance starts at .7360 which is being tested now, followed by .7400 and .7440/50. Potential break above .7400 would resume uptrend - .7500 coming back in focus. Current exchange rate is .7364 @06:57 GMT

Support: .7300 and .7250/85 Resistance: .7360, .7400, .7430/50 and .7500 Market sentiment: long term - bullish, medium term - bullish, short term - bullish, intra-day - bearish

NZDUSD daily chart 1-18-2010

Have a wonderful week!