EURUSD

Trading strategy: stand aside

Pushing lower towards 6 months low ahead of tomorrow's FOMC interest rate decision, the euro is facing downside pressure after it failed to stabilize near 1.42 yesterday. Both short term and intra-day charts show signs of weakness and current trip into the lower territory may extend further below recent bottom at 1.4030, out of this month's 550 points range. In case of pullbacks to the upside, renewed selling may emerge around the 1.4200 handle, then higher - at 1.4265. Below 1.4015/30, next important objective comes around 1.3750 - 61.8% retracement level of 1.2885-1.5145, not far below 1.3800 which is the median retracement of 1.2455-1.5145 if we count the full range of 2009. If that 1.3750-1.38 region's significance is to act as a magnet in current bear market, then we should keep an eye on that 1.4000/30 support, since it is the last barrier on the way towards the lower support region I mentioned. Today's important economic event that could affect euro's sentiment is the German IFO Business Climate Index at 9:00 GMT, expected to print 95.00. A lower figure would add more fuel to current decline. Downside remains favored for now, selling rallies being the suggested strategy. Current exchange rate is 1.4085 @07:15 GMT

Support: 1.4030/50, 1.4000/15, 1.3950, 1.3900, 1.3800 and 1.3750
Resistance: 1.4130/50, 1.4200/20, 1.4250/70, 1.4300 and 1.4370
Market sentiment: long term - bullish, medium term - slightly bullish, short term - bearish, intra-day - bearish

EURUSD
EURUSD daily chart 1-26-2010

NZDUSD

Trading strategy: stand aside

The recent bottom around .7090 is still providing support although price spiked to as low as .7068 earlier today. Short-term sentiment is negative and tomorrow's RBNZ Interest Rate Decision is the key event that should provide clues on NZD's direction. Meanwhile, hourly price action suggests more selling as long as the pair holds below .7150 interim resistance, ahead of more notable barriers coming at .7200/20 and .7300. Below .7070/90, next support is seen on the .7000 handle, backed by .6970 and .6900. Current exchange rate is .7086 @07:15 GMT

Support: .7070/90, .7000, .6970 and .6900
Resistance: .7150/60, .7200/05 and .7230/50
Market sentiment: long term - bullish, medium term - bullish, short term - bearish, intra-day - slightly bullish

NZDUSD
NZDUSD daily chart 1-26-2010

Have a great day!