Daily analysis and trading strategies 1-27-10

Trading strategy: stand aside

The euro still trades near the 1.4030 bottom after it found intra-day resistance around 1.4100 yesterday. Down 0.70% for the week and 3% since January 1'st - more selling seems just around the corner. Today's FOMC Interest Rate decision at 19:15 GMT is the most important event to watch during the next 24 hours. Technically speaking, support may be challenged into the 1.4000/30 region and in case it fails, next downside barriers should get in focus around 1.3950 and 1.3900. In case euro will switch sides and test the upside - resistance may limit gains around 1.4100, then higher - and 1.4200 and 1.4250/65 which should be treated as more notable upside barriers. Short term sentiment is bearish, therefore unchanged since breaking below the flag's formation on January 18 / below 1.4350. Intra-day momentum is slightly bearish at the time of writing this, and will remain so while 1.4100 is intact. Current exchange rate is 1.4048 @07:25 GMT

Support: 1.4030/50, 1.4000/15, 1.3950, 1.3900, 1.3800 and 1.3750 Resistance: 1.4100, 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 - slightly bearish

EURUSD 4hrs chart 1-27-2010

USD index daily chart 1-27-2010

NZDUSD

Trading strategy: stand aside

Downside pressure is high ahead of RBNZ Interest Rate decision at 20:00 GMT. Yesterday's break below the rising trend line coming from .6685 strengthens the bearish sentiment and a new test of .7000 seems doable within the coming sessions. With no signs of a reversal yet, I think it's better to wait for the interest rate decision as market's reaction may provide some clues on upcoming direction. If .7000 breaks, next projection comes at .6855. Current exchange rate is .7038 @07:25 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 - bearish

NZDUSD daily chart 1-27-2010

Have a great day!