Daily analysis and trading strategies 2-2-10

 @ibtimes
on February 02 2010 2:04 AM

Quote of the day: Luck never gives; it only lends - Swedish Proverb

EURUSD

Trading strategy: short at 1.4030, stop at 1.4080 (1% risk), 1st objective at 1.3980, 2nd objective at 1.3930.

Yesterday's recovery has been modest, the daily range being 85 points - 40 points less than the 20 days average. However, upside remains slightly favored for now as the euro maintains its bid tone against the buck and further gains are likely. Resistance comes around the 1.40 handle followed by the 1.4130 and 1.4200, higher - on a short term basis. If downtrend resumes, recent bottom at 1.3850 would come in focus and a break lower will open 1.3750. According to the COT data, as seen in the weekly chart below, sellers' positions rose to figures seen around August 2008, when the euro was trading around same region of $1.40, before collapsing to $1.25, therefore expectations for extended losses are quite high. For now, I feel there's some room to the upside to 'collect' the pending short orders - within the 1.40-1.4050 range, and maybe around 1.4130 higher. Above 1.4130, short-term sentiment turns positive. Current exchange rate is 1.3927 @07:03 GMT

Support: 1.3850, 1.3800 and 1.3750 Resistance: 1.3950, 1.4000, 1.4030/50 and 1.4130/50 Market sentiment: long term - bullish, medium term - slightly bullish, short term - bearish, intra-day - bullish

EURUSD
EURUSD 4 hrs chart 2-2-2010
EURUSD
EURUSD weekly chart COT data 2-2-2010

NZDUSD

Trading strategy: holding half of yesterday's short at .7090, stop at breakeven, objective at .7000

My expectation for NZD to face resistance around .7090/00 on yesterday was correct, and my strategy's short at .7090 was triggered - being a good trade so far, as the 1st objective was reached at .7040, and 2nd is still in cards - with stop at break-even. RBA's rate hike to 4% was most likely priced in, hence yesterday's gains of AUD and NZD against the buck, but the RBA left rate unchanged at 3.75% - therefore downside pressure remains high. Intra-day resistance is formed around .7100, followed by .7150, .7200 and .7300 - higher. Intra-day sentiment is slightly bearish and the pullback to .7040 could have been corrective only. Current exchange rate is .7058 @07:03 GMT

Support: .7000, .6970, .6900 and .6850/70 Resistance: .7080/00, .7150/60, .7200/05 and .7230/50 Market sentiment: long term - bullish, medium term - bullish, short term - bearish, intra-day - slightly bearish

NZDUSD
NZDUSD hourly chart 2-2-2010

Have a great day!

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