Daily analysis and trading strategies 2-22-10

EURUSD

Trading strategy: long at 1.3565, stop at 1.3505(1% risk), 1st objective at 1.3625, 2nd objective at 1.3700

Last week's losses against the U.S. dollar have been lower comparing to the weeks of January and extended corrections have been seen during the last 3 weeks - providing a pattern consisting of 170 points up from the weekly open price. Although gains were short-lived and lower lows have been formed, current conditions are pointing towards a potential bounce off recent lows, in a counter-trend move which could be corrective only. However, one week ago I mentioned in my report that I'd prefer to see a reversal pattern around 1.3480 which is the 61.8% of last year's full upward move. The reversal pattern was formed Friday, as the euro managed to rebound and close higher after it reached a fresh low. If we look at the daily charts, we can see a rejection off recent lower low along with lower deviations from open to close on weekly bars on last two weeks and also 3 upside corrections of 170 points on the last 3 weeks - putting this all together, I'd say that signs of exhaustion of current down-trend become more obvious. Not considering the news about Greece or the scenarios of EU zone breaking apart etc making the rounds - price action interpreters might share the same view as mine. I don't call for a major turn in current trend but simply focus on current charting conditions. Below recent bottom at 1.3445 my view would be negated, considering new lows to come. But for now, I think there's some significant upside action to be seen - up to $1.42 if the interim short-term resistance at 1.3850/60 will be easily breached. Current exchange rate is 1.3622 @06:55 GMT

Support: 1.3600, 1.3525/45, 1.3500 and 1.3445 Resistance: 1.3650/60, 1.3700, 1.3760/70 and 1.3840/50 Market sentiment: long term - bullish, medium term - bearish, short term - bearish, intra-day - bearish

EURUSD daily chart 2-22-10

EURUSD weekly chart 2-22-2010

NZDUSD

Trading strategy: stand aside

The NZ dollar found support on the 50% of the .6805-.7080 up leg and recovered some of the lost ground, currently trading at 70.20 cents. Minor resistance comes around .7050 - formed by a downward trend line covering recent highs, as seen in the 4hrs chart below. A more notable barrier is seen around .7150 and a break above that would be an important bullish confirmation - opening .7350. Intra-day sentiment is bullish for now and potential pullbacks may find support around .6980-.7000. Current exchange rate is .7016 @06:55 GMT

Support: .6980/00, .6950 and .6900 Resistance: .7050/75, .7100 and .7150 Market sentiment: long term - bullish, medium term - slightly bearish, short term - neutral, intra-day - bullish

NZDUSD 4hrs chart 2-22-2010

Have a great day!