EURUSD: The EURUSD moved to an all-time high on Thursday helped by the decision by the ECB to leave interest rates alone. Comments by Trichet were also perceived as supportive as he stated that the ECB's goal is to battle medium-term inflation and to do anything to ensure price stability. All eyes will be on the release of the U.S. Non-Farms Payroll number on Friday at 8:30 EST. The latest expectations are an unchanged number. Any negative number is likely to hit the USD hard. Earlier in the week, expectations were for a 35K to 40K increase. The actual report would have to exceed this early guess to trigger a rally in the USD.
Technically, the main trend is still up with no sign of a reversal. The higher top, higher bottom formation has pulled away from a major up trending Gann angle at 1.5277 on Friday. This is key support. As long as the market can stay above this angle, higher markets should follow. A close under this angle will signal the end of the rally and set up the next retracement. Stay long until the support angle is broken.
GBPUSD: The GBP surged to the upside as the BoE decided to leave interest rates alone. This came as a mild surprise as pre-market guesses were mixed as to whether they were or were not going to cut rates another 25 bp. Economic reports must have convinced the BoE that the economy was fine for the time being. Word is that the BoE may look to change rates quarterly instead of month-to-month.
Technically, the GBPUSD took out a key swing top at 1.997, reaffirming the uptrend. This action also made a new high for the year and should trigger more upside to the last swing top from December 31 at 2.01. The ultimate target is a major 50% price at 2.02. Look for support today at an up trending Gann angle at 1.9840. The new main bottom is 1.9720. Trend traders can look for higher markets as long as this main bottom holds.
JPY: The weakness in the U.S. stock market brought buyers back to the Yen on Thursday. With the U.S. markets still under turmoil, expect a firm trade in the Yen. There is still plenty of room to the downside with 100 the next likely target. The Non-Farm number will have to be extremely bullish tomorrow to force the shorts out of this market.
Technically, the USDJPY is still in a bearish position as long as it stays under down trending resistance at 104.61. This angle is controlling the short-term direction of the market. The action on Thursday has formed a minor range between 102.59 and 104.19. Look for acceleration to the downside if 102.59 fails with 101.91 the next downside target. The only bullish sign would be a total recovery of resistance at 104.61. Otherwise, look for more downside pressure.
USDCHF: The short-term bottom made earlier in the week failed to hold as the weak U.S. equities markets caused a flight to quality rally in the CHF. Traders are seeking safety at this time.
The USDCHF broke through the old minor bottom at 1.03 and sold off hard. The market is walking down major Gann angle resistance at 1.0427. Look for selling opportunities on rallies back to this angle. Use this angle as a trend indicator. As long as the market remains under this angle, look for more downside pressure. There may be some minor support at 1.01.
USDCAD: The USDCAD traded in a tight range as the market awaited both Canadian and U.S. employment data. Higher commodity prices have been supportive to the Canadian, but the BOC is watching for any signs of a slow down in the economy to cut rates further.
The technical set up is bearish. The main range is .9056 to 1.0379. This makes .9718 to .9561 the key support zone. Last week the market held .9718 and triggered a rally to .9978. The action the past two days makes .9978 the new main top. As long as the market stays under this top, then look for down side pressure. There is minor support at .9844. It should act more like a pivot. Look for this price to fail and the market re-test the recent bottom at .9719. The USDCAD is likely to accelerate down through this price to .9561. This pattern remains bearish as long as the main top at .9978 is not violated.
AUDUSD: The AUD may be forming a top as comments from the RBA earlier in the week pretty much put a stop to any expectations of any further cuts in the near future. AUD traders are taking their money off the table as a precaution. It is going to take a sizeable break in the market to attract new buying. With signs that the Australian economy may be slowing down, look for a place to get short. Unless the RBA completely reverses its negative comments, the short side may be the safest.
Technically, there are signs that the AUDUSD may be finished on the up side. It is currently in a position to begin its turn down. The first leg down from the top was .9499 to .9217. This makes the upside resistance zone .9358 to .9391. Down trending resistance is at .9379 and .9439. Watch for sellers at .9379 to .9391. Aggressive counter-trend traders can trade the short side from this level. If the market regains .9391, the look for the formation of a double top from the all-time high at .9499. Since the up trend was so long in terms of price and time, it may take several days to distribute. Be patient.
NZDUSD: By leaving rates unchanged on Wednesday, the Bank of New Zealand is sending a sign that the economy may be cooling. Since the NZD piggybacked the AUD on this last rally, expect the break in this market to be more severe given the bearish comments about the AUD. The fundamentals support the start of a decline. Look to get short using the charts.
The NZDUSD is forming a top with a potential break to .7800 very likely. The short-term range is .8215 to .7919 making an upside retracement zone at .8067 to .8102. Down trending resistance is at .8075 to .8145. The best area to look for a selling opportunity today is .8067 - .8075. It would still be a counter-trend trade as the market is still distributing the top. A break through .7919 could attract selling pressure. Timing angles suggest a possible break to .7800 by March 17.
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