Trading Strategies for Various Currency Pairs
03/26/2009 10:36 am EST
EUR/USD – Tuesday’s break below 1.3490 has put the pressure back on the downside, and although trade remains extremely choppy, our short-term bias is for additional setbacks over the coming days. Daily studies are just now rolling over from overbought and show plenty of downside potential. Our initial target comes in by the ten-Day SMA. Only back above 1.3740 negates. Position: SHORT @1.3635 for a 1.3310 objective, revised stop at 1.3635.
USD/JPY – The market is content on consolidating Tuesday’s gains with some inside day price action on Wednesday. We retain a mildly bullish outlook but will need to see a break above 98.60 or below 96.90 for clearer directional bias. Back above 98.60 will open a direct retest of the 2009 highs at 99.70 and beyond. Strategy: Sidelined, awaiting clearer signal.
GBP/USD – The pair is struggling to establish above the 100-Day SMA and could be on the verge of a resumption of the broader downtrend following the latest break below Tuesday’s low at 1.4545. Daily stochastics are well overbought and are just now looking to cross over. The key level to watch below comes in by 1.4395 with a break to confirm bearish resumption and accelerate declines. Only back above 1.4780 negates. Strategy: Sidelined, awaiting clearer signal.
USD/CHF – The pair has found some decent support at current levels in the form of the 50% Fib retracement off of the 1.0370-1.1970 move (1.1170) and the 200-Day SMA (1.1200). Look for a rebound from current sub-1.1500 levels back into the familiar range over the coming days. Below 1.1165 negates. Strategy: Sidelined, awaiting clearer signal.
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USD/CAD – Despite the recent decline, the overall structure remains quite constructive with the current pullback still classed as corrective. Setbacks have broken down through the 61.8% Fib retrace off of the 2009 low-highs but are now struggling to establish below. We are looking for a medium-term higher low by current levels and above 1.2025 (28 Jan low) ahead of the next upside extension beyond 1.3065. Strategy: Sidelined, awaiting clearer signal.
AUD/USD – The market has stalled out by the 78.6% retrace (0.7050) off of the 2009 high-lows and could be looking to roll back over for a resumption of the broader downtrend. Look for a break below 0.6865 to confirm and accelerate declines. Only back above 0.7095 negates and exposes retest of the 0.7270, 2009 highs. Strategy: Sidelined, awaiting clearer signal.
NZD/USD – We have begun to see the onset of a much needed and healthy corrective pullback following the sharp rally out from 0.4915 back on March 10 that resulted in ten consecutive up days. The daily RSI is looking to cross down from overbought while stochastics look to be on the verge of a negative cross. Look for a break below 0.5550 to accelerate the decline over the coming sessions. Only back above 0.5750 negates. Strategy: Sidelined, awaiting clearer signal.
By Joel Kruger, Technical Currency Analyst, DailyFX.com