Thursday, May 3, 2012

Forex Technical Analysis

EURUSD: Fell apart yesterday but has since found rising support above 1.3100 (see chart).  Looking ahead, its all about “will it or won’t it” be able to cross above its current 1.3170 resistance.  A break above could trigger momentum to the 1.3200 figure. However, after failing to trade above yesterday’s bounce high this morning, the pair is vulnerable to additional selling pressure if its support breaks. Important: Keep an eye out for today’s ECB meeting as it could be a catalyst to a breakout higher or lower.

GBPUSD: Had a good rise moving higher from 1.5800 to 1.6300 over the past few weeks.  However, the party has been running out this week.  The big test comes now as the GBPUSD is nearing its 1.6150 support.  If the level holds, it could trigger an upside move if the pair trades above its current short term downtrend (see chart).  On the other hand, a break below 1.6150 will prove that the GBPUSD’s rally is over and could set the way for further profit taking selling.

USDJPY: US ADP figures were worse than expected yesterday, but haven’t had much of an impact on the USDJPY.  As the chart shows, the pair has built a solid support level at 80.00.  If overall dollar buying can pick up any sort of momentum, the current demand holding the USDJPY could become more aggressive and trigger a move above 81.00.  Important: US Non Farm Payrolls is out tomorrow and is expected to raise volatility levels in the pair.

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