*** MonthlyTechnical Analysis

EURO

Despite the pair failed to successfully breach the 1.3350 level, we see signs of short term incline as seen in the above image and we see the pair was able to show a weekly close above the 20 MA at 1.3215 where from there the pair will attempt to extend its gain towards the key resistance for the downside channel that started in the week starting 13-07-2008 at 1.3545. What helped provide the pair with bullish momentum was rebounding from the 61.8% correction for the above seen bullish wave.

Monthly Technical Analysis - May 2009

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GBP

The Cable is attempting to breach the 23.6% correction for the downside wave that started on 15-07-2008 at 1.5055 where looking at the secondary image we see trading is within a minor ascending channel targeting the above mentioned level. The breach of this level will result in a strong bullish wave on the medium term to target the 38.2% correction at 1.

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JPY

The long term downside channel that started on 17-07-2008 continues with a key resistance at 101.95 whereas the 61.8% for the incline that started on 14-12-2008 at 101.65 is keeping the downside trend intact as the pair failed to build a solid base above 100.70. We see more downside pressures as the pair is being overbought as seen on the stochastic indicators while the ADX continues to support the downside trend despite being weak.

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CHF

The pair failed to maintain levels above the key support for the upside channel as it breached it to the downside yet the 38.2% correction at 1.1360 was able to limit further declines. On the other hand, the 100 day MA at 1.1500 is a strong resistance which may pressure the pair to the downside ignoring being oversold on momentum indicators.

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CAD

The pair was able to breach the key support for the sideways channel trending to the upside as it formed a bearish technical pattern targeting 1.1345. On the other hand, momentum indicators show the pair being oversold which may result in an upside correction before reversing to the downside yet as the 1.2395 (100 day MA) remains intact, the downside trend continues.

However in the second image, we see contradicting signs where the pair failed to close above the key resistance for the descending channel forming a bearish candlestick formation. On the other hand, trading remains above 1.3075 (the 100 day MA) which is providing the pair with enough bullish momentum yet the key resistance at 1.3290 followed by 1.3375 continue to pressure the pair to the downside.

From here dear reader we expect trading this month to be quite volatile as we see mixed signals on technical indicators making it hard to determine the trend however we support the upside direction more as the pair attempts to breach 1.3375 to target 1.3545 as far as 1.3075 remains intact. Breaching 1.3015 to the downside will take the pair towards 1.2765 at the very least where we shouldn't neglect the medium term downside trend which remains as far as 1.3545 is intact.

Support 1.3120 1.3015 1.2900 1.2765 1.2520

Resistance 1.3320 1.3375 1.3445 1.3545 1.3715

Recommendation According to our analysis, we believe the pair is to gather bullish momentum from 1.3075 with targets at 1.3445 yet maintaining levels below 1.3015 will invalidate the upside movements.

The second image confirms the upside direction supported by the 1.4585 level yet we see overbought signals on momentum indicators which may stall the upside movements and result in high volatility in a downside correction yet as far as 1.4585 is intact, the pair will continue to attempt breaching 1.5055 where if successful will open the way for the pair towards 1.5140 and 1.5700 (100% expansion and 138.2% expansion respectively) for the ascending channel that started on 23-01-2009 and ended on 09-02-2009.

Therefore we believe the pair is to incline this month yet may correct to the downside to gather bullish momentum from 1.4585 and 1.4490 in an attempt to build a solid base above 1.5055

Support 1.4785 1.4585 1.4490 1.4380 1.4220

Resistance 1.5055 1.5140 1.5230 1.5450 1.5700

Recommendation According to our analysis, we believe the pair is to gather bullish momentum from 1.4785 with targets at 1.5140 yet maintaining levels below 1.4490 will invalidate the upside movement.

On the daily charts however, we see the exact opposite as signs of inclines started to emerge once again after maintaining levels above 98.85 (50% correction for the previously mentioned incline) which makes us believe that the pair will attempt to target 100.70 before heading towards 101.65 – 101.95 as technical indicators confirm the trend.

From here we expect to witness upside movements followed by a downside correction; where the upside direction is to continue as far as 98.85 remains intact yet the 101.65 level may limit further gains towards 101.95 to reverse the trend once again to the downside.

Support 98.85 96.60 95.95 94.30 93.40

Resistance 99.85 100.70 101.65 101.95 102.70

Recommendation We advise to avoid trading on the pair

In the above image, we see the bearish momentum gathered from the bearish pattern which confirms movements to breach 1.1360 and 1.1300 to initiate a new downside wave targeting 1.1170 and perhaps extend towards 1.0985 (the 50% and 61.8% correction). What may delay the decline is the fact that the pair is trading within oversold areas yet as far as trading remains below 1.1500 and 1.1585 the downside trend remains.

From here we will see the confirmation of the downside trend after maintaining levels below 1.1360 and as far as 1.1585 remains intact; however at the same time, we may witness high volatility in financial markets and hence on the pair.

Support 1.1360 1.13001 .1215 1.1170 1.0985

Resistance 1.1500 1.1585 1.1720 1.1780 1.1960

Recommendation According to our analysis, we believe the pair is to gather bearish momentum from 1.1500 with targets at 1.1170 and 1.0985 yet maintaining levels above 1.1585 with a daily close above it will invalidate the downside movements.

Looking closer at the pair, we see that the suggested targets for the downside trend are at 1.1755 and 1.1625 which remain as far as 1.2340 is intact as well. Movements may seem complex yet using Fibonacci expansions, we see several harmonic patterns that may help the pair exit an oversold area.

From here dear reader, we see the pair is to decline this month as far as 1.2395 remains intact targeting levels between 1.1755 and 1.1625 yet the overall trend continues to target 1.1345

Support 1.1770 1.1625 1.1550 1.1410 1.1345

Resistance 1.2130 1.2225 1.2340 1.295 1.2530

Recommendation According to our analysis, we believe the pair is to gather bearish momentum from 1.2040 with targets at 1.1625 and 1.1345 yet maintaining levels above 1.2395 will invalidate the decline