EURO
Within the ascending channel we can see the formation of a bearish candlestick structure below the 20 MA at 1.4820 an that favors the pair for further correctional movement affected by the downside move on RSI, yet this downside move might be highly volatile due to the heavy selling saturation on Stochastic.
Monthly Technical Analysis - November 2009
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GBP
The pair head to the upside last month, where 1.6675 held against the pair's upside move; this level is very strong which enabled the pair to form a bullish patter which will be activated once the pair consolidates above the mentioned resistance.
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JPY
The pair failed in consolidating above 91.70 which is the 38.2% correction shown above and that is what pushed it to the downside. Upside signals seen on the chart and abstracted from harmonic analysis yet the pair does not have the needed momentum to continue to the upside.
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CHF
The pair head to the upside in the past six days of lat month and now is consolidating below the 23.6% correction shown on the chart below; and this correction level resides at 1.0275.
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CAD
The pair is moving to the upside and was capable of consolidating above the 50 MA at 1.0700 and at the same time we can see that the pair resumed to trade above 1.0660 and by that resumed to trade within the sideways wave seen on the next chart.
As we can see on the above provided chart, the 20 MA has formed a strong resistance against the pair, pushing it towards the major support level for the upside trend at 1.4620, and this level is considered very critical and important over short term basis. The upside trend is still valid over the medium term yet the top recorded around 1.5065 is capable of resuming the downside path and the pair now needs to gain enough upside momentum to continue the medium term bullish move.
The proposed descending channel is still generally affecting the pair's trading, while we can see the simple 50 MA preceding the resistance level for this channel where its resistance resides at 1.0360; we can see that the saturation on Stochastic in addition to RSI nearing the resistance level on momentum indicators at 55 points is restricting the breach for the resistance.
From a wider perspective, we can currently see that the pair is still trading within the ascending channel that started on the fourth of March 2009 and its major support level currently resides at 1.4590, while scattered support levels are seen among 1.4470 and 1.4310 and are protecting the upside wave over the medium term. All those indications make us see that the upside wave will prevail, yet note that breaching 1.4310 with a daily closing will alter the trend to the downside for the rest of the year!
Support 1.4680 1.4620 1.4590 1.4470 1.4310
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Resistance 1.4820 1.4885 1.4965 1.5065 1.5130
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Recommendation Based on the charts and explanations above our opinion is buying the pair at 1.4590 and targeting 1.5065 and stop loss below 1.4310, might be appropriate
As seen on the provided chart, the 1.6675 now resembles the neckline for the proposed bullish pattern and this possibility remains valid as far as the pair is trading above 23.6% correction at 1.6240 with a daily closing. The Moving Averages are trying to tilt to the upside while Stochastic provided a positive crossover and ADX is pointing as well to the upside. RSI lingers near oversold areas which might increase the volatility this month, yet as we mentioned trading above the abovementioned correction level keeps the upside wave valid over short and medium terms.
On the chart above, we can see that the pair completed the AB=CD harmonic pattern at 100% extension where the pair corrected slightly more that 38.2% of the wave, yet did not help momentum indicators and the direction to continue to the upside which resumed the pair south. The 100% extension is the completion level for the harmonic pattern and is the most important level during this month's trading; this level resides almost at 88.00. Trading above this level will keep the upside wave valid in order for the pair to correct the steep decline. The upside correction does not alter the medium term's downside trend, as the descending channel remain intact as far as trading is below 95.35 which is the channel's major resistance.
This month the chance is still valid for the upside move's continuation yet after declining to test lower support levels, yet stability for 88.00 with daily closing will keep the upside potential valid. Any daily closing below the mentioned level will pressure the pair into a huge sell-off and cancels our expectations.
Support 89.80 88.40 88.00 87.10 84.20
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Resistance 91.15 92.90 94.00 95.35 96.80
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Recommendation Based on the charts and explanations above our opinion is buying the pair at 89.90 and targeting 94.00 and stop loss below 87.90, might be appropriate
The harmonic analysis shows the possibility for an upside correctional move for 23.6% at least of the CD wave and this correction resides at 1.0485; yet as we can see that on the chart the harmonic structure is not perfect and the waves extended beyond the ideal correction and extension levels and for that we need to take the pattern into consideration as momentum indicators support it.
From here, we can not ignore the upside move that the pair acquired over intraday basis, yet levels between 1.0360 and 1.0485 might be capable of resuming the downside momentum for the pair and to continue to the downside. The downside wave remains valid as far as 1.0630 remains intact over medium term basis and 1.0480 will keep the downside wave valid over short term basis.
Support 1.0205 1.0140 1.0085 1.0000 0.9920
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Resistance 1.0325 1.0360 1.0485 1.0630 1.0770
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Recommendation Based on the charts and explanations above our opinion is selling the pair with caution at 1.0480 and targeting 1.0000 and stop loss above 1.0630, might be appropriate
RSI is still pointing for further upside movement and is trading to the upside; while Stochastic is heavily overbought and MACD is trying to enter into positive areas yet till now no signs are seen. Consolidating above 1.0660 and steadying above 50 MA at 1.0700 might cause further upside movement towards the 100 MA at 1.0935 yet at the same time the MA formation is still bearish where the 20 MA is trading below the 50 MA while the latter is trading below the 100 MA. From here we can see that the short term upside trend is to continue yet at the same time the medium term trend is still valid to the downside as far as trading is below 1.1090.
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On the other hand, we can see that the bearish channel's signs are starting to appear and its resistance level is expected to be at 1.1050 protected by the 100 MA which increases the strength of the 1.1090 resistance.
From here we can see that the short term trend is indeed to the upside yet the medium term trend is still bearish; combining those factors we expect that trading this month is to be biased sideways and that remains intact as far as trading is below 1.1090 which might tilt the bias to the downside after the current upside correction is over.
Support 1.0700 1.0660 1.0510 1.0435 1.0385
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Resistance 1.0940 1.1050 1.1090 1.1190 1.1250
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Recommendation Based on the charts and explanations above our opinion is selling the pair at 1.0940 and targeting 1.0510 and stop loss above 1.1190, might be appropriate
On the second chart over weekly basis, we can see that ADX supports the continuation of the upside wave that was corrected; this wave has taken the form of an Impulsive Wave and formed the third wave and then started the W-X-Y correction and now we are in the beginning of the fifth wave. The best target for the completion of the fifth wave is 1.7370 and as we see on the chart trading above 1.5890 keeps the medium term trend valid to the upside.
From here we can see that the direction is to be valid to the upside targeting 1.7370 which requires 1.6240 to remain intact over short term basis and consolidation above 1.5890 over medium term basis. Breaching 1.6675 will confirm the upside move and cause the bullish move to accelerate to the upside.
Support 1.6360 1.6240 1.6135 1.5935 1.5890
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Resistance 1.6570 1.6675 1.6715 1.6975 1.7370
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Recommendation Based on the charts and explanations above our opinion is buying the pair at 1.6360 and targeting 1.7370 and stop loss below 1.5890, might be appropriate