Forex Technical Analysis for August 23, 2011

EUR/USD Technical Analysis for August 23, 2011

The EUR/USD pair rose on Monday, but pulled back to form a shooting star. This is an especially bearish signal as it not only shows a lack of follow through, but the top of a downward channel as well. This shows that the pair is very weak, and a break below the 1.4350 level looks like a trigger to fall again, perhaps down to 1.41 or so as it is the bottom of the most recent consolidation area. We will not go long until we break above the 1.4525 level or so. With all of the European debt issues, it is very difficult to own the Euro in this environment.

AUD/USD Technical Analysis for August 23, 2011

The AUD/USD pairhad a bullish day, but fell late in the session to form a shooting star just below the 1.05 level – a major area of resistance. Because of this, it appears this pair will fall from here, but it must be known that the 1.05 to 1.01 area seems to be the recent consolidation range, and we feel that it will remain so. The “risk off” trade seems to be coming into vogue at the moment, so it appears that selling a break below the Monday low should be a decent short signal for the short-term.

EUR/CHF Technical Analysis for August 23, 2011

The EUR/CHF is essentially a dead market at this point. The Monday action was virtually non-existent, and will more than likely remain so as the Swiss National Bank has been active in trying to push this currency pair up. The pair seems to want to fall, but with the central bank meddling in this market it will be tough for it to do so. The 1.15 level certainly is resistance, but if we can break above it – we will run to 1.18 or so. If we can get a larger red candle, we go to 1.10 and eventually parity. Until we get one of these signals, we are sitting tight.

NZD/USD Technical Analysis for August 23, 2011

The NZD/USD pairrose on Monday, and seems to have found a bit of support at the 0.82 level. The pair is decidedly bullish, but the latest action is somewhat contradictory. The 0.8000 level below here is major support, and if it gets broken – we will go much lower. A break to the upside of 0.85 would be massively bullish. Until then, we are likely to meander around these levels.

USD/JPY Technical Analysis for August 23, 2011

USD/JPYhad a wild run on Monday, as it was both bullish and bearish at times, eventually forming a long-legged doji at the end of the session. The market wants to short this pair, but the Bank of Japan is making it obvious that the falling of this pair will no longer be tolerated. The 77 level seems to be a bit of a battleground at this point and as such makes a natural magnet for the currency pair. The pair is impossible to short safely, but a move above the highs on Monday’s session could be a good buying signal for the next 2-300 pips.

GBP/USD Technical Analysis for August 23, 2011

The GBP/USD pairattempted to break above the 1.65 level again on Monday, but was pushed back as traders sold the Pound at this massive resistance level. The stock markets found themselves selling off later in the day, and this in turn became a reason to sell risk-related things such as the Pound. The 1.65 level represents the top of the recent trading range, and it seems that it will remain in place for the short-term. A break below the lows on Monday would be a sell signal for a few hundred pips, as we should run to about 1.61 or so if we do break that level.

USD/CAD Technical Analysis for August 23, 2011

The USD/CAD pair fell and then rose on Monday, showing how much the markets lack conviction these days. The oil markets are playing havoc with the CAD, and the appreciation of said currency is simply difficult to do at this point. Because of this, we feel that the USD will rise against the CAD, but will not buy this pair until we close above the 1.0000 level as we see it as long-term resistance. A break below 0.9800 will have us shorting this pair, but until we get one of these two – we simply see this market as choppy and consolidating.

USD/CHF Technical Analysis for August 23, 2011

With the Swiss National Bank artificially lifting this pair, the Monday session saw very little action in the USD/CHF pair. The Swiss Franc has been abandoned by the average trader, and is starting to sit still because of it. The central bank has all but killed trading in this market, and most traders will find it of no interest. However, it is important to pay attention to this kind of market because when it moves – it will move quickly and with certainty. The breaking of 0.8000 to the upside has us racing towards the 0.83000 level, and a break of the recent lows over the last few weeks will have us trading down towards 0.7500 or so. The trend is down, so we prefer a short set up.

 

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