Forex Technical Analysis for August 25, 2011

EUR/USD Technical Analysis for August 25, 2011

The EUR/USD pairtried to break above the 1.45 level again on Wednesday, but failed yet again. The US Durable Goods numbers came in much higher than expected, and as a result – the Americans sold off their currency and looked for risk elsewhere. As a general rule, this works as stock traders go into places like Europe. However, with the Jackson Hole Fed Retreat being held, the real question is whether or not Mr. Bernanke will announce a form of QE3. If he does, the Euro should get a massive bounce from here. If he doesn’t – that would be USD positive. Until that announcement on Friday, this pair will be stuck in this area.

AUD/USD Technical Analysis for August 25, 2011

The AUD/USD pair fell on Wednesday as traders still struggle to break above the 1.05 level for any significant amount of time. The pair seems to be still reeling from the recent drop, and it appears that the 1.05 level is going to be very resistive. A fall from here wouldn’t be a surprise, but the Friday announcement by the Federal Reserve will be key for this pair, as any hint of QE3 in the US would send this pair skyrocketing as investors attempt to find yield in other countries. Unless that happens, the 1.05 area could be a temporary cap on this market.

EUR/CHF Technical Analysis for August 25, 2011

The EUR/CHF pair fell a bit on Wednesday, but then bounced back to form a hammer. This looks fairly supportive for this pair, but the truth is that the 1.15 level has been like a brick wall in this market. The Swiss National Bank is sitting below and willing to support this pair as the fall has been very destructive to their economy. However, if the market moves below the bottom of the hammer, it then becomes a “hanging man”, which is a very bearish sign. A daily close above the 1.15 level is needed to even consider buying this pair.

 NZD/USD Technical Analysis for August 25, 2011

The NZD/USD pairfell slightly on Wednesday as the pair continues to consolidate just under the 0.83 level. The area is a minor support and resistance area, and until we get some clear indication out of the Federal Reserve on any future QE3 plans on Friday – we may see very little action in this pair. The Kiwi dollar being a commodity currency will be directly affected by the plans of the Fed for the Dollar. Any hint of QE3 sends this pair much higher on Friday, but until that announcement, it might be a quiet market.

USD/JPY Technical Analysis for August 25, 2011

The USD/JPY pairrose on Wednesday, as traders began to sell off the US Treasury market, thus driving up the yield on most notes. As money flow goes, chasing yield is one of the simplest explanations for currency moves. While most forex traders act in a vacuum, the truth is that even thought the market is the largest one – it follows other markets more often than not. In reality, the bond market is the dog, and the forex market the tail. Money goes to where it is treated better, and in this case – that is starting to tilt towards the United States. While it is too early to call this a buy at this point, if we reach 77.50, we feel this pair will keep rising.

GBP/USD Technical Analysis for August 25, 2011

The GBP/USD pair fell on Wednesday as traders sold off the Pound against the Greenback. The dollar had been believed for some time to be about to be weakened by the Fed on Friday as it introduced QE3. The fact that the market is starting to see Durable Goods orders and money supply in the US rise, it shows that the Fed is less likely to ease, and therefore the relatively weak Pound will suffer against it. Of course, this can all change on Friday, but the 1.65 level has held quite firmly as of late, and it appears we are heading lower. A break of the lows on Wednesday has us selling again.

USD/CAD Technical Analysis for August 25, 2011

The USD/CAD pairhad a very neutral day on Wednesday as the market didn’t get much in the way of news to push it around. With the oil markets being so quiet, there is little to push the Loonie around. The pair continues to be a scalper’s market until it breaks above the parity level, or below the 0.98 level. Until then, we can only take small positions with small trades.

USD/CHF Technical Analysis for August 25, 2011

The USD/CHF pairrose slightly on Wednesday, but still failed to break above the 0.8000 level – a level that has been massively resistive over the last couple of weeks. Until we get an announcement out of the Jackson Hole central bankers retreat, it is very likely that this pair sits still as the Swiss National Bank is currently sitting below, and is willing to step into the market and put pressure on the Franc. However, unless there is QE3 being announced on Friday – the upside will be limited as well.

 

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