Forex Technical Analysis for November 2, 2011

EUR/USD Technical Analysis for November 2, 2011

The EUR/USD pair fell hard again during the Tuesday session as contagion fear continues to grip the markets when it comes to dealing with the Euro. The Greek Prime Minister also has mentioned that there is going to be a referendum to vote on the EU bailout package in order to accept or defeat the package and austerity measures. The PM believes he can convince rioters and demonstrators that the harsh measures are prudent. The ability for him to do that is likely a pipedream, and the EUR/USD traded as such. The pair smashed through a few different handles during the session, and even got as low as 1.36 at the bottom, before finding a bounce. The pair is most certainly broken, and going long is almost impossible at this point. We recommend selling rallies until we can close on the daily chart above the 1.40 level, which we see as crucial.

USD/JPY Technical Analysis for November 2, 2011

After intervention on Monday, the USD/JPY pair attempted a rise on Tuesday, but formed a shooting star at the end of the day. The Bank of Japan acted unilaterally, which is normally a recipe for failure, so we think that the pair will likely fall over time as this intervention will likely fail again. The markets will more than likely attempt to push much lower, and perhaps even test the lows again. The trade might take some time, but if history tends to repeat itself – this pair should revisit the bottoms over time. We would sell any short-term rallies.

GBP/USD Technical Analysis for November 2, 2011

GBP/USDfell hard on Tuesday as traders sold off risk in general and even broke through the bottom of the hammer from Monday. The 1.60 level gave way, and this is a bearish move in our opinion. The 1.59 level seems to be the absolute bottom of support and we think a daily close below there would be a seriously bearish signal to sell this pair. The buy side is difficult to see from this point, and we think that the market also looks a little bit toppy at this point. We like selling rallies or a daily close below the 1.59 level.

USD/CHF Technical Analysis for November 2, 2011

USD/CHF rose during the Tuesday session, slamming into the 0.9000 level as the world looked for safety in the global markets. The Swiss Franc can no longer be bought for safety as the Swiss National Bank is working against the rise of the currency, so the pair is a one way deal that can only be bought. The 0.9000 level should continue to be resistive, but in the long run could give way as well. As the world gets more and more nervous, there is a real chance of Dollar appreciation. Because of this, we are buyers on dips in this pair.

EUR/CHF Technical Analysis for November 2, 2011

The EUR/CHF pair continues to sit fairly still, but drift lower as the Euro becomes less and less trusted. The Swiss have vowed to put in a “floor” in this pair at 1.20 or so, and as such, the pair simply doesn’t move much to the downside these days. Also, it shows just how unloved the Euro really is as it can’t even gain on an openly manipulated currency. The pair isn’t very tradable, at least until the Europeans get it together– which looks like a long time from now at this rate.

AUD/USD Technical Analysis for November 2, 2011

AUD/USD fell hard during the Tuesday session as traders both sold off risk assets and came to grips with the interest rate cut that the RBA did during the session. The Reserve Bank of Australia mentioned that they are in “neutral” mode, and we think that the currency will be very reluctant to move in the affirmative with the risk profile out there. The headline risks out there will continue to plague the currency, and as long as the global economy is so shaky, we continue to think selling the rallies as long as we are under the 1.05 level. Buying won’t come into play until we can break the recent highs around the 1.0750 level.

USD/CAD Technical Analysis for November 2, 2011

The USD/CADpair shot straight through the parity level on Tuesday as traders continued to embrace the “risk off” trade. The pair is highly sensitive to the risk parameters of global trading, and as such it will often rise in times of uncertainty. The parity level continues to use the parity level as a barometer of which direction you want to be in. At this point, it is looking more and more like we want to be long. The pair could be bought on pullback to the parity level that shows supportive candles in order to join the market. The breaking of the top of the daily candle on Tuesday has resistance just above in the 1.03 level, so we don’t think there is a ton of room to move to the upside from here without resistance coming into play. As the world continues to worry, this pair could rise. However, watch oil – if it rises, this pair will fall, and vice versa.

NZD/USD Technical Analysis for November 2, 2011

The NZD/USD pair fell hard on the Tuesday session as traders continue to sell off risk-related assets globally. The Kiwi will be highly sensitive to commodity markets, and as they sell off – so will it. The 0.8000 area that we find ourselves in is a massive consolidation range from before that could present itself as support. The breaking of 0.79 will send this pair much lower as this would show that the fear is still in the market. The buy side can’t be bought into until we see supportive daily candles in this area.

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