Forex Technical Analysis for October 18, 2011

EUR/USD Technical Analysis for October 18, 2011

The EUR/USD pair fell hard on Monday as German Finance Ministers stated that the “solution to the EU problems aren’t going to be announced in a few short days”, which seemed to be what the market was expecting. The trend has been down, and the 50% retrace has held intact overall. The Euro continues to be plagued by indecision and high anxiety about the debt issues, and as far as we call tell – will continue to do so. The pair should be sold on rallies at this point, at least until the market makes a new high. The 1.40 level above should be massive resistance as well, should this market reach that level.

AUD/USD Technical Analysis for October 18, 2011

The AUD/USD fell on Monday as the global “risk off” trade came back in full force. With lack of risk appetite, the pair was always doomed to fall. The bounce that we saw last week was certainly overbought, and as a result this move isn’t totally unexpected. The pair slammed into the 1.03 area, and turned at that point. The area features clusters of sell orders from previous down moves, and should continue to be resistive. The fall in the AUD/USDlooks like it will continue over the longer term as well, and we like selling rallies at this point.

EUR/CHF Technical Analysis for October 18, 2011

The EUR/CHF pair continues to sit still on Monday as the market isn’t willing to test the resolve of the Swiss National Bank. The SNB has put a “floor” in on this pair at the 1.20 level, and it appears that the market is in no mood to see if it can break that level. The fact that the Euro sold off against everything else rapidly, but not the Franc shows just how tight this market really is. We only want to buy this market, as we don’t fight central banks – but aren’t seeing many reasons to buy the Euro as a whole. In the mean time, we can only watch the EUR/CHF market.

NZD/USD Technical Analysis for October 18, 2011

NZD/USDfell on Monday as traders sold off risk-related assets around the world. The 0.8000 area has held as significant resistance and this action suggests that we may see a continuation of the previous down move. The pair is highly sensitive to global risk taking, and the mood has decidedly turned a bit sour as it appears the Europeans are in no rush to get the solution to their debt issues out in front of the problem. The lack of drive will continue to weigh upon the riskier currencies, and the Kiwi dollar is no exception. We like selling rallies at this point, and would even consider a short on a break of the Monday lows.

USD/JPY Technical Analysis for October 18, 2011

USD/JPYcontinues to hover in its tight range as traders are taking advantage of extremely low volatility in the market. The Bank of Japan is willing to step into the market on the buy side if the Yen appreciates too quickly against the Dollar, and have been very public about it. Because of this, the pair has had a range between 76 and 77.50, and we feel this should continue. The trade has been very simple: Buy close to 76, and sell close to 77.50. This can be repeated until it stops working, which of course we don’t know when that is. But the truth is that this pair has been very generous with its 50 pip scalps over the last several weeks.

GBP/USD Technical Analysis for October 18, 2011

The GBP/USD pair has a bearish day on Monday, as traders reacted to statements about the lack of speed of an upcoming EU solution. This put the “risk on” trade on the back foot for the session, and this pair was no different. It should be noted that the 1.57 was once resistance, and it could step up to be support going forward. Because of this, we aren’t willing to sell until we get a daily close below that level, but until global risk slows down – it is hard to get overly bullish on any of the risk pairs, cable included.

USD/CAD Technical Analysis for October 18, 2011

The USD/CADbounced on Monday as the trading world started to shun risk assets globally. The oil markets were soft, and so were the equity markets. This sends risk assets down, and in this case – the Canadian dollar. We mentioned the parity to parity +50 level as a question to be answered. It was the site of a major breakout recently, but hadn’t been retested yet. It has as of Monday, and it shows to be supportive. Because of this, we feel the next leg in this pair is up. As long as parity holds up in this pair – we are willing to buy dips as the global outlook is still very shaking in general.

USD/CHF Technical Analysis for October 18, 2011

USD/CHF rose during the Monday session as traders continue to buy the US dollar in reaction to the lack of urgency shown by the EU in relation to the debt problems in that area. The market has gone decidedly bullish on the USD over the last 24 hours, and should see a continuation of previous Dollar positive moves. Because of this, and the fact that the Swiss National Bank is willing to intervene if the Franc appreciates too much– we only buy this pair. However, there is the 0.9000 area just above that could prove difficult. We want to see a daily close above that level before buying this pair.

 

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