Forex Technical Analysis for October 4, 2011

EUR/USD Technical Analysis for October 4, 2011

EUR/USD continued to fall on Monday as traders worry about the Greek situation. The pair has been whacked lately as the markets continue to buy the USD against most other currencies, and as the Euro is the absolute epicentre of the crisis. The bailout funds seem to still be on the docket in general, but the reality of the situation is that anytime this pair rises, selling is by far the preferred action. Until there is an absolute solution to the debt crisis, this is a “sell only” pair, and most rallies will simply be a chance to sell the pair from higher levels. We have 1.30 as the next massive support zone to contend with.

AUD/USD Technical Analysis for October 4, 2011

AUD/USDfell apart on Monday as traders sold off risk. The global markets were rocked again, and the Aussie paid for it. The Aussie is very sensitive to economic growth as it is based off of a lot of commodity trading, so we expect this pair to continue falling. However, the 0.95 level is just below, and one can almost always expect a bit of a reaction at a large 500-pip round number. Because of this, we are waiting for a bounce from which to sell. The 0.9350 level is where we see serious longer-term support in this pair.

EUR/CHF Technical Analysis for October 4, 2011

The EUR/CHFpair continues to be “dead money” as the Swiss are willing to step in if the pair drops below the 1.20 mark. Monday saw the pair barely budge, and more of the same should be expected, unless the EU finds a solid solution to the various sovereign debt issues in the area. Until then, this pair won’t fall – but it certainly won’t rise either. We are presently ignoring this pair.

NZD/USD Technical Analysis for October 4, 2011

NZD/USDcontinued its fall on Monday as the world’s markets sold off. The “risk off” trade is back in fashion, and the Kiwi will always pay when this is the case. The commodity markets in general got whacked on Monday, and the Kiwi paid as a result. The pair is just above the 0.75 level, and we expect there to be a bounce from that level as it is a major round number, but this should only be a bounce from which to sell. The global environment remains the same for the foreseeable future, so selling rallies is probably the way to go going forward. Buying isn’t recommend as the trend is most certainly going against the Kiwi presently.

USD/JPY Technical Analysis for October 4, 2011

In the world of Forex, the Japanese Yen is probably one of the “safest” currencies out there to buy. On Monday, we have seen another round of Yen buying as traders are selling off any type of risk they can. With the world slowing down economically, this pair will continue to be pressured to the downside. However, the Bank of Japan is willing to intervene if this pair falls too quickly, so selling isn’t going to be possible at this point either. Since the USD and JPY are both “safe haven” currencies, the pair should continue to be choppy, but stay in a tight range. Since the 76 handle seems to be the floor, and the BoJ is willing to sell Yen, we like scalping from the buy side at that level for roughly 40 – 50 pips. We can’t sell – you never know if the BoJ will pull the trigger, and you don’t want to be on the wrong side of that trade!

GBP/USD Technical Analysis for October 4, 2011

The GBP/USDfell on Monday as the Dollar continued to gain against all other currencies. The cable is particularly sensitive to the problems in the EU as so much of the UK’s economy is based in the financial sector. With this in mind, we have been selling this pair on rallies. While we haven’t made a new low, it appears this will be the case soon. The 1.55 level has been broken again, so we feel the path of least resistance is still down. We sell all rallies at this point.

USD/CAD Technical Analysis for October 4, 2011

USD/CAD shot up through the 1.05 level on Monday as traders continue to sell off riskier commodity currencies. The Canadian economy is heavily dependent on the US for exports, and as long as there is a measure of fear in the markets – this pair should continue to rise. Also, the oil markets will play a large part of this pair’s movement and with it falling – the CAD loses some of its luster. We believe the pair will continue to rise, and eventually test the monumental 1.0650 monthly resistance level. We prefer buying dips at this point.

USD/CHF Technical Analysis for October 4, 2011

USD/CHFrose on Monday, showing the move into the US dollar is still reigning supreme across the Forex world. With the Swiss National Bank working against the value of the Swiss Franc, the Dollar has become the last real safe haven in the world of currencies, and as such should continue to rise in value. The upward trade makes sense as we think the “risk off” attitude should continue, and since the CHF can’t rise – this pair is a “buy on the dips” market. We believe that there is a floor of sorts in at the 0.9000 level.

 

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