Forex Technical Analysis for October 6, 2011

EUR/USD Technical Analysis for October 6, 2011

EUR/USDcontinued to bounce slightly on Wednesday as traders are willing to take a bit more risk at this point. The behind the scenes situation in the EU suggests that there is some kind of coordinated action to recapitalize the banks in that region, and this will help spirits in this market. However, the recent bounce is quite small when looking at the overall downtrend, and as such – we see this as an opportunity to sell from higher levels. We like selling rallies, and are waiting to see a resistive candle from which to short.

AUD/USD Technical Analysis for October 6, 2011

AUD/USDrose on Wednesday as traders piled into the “risk on” trade. The rumours out of the EU suggest that the various countries may be working on a coordinated effort to recapitalize the banks, and that it could be coming soon. The ADP employment numbers suggested that perhaps the Non-Farm Payroll numbers on Friday should be a bit more robust than thought previously. However, it should be noted that most of this is simply rumour, and more than likely short covering rather than massive buying at this point. Until Friday’s employment number comes out this pair will be suspect on rallies.

EUR/CHF Technical Analysis for October 6, 2011

EUR/CHFrose again on Wednesday as traders continue to buy the Euro over the last 48 hours in the hope that a coordinated action could help with the banking issues in that area. The Swiss National Bank is working against a rising Franc, so there is only one direction we can go in this pair – and that’s to buy it. However, with the overall picture in Europe still very poor, we don’t like buying the Euro just yet. In the mean time, we are willing to pass on trades in this pair.

NZD/USD Technical Analysis for October 6, 2011

NZD/USDrose on Wednesday as the commodity markets bounced a bit. The Kiwi dollar is highly sensitive to the global risk profile, and as a result – we don’t like buying it at this point. Yes, it is true the bounce is impressive and solid – but when looking at it in the overall context of the chart, it is simply a bounce at this point. There are far too many potential negative headlines in the marketplace to get overly bullish of the Kiwi at this point in time. We still prefer to sell rallies, especially ones that are showing weaker candles after a run up.

USD/JPY Technical Analysis for October 6, 2011

USD/JPYcontinues to bounce around in a very tight range as traders can only scalp it at this point. Wednesday was no different, and we still continue to think that buying this pair at the 76 handle is the way to go overall. We don’t sell – the Bank of Japan has recently intervened in this pair, and will probably do it again if the Yen appreciates too quickly. Because of the pressure to the downside – we are content to buy this pair at 76 or so, and close out at a 40 to 50 pip gain.

GBP/USD Technical Analysis for October 6, 2011

GBP/USDhad a fairly quiet day on Wednesday as traders continue to bounce around the current level, just under the 1.55 mark. The pair is most certainly bearish at this point, and it is probably oversold as well. Because of this, we are waiting for a rally from which to sell this pair as it is highly sensitive to the global economy. If the picture gets worse, this pair will fall hard. We like selling rallies on the daily chart and with red or resistive candles at this point.

USD/CAD Technical Analysis for October 6, 2011

USD/CAD broke below the shooting star that we discussed yesterday on Wednesday. As a result, a “perfect” sell signal was triggered. We understand that the 1.0650 area is a massive monthly resistance area, so shorting from here would normally be a good idea. However, we also see the 1.03 area as a potential reentry from the long side as well. The fundamentals for the global economy simply aren’t strong, and as a result – oil should continue to struggle over the longer-term. The pair should be thought of as a “buy on the dips” pair at this point, and we would be willing to buy at the 1.03 level with supportive candles.

USD/CHF Technical Analysis for October 6, 2011

USD/CHF rose on Wednesday as traders continue to sell off the Franc. With the Swiss National Bank willing to sell it as well– this makes sense. Also, in times of concern, the Franc can no longer be thought of as a “safe haven” currency, and as a result – this pair can only be bought at this point. We continue to like buying the dips, and we feel that the 0.9000 level should continue to be a bit of a floor at this point.

 

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