SINGAPORE (Dow Jones)–The following is a technical analysis of seven major currency pairs for this week:
USD/JPY
1st support – 91.92 (minor)
1st resistance – 93.40 (minor)
2nd support – 91.72 (moderate)
2nd resistance – 94.16 (minor)
USD/JPY (last 93.00) is likely to trade with risks skewed higher this week after the pair on Friday broke above the downtrend resistance line from the Aug. 10 high of 97.72, coming in now at 92.46, while the slow stochastic measure has turned bullish at the oversold level. Resistance is at 93.40, the previous base set on Aug. 21; a breach would expose the upside to 94.16, the 38.2% Fibonacci correction of the decline from the Aug. 7 high of 97.78 to Thursday’s low at 91.92, and then to the 200-day moving average, coming in now at 94.76 and not far below the 50% correction level at 94.85. An extension of the rise would target the Aug. 24 reaction high of 95.06 and the Aug. 18 reaction high of 95.28. Support is at 91.92, and then at the July 13 trough of 91.72; a breach would expose downside to the Feb. 11 reaction low of 89.68. USD/JPY is likely to stay rangebound between 91.72 and the April 6 high of 101.45 in the medium term. But a fall below 91.72 would expose the downside to the Dec. 17, 2008 and Jan. 21, 2009 lows of 87.11.
EUR/USD
1st support – 1.4175 (minor)
1st resistance – 1.4348 (minor)
2nd support – 1.4044 (moderate)
2nd resistance – 1.4404 (minor)
EUR/USD (last 1.4322) is likely to stay rangebound this week. The daily chart is mixed as the stochastic measure is bullish, but the MACD indicator is in bearish mode, while the five- and 15-day moving averages are meandering sideways. Resistance is at Thursday’s high of 1.4348; a breach would target the Aug. 27 reaction high of 1.4404 and the Aug. 5 reaction high of 1.4446. A rise above the latter level would expose the upside to 1.4719, the Dec. 18 top. Support is at Tuesday’s reaction low of 1.4175, which is near the 55-day moving average; a breach would expose the downside to the Aug. 17 reaction low of 1.4044, and then to the July 30 reaction low of 1.4005. EUR/USD medium-term outlook remains consolidative as long as the pair stays below 1.4446. A sustained rise above 1.4446 would reinstate the positive medium-term bias, paving the way to 1.4719, and then to the Sept. 22, 2008 reaction high of 1.4865 in coming weeks.
AUD/USD
1st support – 0.8477 (minor)
1st resistance – 0.8587 (minor)
2nd support – 0.8386 (minor)
2nd resistance – 0.8813 (moderate)
AUD/USD (last 0.8515) is likely to consolidate with a bullish bias this week after hitting a one-year high of 0.8537 this morning. The daily stochastic measure is bullish, and the MACD line is staging a bullish crossover against its exponential moving average. Resistance lies on the uptrend line from the June 3 high of 0.8263, coming in now at 0.8587; a breach would expose the upside to the Aug. 21, 2008 reaction high of 0.8813. Support is at 0.8477, the previous cap set on Aug. 14; a breach would expose the downside to Friday’s low of 0.8386, and then to Wednesday’s reaction low at 0.8237. AUD/USD medium-term outlook is positive as the five- and 15-week moving averages are rising, and the weekly MACD and stochastic indicators are bullish, although the latter is at the overbought level. Friday’s breach of the resistance at the Sept. 22, 2008 reaction high of 0.8519 has paved the way for the spot rate to advance to 0.8942, the 76.4% Fibonacci retracement level of the decline from the July 15, 2008 high of 0.9849 to the Oct. 27, 2008 low of 0.6004, in coming weeks.
NZD/USD
1st support – 0.6682 (minor)
1st resistance – 0.6898 (moderate)
2nd support – 0.6639 (minor)
2nd resistance – 0.6951 (strong)
NZD/USD (last 0.6885) is likely to consolidate with risks skewed higher this week. The slow stochastic measure is in bullish mode, and a bullish parabolic stop-and-reverse signal was hit at 0.6879 on Friday. Resistance is at the Aug. 25 high of 0.6898; a breach would target the Sept. 22, 2008 reaction high of 0.6951. Support is at Wednesday’s reaction low of 0.6682; a breach would turn the near-term bias negative, exposing the downside to the Aug. 17 reaction low of 0.6639, and then to the Aug. 12 reaction low of 0.6594, which is currently near the 55-day moving average. NZD/USD medium-term outlook is positive as the five- and 15-week moving averages are rising, and the weekly MACD and stochastic indicators are bullish, although the latter is at the overbought level. A rise above the Sept. 22, 2008 reaction high of 0.6951, which roughly coincides with the 61.8% Fibonacci retracement of the decline from the March 14, 2008 high of 0.8213 to the March 4, 2009 low of 0.4890, would expose the upside to the Aug. 21, 2008 reaction high of 0.7216, and then to 0.7429, the 76.4% retracement level, in coming weeks.
GBP/USD
1st support – 1.6285 (minor)
1st resistance – 1.6440 (minor)
2nd support – 1.6110 (minor)
2nd resistance – 1.6622 (minor)
GBP/USD (last 1.6400) is likely to consolidate with risks skewed higher this week. The spot rate on Wednesday broke above the downtrend resistance line from the Aug. 6 high of 1.7029, and the slow stochastic measure is rising from the oversold level, while the MACD line looks poised to stage a bullish crossover against its exponential moving average. Resistance lies on the 55-day moving average, coming in now at 1.6440; a breach would expose the upside to 1.6622, the Aug. 21 reaction high, and then to the Aug. 13 reaction high of 1.6664. An extension of the rise would target the Aug. 5 top at 1.7042. Support is at Friday’s low of 1.6285; a breach would expose the downside to Tuesday’s reaction low of 1.6110, and then to the 100-day moving average, coming in now at 1.6076. An extension of the fall would target the July 8 reaction low of 1.5982, and the June 8 reaction low of 1.5799. GBP/USD positive medium-term outlook is under threat as the five-week moving average’s rise has stalled, and the weekly stochastic is now falling from the overbought level. The currency pair may consolidate between 1.5799 and 1.7042 over the next few weeks.
USD/CHF
1st support – 1.0523 (minor)
1st resistance – 1.0714 (minor)
2nd support – 1.0367 (strong)
2nd resistance – 1.0734 (minor)
USD/CHF (last 1.0596) is likely to continue consolidating this week as long as the pair stays above the Aug. 27 low of 1.0523. The daily slow stochastic measure is bearish, but the MACD indicator is neutral, while the five- and 15-day moving averages are meandering sideways. A fall below 1.0523 would reinstate the near-term negative bias, exposing the downside to 1.0367, the Dec. 29, 2008 trough. Resistance is at the Aug. 26 high of 1.0714; a breach would turn the near-term bias bullish, targeting the 55-day moving average, coming in now at 1.0734, and then the Aug. 17 reaction high of 1.0833. An extension of the rise would target the 100-day moving average, coming in now at 1.0872 and not far below the Aug. 10 reaction high of 1.0883. USD/CHF medium-term outlook is negative as the weekly MACD indicator is bearish, and the five- and 15-week moving averages are falling, while the weekly stochastic measure stays suppressed at the oversold level. The currency pair may target 1.0367, and then the July 15, 2008 reaction low of 1.0009, which is just above the psychological 1.0000 level, in coming weeks. An extension of the fall would target the record low of 0.9572 hit on March 17, 2008.
USD/CAD
1st support – 1.0717 (minor)
1st resistance – 1.1124 (minor)
2nd support – 1.0630 (moderate)
2nd resistance – 1.1177 (minor)
USD/CAD (last 1.0852) is likely to continue trading sideways this week between the Aug. 25 reaction low of 1.0717 and the Aug. 17 reaction high of 1.1124. The daily chart is mixed as the stochastic measure is bearish, but the MACD indicator is still in bullish mode, while the five- and 15 day moving averages are meandering sideways. A rise above 1.1124 would target 1.1177, the 50% Fibonacci correction of the decline from the July 8 high of 1.1724 to the Aug. 4 low of 1.0630. An extension of the rise would target the 100-day moving average, coming in now at 1.1284, and the 61.8% correction level at 1.1306. But a fall below 1.0717 would target the Aug. 4 reaction low of 1.0630. USD/CAD is likely to consolidate over the next few weeks as long as the pair stays above 1.0630. The weekly MACD indicator is bearish, but the weekly stochastic measure is bullish near the oversold level. A sustained drop below the 1.0630 support would suggest a resumption of the negative medium-term trend, targeting the Sept. 25, 2008 reaction low of 1.0296, and then the July 15, 2008 reaction low of 0.9972 in coming weeks.
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