FX Technical Analysis

Daily Forex Technicals | Written by Mizuho Corporate Bank | May 05 09 06:32 GMT |

EURUSD Comment: Rallying from the top of the 'cloud' and a weekly close above the top of the 'flag' have turned momentum bullish. Similar patterns can be seen in a series of major currencies suggesting generalised US dollar weakness this month, probably a lot longer than that. Strategy: Buy at 1.3365, adding to 1.3260; stop well below 1.3190. Add to longs on a sustained break above 1.3450 for 1.3575/1.3600 and more further out. Direction of Trade: →↗ Chart Levels: Support Resistance 1.3357 " 1.3439 1.33 1.35 1.326 1.352 1.3190* 1.3582* 1.3145 1.365 GBPUSD Comment: The strongest weekly close since early January but under the psychological 1.5000 area. Other currencies are doing something similar and bullish momentum has increased. Futures positions are less than half of 2007's peak suggesting many are looking in the wrong direction. Expect another squeeze higher this week and maybe all month. Strategy: Buy at 1.5000; stop below 1.4500. Add to longs on a sustained break above 1.5075 for 1.5375 short term and then 1.5725/1.5800 Direction of Trade: →↗ Chart Levels: Support Resistance 1.4983 " 1.5049/1.5069* 1.49 1.5165 1.4835 1.5285 1.47 1.5375* 1.4500* 1.5535 USDJPY Comment: Golden week holiday in Japan as the Yen weakens against most currencies. It appears to be stalling around the 99.00 area as it did in February and March. Moving averages suggest a short, though prices have rallied well from the top of the 'cloud', so conflicting messages and we may end up trading between 96.00 and 99.00 for longer than we had originally thought. Strategy: Attempt shorts at 98.80; stop above 99.85. Short term target 97.65, maybe 97.15 Direction of Trade: → Chart Levels: Support Resistance 98.61/98.52 " 98.98 97.9 99.57/99.69* 97.15 99.77 96.00* 100 95.63* 100.74 EURJPY Comment: Trading back up to March's highs and a few Yen crosses are at their highest levels so far this year. Note though that moving averages suggest a short while the 'clouds' a long, so still mixed signals. We feel the latest move might stall around the 133.00 area for a small retreat. Strategy: Possibly attempt tiny shorts at 132.20; stop above 133.65. Cover shorts between 130.03 and 128.85 Direction of Trade: → Chart Levels: Support Resistance 131.86 " 132.77/132.89 131.35 133.5 130.9 134 130.3 134.33/134.50* 128.85 135.5 Mizuho Corporate Bank Disclaimer The information contained in this paper is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.