Monday, June 20, 2011

Daily Forex Technical Analysis - June 20, 2011

For the first time in 6 weeks, Wall Street closed in the green territory. Indices were struggling to rise up because of RIM's crash that pulled down the tech sector. At the end of the day, Nasdaq was down by 0.36%, whereas Dow and S&P 500 rose 0.30%.

As we had estimated here 2 weeks ago, the S&P 500 reached the support at 1250 points and the buyers showed up there. If the correction continues it might hit 1300, however, a break-down of Friday's low would be a bad signal for the US stock markets.

Investors will wait for Bernanke's press conference on Wednesday, right after the interest rate announcement, which is expected to remain under 0.25%.


The Euro corrected up as we had expected it to do, following the correction on Wall Street. The trigger was at 1.4230 and target was set at 1.437-1.44, which the Euro almost reached. That emphasizes the importance of realizing the correlation between the different markets and the timing of a trade.

The correction got a resistance at Fibonacci 62% level, and the reversal should occur around these levels from the technical point of view. However, Friday's momentum might not be over yet.


The descending triangle, which we have been watching for several weeks, is about to be completed. The Yen acts perfectly in technical terms by turning over each time it touches the trend line. It failed to break-down at 80.0 in the past 2 weeks, so a successful break-down now might take the price down to the support at 79.5. In this case, the way to the 76.0 will be wide open, and it would be just a matter of where and when the short holders would take profits.


This pair appears in the daily/weekly analysis each time it gets close to the support at 84.30. Affected by the USD/JPY, this pair is also about to complete a descending triangle pattern in the daily chart. The current support seems to be powerful as evidence is the shadows that lean on it.

 The 200 SMA will support the price if it gets to at 83.3. Many automatic orders will be triggered if the break-down occurs, but you have to watch out from a false-break.

The RBA monetary policy meeting minutes, which will be published on Tuesday morning, will probably have some impact on the Australian against most of the currencies, including AUD/JPY.

Analysis from Sunbird