Wednesday, July 20, 2011

Daily Technical Analysis EUR/NOK NZD/CAD CAC40 NASDAQ

20/07/2011 NASDAQ
The positive sentiments across the markets are still being maintained and could very well develop into a wave of price increases the like of which we haven't seen since the beginning of the year when the markets entered a period of technical corrections. The analysis of the Elliot waves shows us that about a year ago the market experienced a very similar correction when the first wave ended and began the second wave. Similarly, the present correction could very well turn out to be the end of the fourth wave just before the start of the fifth and final wave.

The accompanying Fibonacci analysis sees the resistance level of 2720 and 3015 dollar as potentially strong target prices. At the same time, it is worthwhile taking into serious consideration the important resistance level of 2455 dollars that will be used as a test level for the index and the start of a new wave of increases and the end of the horizontal shuffling pattern. A weekly closure above the test level at 2455 will confirm, once and for all, the continued movement upwards and could be used as the trigger for a buy position with medium – long term movement expectations.

20/07/2011 CAC40

Since the French index does, in many respects, reflect the weakness of the euro block which has been experiencing a debt crisis for over a year, it is traded at very low levels in comparison with its larger friends of Wall Street. At the same time, the French CAC still has a long way to rise from the very low levels it has experienced recently. From the technical point of view, when we look at the weekly graph for the CAC, we can see a very interesting buy opportunity after the index returned to examine the strength of the strong support level at 3700 euro for the third time in six months.

Also, we can see the reverse harmonic pattern (BULLISH GARTLEY) that appeared some time ago and that supports a reversal in the index's direction and a move towards increasing rates. If we add to this the positive atmosphere coming from the financial markets over the past few days, then we have an opportunity to buy the French index at a relatively low price and close to the significant support level. The medium to long term price target can be found relative to the high resistance level of 4300 euro. A weekly closure beneath the critical support level at around 3690 will be the signal for an immediate exit from a position.

20/07/2011 EUR/NOK

The Norwegian krone represents a country that enjoys an excellent economic state in comparison with many other countries in the block, not to mention the five "big problems" facing Europe – Greece, Portugal, Ireland, Italy and Spain. Additionally, there is an interest rate difference of over one percent in favor of the Norwegian krone which makes for a very real incentive for the movement of capital from the euro block in the direction of Norway. This is also how the central tend for the euro – krone pair appears – in a fall since the start of the global recovery at the beginning of 2009.

The pair's purely technical picture is signaling a strong opportunity for an entry to a short position following the rare flirtation of the pair with the 200 day moving average line that proved to be well above the reliable resistance level which succeeded in stopping and reversing the pair's direction on five separate occasions' over the past six months. The forecast is that the euro – krone is ripe for a sharp wave of drops that will release the pair from the oppressive shuffling pattern that has led it for the past two months. We would point out that the long term price target is at around the important support level of 7.32 krone to the euro.

20/07/2011 NZD/CAD

The New Zealand dollar – Canadian dollar pair continues to stretch its limits as it come closer to the last resistance level that defines the huge shuffling range for the pair, a shuffling pattern that results from the pair's weekly graph. Effectively, the pair has two strong resistance levels and each one could signal the end of present rises and the move to a new wave of decreases.

As a result, we can use these two levels as a trigger for an entry into a short position. Present price levels are sufficiently close to the resistance level of 0.8150 so we can place our first sales portion now and increase by a further portion in the event that the upwards direction continues towards the last resistance level of 0.8250. We would point out that a closure above the level of 0.8300 will be used as a warning for an immediate realization of a sell position. The forecast for the fall is to the low support level of 0.7200 for the medium to long term.

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