Friday, July 1, 2011

Forex Daily Technical Analysis

07/01/2011

Stocks rose yesterday on the background of encouraging news from Greece. The S&P 500 has made the expected movement since the break-up of 1300 and now it is close to the resistance at 1320.

All of the directional indicators are calling for overbought in the US markets, but the current momentum is stronger than any technical indicator so do not count on aggressive correction.

USD/JPY

The Yen broke few days ago the resistance of the descending trend line. Sunbird's chief analyst wrote then that as long as the price remained under 81.0, the signal would be for declines. The Yen did not succeed in overcoming that resistance so far, so it is possible that it will turn down again soon. The trend line now supports the USD as yesterday's candlestick left a long shadow from its body. If the USD crosses above 81.30, there will be a good chance for strengthening. However, the Yen is much stronger currency and a break-down of yesterday's low might cause declines again.

EUR/AUD

The Australian currency has made an impressive reversal in the daily, and so did the EUR that is driven by Wall Street rising. The strengthening of these two currencies makes is it difficult to determine a direction in this pair. In fact it has been stamping for two months. A triangle pattern appears in the daily chart and the EUR is supported by the lower edge. The price might move towards the upper edge at 1.3670 before it turns over again. This pattern will be completed around the levels of 1.35-1.36 where the buyers and sellers will meet.

Gold

The gold has failed to break through the annual picks and the sellers decided to throw their positions back to the market at the moment they had understood that gold was going down. The gold broke the lower boundary of the channel at 1510$ and made a reversal pattern at 1500$ per ounce. If the price sharply slides below that support, it will have a free road to 1450$. However, if the buyers decide to go in again, they will have to cross above the resistance of the channel. The most important thing one should remember about the gold is that it does not always act according to the classic technical analysis principles, and it might rise up again without any warning.


by SunbirdFX