E/U is currently difficult to anticipate because of many reasons.
Price is imprisoned in 4 ranges:
- The first range is the line of and the support line. Two lines shape a . Price converges in this . It tries to enter the last week but unsuccessful.
-The second range is 38.2% Fib line and 50% Fib line.
-The third range is between Kijun Sen and Tenkan Sen. Kijun Sen is and Tenkan Sen is , you can see on the chart.
- The fourth range is . Price once lies in the cloud, is very hard to predict. It fluctuates very strong and tries to escape the cloud It looks like the plane is in the typhoon. You can see the fluctuation of E/U in the chart.
It's hard to anticipate the direction of price when it is captured in those ranges.
I don't know how to open the trade in this moment.
If you try to open a trade now, be careful. Very careful.
I choose the solution is waiting. I am waiting until EU economic data is released,and price escapes from at least one of above ranges.
This week, I concentrate in following events:
- Unemployent Rate of Germany.
- CPI of Germany.
Both are released on Thursday.
Recent economic data of Germany is very positive. Germany economy is very stable opposite the rest of EZ. While ECB has to lower interest rate to support their weak economy and deflation, Germany economy grows very well. I think Unemplyment rate and CPI of Germany will be positive for E/Z, which means raise up E/U.
But don' forget Consumer Confindence and Business Climate data of EZ are also released the same day, and I think it's negative for E/U
Positive data of Germany and Negative data of EZ. It's hard to open a trade with such opposite infomation.
If Positive data of Germany accompany with positive data of EZ.E/U will rises up to 1.365 level.
If negative data of Germany accompany with negative data of EZ. E/U will fall down to 1.342 level.
In my opinion, I believe in positive data of Germany and Negative data of EZ, and everything is solved on Friday when CPI of EZ is announced.
The reason why ECB lowered the interest rate is the fear of deflation despite they avoided to talk about deflation. If CPI of EZ is lower than expect, the ghost of deflation is gradually more visible. And E/U pair will fall sharply to 1.33 key .
The last one , the amount of LONG position of E/U pair is now reducing, and the SHORT position amount is increasing. Investors gradually abandon LONG position. They choose SHORT position for E/U.
But don't forget economic data of USA. Consumer Confidence and Durable Good Orders.
In USA, traders should not forget four things:
- US stocks rally greatly due to QE3. http://www.marketwatch.com/investing/index/DJIA/charts?chartType=interactive&countryCode=US
- Today Nasdaq broke 4000 level. http://www.marketwatch.com/story/putting-nasdaq-4000-in-perspective-2013-11-25
- Dollar Index has tendency higher. The US dollar is being stronger. http://www.marketwatch.com/investing/Index/DXY
-US 10 years T-Bond is being higher. http://www.marketwatch.com/investing/Bond/TMUBMUSD10Y?countrycode=BX
Those data prove that investor is buying dollar to invest T-Bond and Stock.This will drag the Greenback higher cause the pressure on E/U to fall down.
In my opinion, I think E/U will sell off to 1.33 level. .
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Forex spot: EUR/USD USD/JPY GBP/USD USD/CHF
Spot 0704 GMT 1.3530 101.56 1.6151 0.9110
3 Day Trend Range Bullish Bearish Bearish
Weekly Trend Bearish Bullish Range Bullish
200 day ma 1.3298 96.54 1.5731 0.9253
3rd Resistance 1.3612 102.52 1.6239 0.9179
2nd Resistance 1.3584 101.91 1.6215 0.9150
1st Resistance 1.3561 101.75 1.6189 0.9131
Pivot* 1.3523 101.58 1.6176 0.9104
1st Support 1.3513 101.33 1.6120 0.9094
2nd Support 1.3490 101.14 1.6055 0.9061
3rd Support 1.3477 100.95 1.6000 0.9021
Intraday EUR/USD: Monday's inside day suggests another challenge on last week's high at 1.3584 should be expected. Last Thursday's strong recovery from 1.3399 has resistance at 1.3561 blocking the path to the 1.3584 high, and EUR bears are expected to defend the 1.3584 high resolutely, because an upside break would create additional risk to 1.3612 and 1.3655. Failure to keep Monday's low at 1.3490 and support at 1.3477 intact would create additional downside risk to 1.3444 and 1.3424, leaving the 1.3399 low vulnerable.
Weekly chart EUR/USD trend: Bearish.
Intraday USD/JPY: The downside consolidation phase beneath Monday's near seven-month highs at 101.91 has limited risk to 100.95. Keeping Monday's low at 101.14 intact would prompt a recovery above 101.75 and bring the 101.91 high back into the immediate picture, and the completed bull pennant continuation pattern in mid-November has helped to generate a minimum upside requirement target at 103.43. Resistance at 102.52 lies on the path to 103.43 and the 2013 peak at 103.74.
Weekly chart USD/JPY trend: Bullish.
Intraday GBP/USD: Another rejection of the early October highs at 1.6256/59 occurred on Monday, which is putting pressure on support at 1.6120. Monday's sharp setback from 1.6239 left a bearish outside day and bearish engulfing candle, and a break below 1.6120 would bring the mid-way point of the seven-week 1.5855/1.6259 range back into focus, which defends the 1.60 level. A recovery above 1.6189 would provide respite, but only above 1.6215 would re-open Monday's high at 1.6239.
Weekly chart GBP/USD trend: Range.
Intraday USD/CHF: Monday's recovery from a four-week low at 0.9061 needs to break above projected resistance at 0.9179, if it is to be taken seriously. But Monday's high at 0.9131 and resistance at 0.9150 suggests 0.9179 has adequate protection. The powerful decline from the Nov. 7 peak at 0.9251 left a lower high at 0.9195 last week, generating a minimum downside requirement target at 0.9021 that would become achievable on a break below 0.9061. Additional downside risk to 0.8975 would then be threatened.
Weekly chart USD/CHF trend: Bullish.
Forex spot: EUR/GBP EUR/JPY EUR/CHF AUD/USD
Spot 0704 GMT 0.8377 137.40 1.2323 0.9186
3 Day Trend Range Bullish Bullish Bearish
Weekly Trend Range Bullish Range Bearish
200 day ma 0.8455 128.36 1.2299 0.9590
3rd Resistance 0.8462 138.49 1.2376 0.9281
2nd Resistance 0.8446 137.98 1.2351 0.9255
1st Resistance 0.8414 137.72 1.2342 0.9220
Pivot* 0.8362 137.48 1.2314 0.9157
1st Support 0.8342 137.03 1.2305 0.9155
2nd Support 0.8317 136.55 1.2283 0.9119
3rd Support 0.8301 135.95 1.2263 0.9074
Intraday EUR/GBP: The upward breach of 0.8372 during Tuesday's Asian session signals room for further gains to the Nov. 20 lower high at 0.8414. Last Friday's low at 0.8317 has been strengthened by the 0.8372 breach, suggesting the three-week bearish continuation pattern between 0.8301 and 0.8462 has room to extend time-wise. The projected resistance line of a bear pennant lies at 0.8446. Only a break below Monday's low at 0.8342 would bring the 0.8301/17 lows back into the immediate picture.
Weekly chart EUR/GBP trend: Range.
Intraday EUR/JPY: The corrective setback from Monday's four-year high at 137.98 has maximum downside risk to 136.55. The double-bottom base on the weekly chart continues to dominate the weekly chart, and a recovery above 137.72 would bring the 137.98 high back into the immediate picture, opening 138.49 and the June 2009 peak at 139.26 in the coming sessions. The double-bottom measured upside objective lands just beneath the 140 level at 139.89. Loss of 136.55 would create additional corrective downside risk to 135.95.
Weekly chart EUR/JPY trend: Bullish.
Intraday EUR/CHF: Monday's strength recaptures the 1.23 level, to bring the Nov. 15 reaction high at 1.2351 within striking distance. Keeping support at 1.2283 intact may be part of a pending double-bottom base pattern on the daily chart, although a break above 1.2351 is required to complete the reversal pattern, generating a measured upside objective at 1.2419. Support at 1.2305 would have to be broken in order to leave the 1.2283/85 lows vulnerable.
Weekly chart EUR/CHF trend: Range.
Intraday AUD/USD: The corrective recovery from Monday's eleven-week low at 0.9119 will struggle while projected resistance at 0.9299 caps the upside. Layers of resistance at 0.9220 and 0.9255 litter the upside path, as well as single print resistance at 0.9281 on last week's Market Profile chart. A breakdown below support at 0.9155 would be the catalyst for a return to the 0.9119 low, and last week's AUD weakness generated a minimum downside requirement target at 0.8960.
Weekly chart AUD/USD trend: Bearish.
* The pivot is the sum of the high, low and close divided by 3.
For more technical analysis see: Dow Jones Newswires, N/DJTA; Bloomberg, NI DJTA; and Reuters key word search "INSI-DJN"
By Francis Bray; Dow Jones Newswires; +44 (0)207 842 9249; firstname.lastname@example.org
Francis Bray is Dow Jones' chief technical analyst for Europe, and has worked as a technical analyst and trader for 20 years in London, Barcelona and Guernsey.
Data provided by CQG International Ltd.
This is a financial news and information service. It is provided in general terms and does not take account of or address any individual user's position. To the extent that this article includes suggestions as to various possible investment strategies which users might consider, it does so in only general terms without reference to the personal factors which should determine any user's investment decisions. Nothing contained in this service constitutes personalized investment advice. Dow Jones does not warrant the accuracy, completeness or timeliness of the information in this article, and any errors shall not be made the basis for any claim against Dow Jones. The author does not invest in the instruments or markets cited in this article. This article does not constitute or form part of any invitation or inducement to buy or sell any security.
(END) Dow Jones Newswires
November 26, 2013 02:18 ET (07:18 GMT)2013 Dow Jones & Company, Inc.