Fri Apr 27 Thu Apr 26 Wed Apr 25 Tue Apr 24
1.3269/1.3156 1.3262/1.3197 1.3235/1.3173 1.3217/1.3174

Pivots: S3: 1.3044; S2: 1.3112; S1: 1.3180; P: 1.3225; R1: 1.3293; R2: 1.3337; R3: 1.3381

EUR/USD: Last week the dollar came under selling pressure, especially against USD/JPY and GBP/USD. While the EUR/USD also strengthened against the USD, the EUR actually weakened against the GPB and the JPY. This week we will focus on the EUR/USD as we are approaching some key resistance levels. First, the head and shoulders pattern with the neckline at 1.3000 is still key. A break of the neckline will cause an extended move lower for the EUR/USD. The current (2) top appears to be the second right shoulder of this pattern. Second, two trend lines have been drawn and the EUR/USD is up against both trend lines. A sustained move above 1.3300 will cause a reevaluation of the view that the EUR/USD is currently close to a turning point. Third, the Stochastics is also at a turning point and since the EUR/USD has been trading sideways since February, the Stochastics has been a good indicator for reversals at ends of swing moves during this “consolidation period”. The key US releases this week include the ISM Manufacturing report on Tuesday, and the USD Change in Non-farm Payrolls and Unemployment Rate on Friday. The Key European releases this week include the Euro-Zone Producer Price Index and the European Central Bank Rate Decision on Thursday. If these releases show a combined slowdown in the US and Europe, we may be looking at a top for the EUR/USD near current levels. If you are interested in finding out what kind of trader you are, please complete the Trader’s Scorecard at www.fxtradersedge.com and receive your results immediately!

EUR/USD Weekly Close: 1.3090 Daily High/Lows:

Fri Apr 6 Thu Apr 5 Wed Apr 4 Tue Apr 3
1.3111/1.3049 1.3163/1.3034 1.3238/1.3106 1.3366/1.3212

Pivots: S3: 1.2987; S2: 1.3021; S1: 1.3056; P: 1.3083; R1: 1.3118; R2: 1.3145; R3: 1.3173

EUR/USD: The European currencies closed the week lower amidst conflicting news releases for the US Dollar. Tuesday’s Fed Minutes prompted a selloff of the EUR/USD from the 1.3365 level as the Fed took further easing off the table. However, Friday’s weak job growth release caused some profit taking in the EUR/USD from the low price of 1.3034 to 1.3111. Already in Asia the EUR/USD has sold off to pre-Friday release prices of 1.3050 which means the EUR/USD is still weak. The 1.2975 to 1.3000 support area remains key and a move below this support should cause lower levels to be tested, where eventually 1.2627 will be retested. (the low price which occurred on January 16, 2012). The USD/JPY and all of the JPY crosses traded lower last week to further correct the move up from the week before. On the Daily charts, the Awesome Oscillator has reached the zero line which means that the minimum requirements for the wave 4 have been met. Both the USD/JPY and the EUR/JPY are close to correcting 38.2% of the previous swing move up. This bodes well for a resumption of the trend higher in both the EUR/JPY and USD/JPY pairs although more of a correction cannot be ruled out. For the EUR/USD, there are two alternate counts for the coming week. The first preference is a move back up from current levels to complete a wave 4 towards the 1.3150 level. The second is a resumption of the downtrend from current levels. If the JPY and JPY crosses show a bid early in the week, then it is likely the EUR/USD will correct higher as well before resuming its downtrend. Look at the EUR/JPY and USD/JPY for EUR/USD clues this week. If you are interested in learning Elliott Wave Analysis with a strategy that nails the waves called the Wavy Tunnel, please email me at jody@fxtradersedge.com and I will send you the information link.

EUR/USD Current Price: 1.3339 USD/JPY: 82.83 Daily High/Lows:

Fri Mar 30 Thu Mar 29 Wed Mar 28 Tue Mar 27
1.3377/1.3294 1.3346/1.3252 1.3374/1.3277 1.3386/1.3313

Pivots: S3: 1.3210; S2: 1.3253; S1: 1.3296; P: 1.3336; R1: 1.3379; R2: 1.3418; R3: 1.3458

EUR/USD: The European currencies closed the week firm with the commodity currencies weakening. The AUD/USD weakened steadily this entire month from a high of 1.0855 to current levels at 1.0450. This boded well for the EUR/AUD cross which traded to a high of 1.2900 this week from the start of the move at 1.2135 on February 7th. The EUR/CAD followed suit. This cross action has buoyed the EUR/USD to trade sideways this week but well supported. While the EUR/USD could trade a bit higher this week, a move above 1.3486 would invalidate a short position, as that would mean that price has violated the start of wave i. Once the c wave completes the current wave ii, the EUR/USD should head down again. The USD/JPY, on the other hand, spent the week correcting the previous swing move up, reaching a corrective 3-wave move down to 81.83 off the highs of 84.18 made on March 15th. The USD/JPY looks set to continue the uptrend for a wave 5 which will likely take out the previous high at 84.18. Once we complete the wave 5, we will likely see a nice corrective move for the USD/JPY since the start of this leg up at 76.00 on February 1st 2012. The theme for this week is to buy USD/JPY on dips and sell the EUR/USD once you see the EUR commodity crosses softening.

Fri Mar 9 Thu Mar 8 Wed Mar 7 Tue Mar 6
1.3276/1.3096 1.3290/1.3134 1.3163/1.3095 1.3225/1.3102

Pivots: S3: 1.2915; S2: 1.2982; S1: 1.3049; P: 1.3163; R1: 1.3230; R2: 1.3343; R3: 1.3457

EUR/USD: The European currencies closed the week flirting with the lower end of the trading range of the week. The GBP/USD, USD/CHF and the EUR/USD look set to continue with the trend for a higher dollar this week, with no noticeable moves of note in the crosses. Despite positive fundamentals last week for the EUR/USD with the strong participation on the Greek Bond Swap and ECB less dovish monetary stance at the press conference, the US Dollar reigned supreme amidst solid US data. In particular, USD/JPY closed the week higher in a bullish formation. The EUR/USD WXY 3-wave correction from the previous low at 1.2627 has likely completed at 1.3484. With solid resistance at that level, the EUR/USD spent four days retesting it and it failed each time, which is a sure sign of selling at the price. With that failure, and subsequent drop and pullback, it appears the EUR/USD is ready to resume its downtrend. Initial pivot support S1 at 1.3049 is followed by S2 at 1.2982 which is also the price low on Feb 16, 2012. On the USD/JPY, near term resistance lies at R1 82.85 and R2 83.33 with support at S1 81.67 and S2 80.97. 85.00 is a reasonable target for this pair. Watch support and resistance levels, including Fibonacci and Pivot Points for the coming week.

Fri Feb 24 Thu Feb 23 Wed Feb 22 Tue Feb 21
1.3485/1.3366 1.3377/1.3230 1.3265/1.3210 1.3292/1.3186

Pivots: S3: 1.3227; S2: 1.3305; S1: 1.3382; P: 1.3434; R1: 1.3511; R2: 1.3563; R3: 1.3614

EUR/USD: The theme of the price action last week included EURO strength and YEN weakness. During the week, the EUR/USD traded north from a low of 1.3153 on Monday, February 20th to a high of 1.3485 on Friday, February 24th for a total of 332 pips to the upside or 2.5%. The USD/JPY traded the week from a low of 79.36 made on February 20th to a high of 81.03 where it closed the week on February 24th for 2.1% gains. Yes, the Dollar lost ground against the Euro and gained ground against the Yen. That means that the EUR/JPY enjoyed the bigger move, as it rocketed from a low of 104.53 on Monday to a high of 109.07 on Friday for a 4.3% overall move. While the EUR/JPY has not shown any signs of topping yet, it is difficult to buy at these lofty heights without a correction. On the EUR/USD, having reached the 50% corrective target at 1.3436, the next level to look for is the 61.8% target at 1.3628. From the chart shown, this move is presumed to be part of a corrective pattern. Once this pattern completes, the EUR/USD should head down again. The equality target brings us to 1.3573, taking the distance of the first 600 pip swing move from 1.2627 to 1.3227 and projecting it from the beginning of the second swing move at 1.2973 on February 16, 2012. Therefore, there could be some profit taking between the equality target at 1.3573 and the next FIBO target at 1.3628. Watch support and resistance levels, including Fibonacci and Pivot Points for the coming week.

Fri Feb 10 Thu Feb 9 Wed Feb 8 Tue Feb 7
1.3290/1.3155 1.3320/1.3213 1.3287/1.3220 1.3269/1.3088

Pivots: S3: 1.3019; S2: 1.3082; S1: 1.3145; P: 1.3217; R1: 1.3280; R2: 1.3353; R3: 1.3425
EUR/USD: Over the last week, the EUR/USD traded north from a low of 1.3027 on Monday, February 6th to a high of 1.3320 on Thursday, February 9th. This occurred after the noted sideways consolidation that looked very much like a triangle continuation pattern, resolved itself in a thrust out of the triangle in the direction of the current trend which was up.This thrust out of the triangle fell short of the 1.3350 to 1.3400 target by 30 pips but the direction was right. On the fundamental side of things, the unpredictable Greek situation in light of a few upcoming austerity measure votes, should have caused risk markets to continue to gain momentum. In fact, the markets have lost momentum as illustrated by Friday’s selloff in stocks and the EUR/USD. Friday could have been position squaring ahead of the weekend or a reversal in risk trends. We don’t know yet but this week should be interesting. We have changed the count slightly on the charts to one where we see a correction from this level which could be followed by another move higher. That depends on how the move down plays out, and whether it is corrective in nature or impulsive. It also depends on how the market digests the Greek news this week which will affect the EUR/USD. For initial support, we will look towards the previous 4th wave in the vicinity of 1.3050, which is also 38.2% of the last swing move higher from 1.2627 to 1.3320. From current levels, look for a corrective move up without going above 1.3320 for a potential sell. Stops have to be placed above the highs at 1.3320. Once we hit the 1.3050 level, it remains to be seen if we break below 1.3000 followed by 1.2930 and 1.2880 or trade higher once again. A move above 1.3320 will see higher levels. Watch support and resistance levels, including Fibonacci and Pivot Points.

EUR/USD Current Price: 1.3090 Daily High/Lows:

Fri Feb 3 Thu Feb 2 Wed Feb 1 Tue Jan 31
1.3205/1.3065 1.3196/1.3084 1.3218/1.3025 1.3212/1.3045

Pivots: S3: 1.2926; S2: 1.2998; S1: 1.3071; P: 1.3138; R1: 1.3210; R2: 1.3277; R3: 1.3344

EUR/USD: Over the last week, the EUR/USD has been sidelined, trading in a range between 1.3025 and 1.3225. The trading range environment put a halt to the upward momentum the EUR/USD had the preceding two weeks. This sideways consolidation looks very much like a triangle continuation pattern, which typically resolves itself in a thrust out of the triangle in the direction of the current trend. Since the current trend is up, a thrust out of this triangle could occur this week and would put the EUR/USD at higher than current levels before turning back down again. A move up would complete the wave iv abc pattern that is playing out seen on the 4-hour chart. If we measure the height of the triangle at 200 pips, that would project a move up for the EUR/USD to approximately 1.3350 to 1.3400. Looking at the FIBO targets, the 38.2% FIBO retracement from the high of 1.4245 on October 27, 2011 to the low of 1.2627 on January 16, 2012 brings us to 1.3248 followed by the 50% retracement at 1.3440. The triangle target would coincide with a FIBO move of between 38.2% and 50%. On the downside, watch S1 at 1.3071 and the supporting trend line which now comes in at about 1.3050. That level remains key support, and if broken, the 1.2930 will garner support followed by 1.2880. Day trading is still in order, rather than taking a strong view at this time on the daily charts.

The EURO Pairs Rebound Jan 22, 2012
EUR/USD Current Price: 1.2930 Daily High/Lows:
Fri Jan 20 Thu Jan 19 Wed Jan 18 Tue Jan 17
1.2985/1.2886 1.2970/1.2838 1.2867/1.2733 1.2808/1.2648

Pivots: S3: 1.2706; S2: 1.2793; S1: 1.2879; P: 1.2925; R1: 1.3011; R2: 1.3056; R3: 1.3102

EUR/USD: The EUR/USD made a new low by only 4 pips at the start of the week on Monday, January 16, 2012 before the major correction started. The aforementioned targets between 1.2500 and 1.2650 were met and staunchly held. The EUR/USD wasn’t even able to test the 1.2500 big figure before reversing. Last week we noted that 1.3076 was the key level to watch and it still stands, as a move above that level will mean more than a 100% correction of the last swing move, which would almost signal a change in the major trend. Therefore, shorts held against that level on the daily chart are still in order. Now that we’ve had such a major correction, I’d like to highlight some of the EURO pairs which might provide direction for the coming week. The EUR/GBP and EUR/JPY are in sync with the EUR/USD, as all three pairs have corrected the last swing move by 38.2%, with the EUR/USD and the EUR/JPY meeting psychological resistance at 1.3000 and 100 respectively. The commodity pairs, namely the EUR/CAD and the EUR/AUD, however, have only corrected the last swing move by 23.6%. They also lagged by one day, meaning that the other Euro pairs started the rebound a day earlier than the commodity pairs. In fact, of all the pairs, the EUR/GBP and the EUR/AUD gave back half of the gains made by the end of the week, signifying weakness. The EUR/CHF attempted the 23.6% area but closed the week at the market lows. While it is not clear if this consolidation is completely over yet, we have not violated the downtrend in any of these pairs and the sustainability of the Euro rebound is suspect. With these Euro pairs, continue to monitor the Fibonacci resistance levels for a move above the 23.6% will target the 38.2% and a move above the 38.2% will target the 50%. In the case of the EUR/USD, the 1.3076 level is key, and that also happens to be close to the 50% FIBO level.