Weekly Forex Play April 8, 2012


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

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

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