by E-Forex Team

EURUSD

The Euro got a boost on yesterday, clearing the fib resistance into the 1.3015 zone, trading as high as 1.3070 earlier today. Next resistance is eyed at 1.3090, formed by the 61.8% retracement of the 1.3330-1.2707 move. Above the said resistance, the rally may extend towards key near-term barrier at 1.3330. Daily sentiment is slightly bullish due to yesterday’s rally of 250 points and the break above 1.3000/15. While support at 1.2950 holds, the upside will be favored. Current quote is 1.2995 @07:45 GMT

Support levels: 1.3000, 1.2950, 1.2900 and 1.2850.
Resistance levels: 1.3090, 1.3170 and 1.3330.
Market sentiment: long-term : bearish, mid-term : bearish, short-term : slightly bullish

AUDUSD

Interim support is being penetrated at .6400/15, suggesting that yesterday’s rally was corrective. The daily momentum is bearish and the Aussie has yet to overcome the .6535 resistance in order to confirm the rebound. Hourly charts are bearish at the time of this report. A sustained break below .6360 may encourage a drop towards yesterday’s low at .6300 and below. Current quote is .6391 @07:35 GMT

Support levels: .6350/60, .6300, .6230 and .6150.
Resistance levels: 6415, .6450, .6535 and .6570.
Market sentiment: long-term : bearish, mid-term : bearish , short-term : bearish

EURCHF

The consolidation continues into a narrow range between support at 1.4815 and resistance at 1.4970. A sustained break on either side is needed in order to provide some clues about next objectives. Above 1.4970, next barriers are eyed at 1.5030 and 1.5100, 1.5170. Below 1.4815, support is also emerging at 1.4750 and 1.4655. Current quote is 1.4896 @07:35 GMT

Support levels: 1.4800/15,1.4750 and 1.4655.
Resistance levels: 1.4970, 1.5030 and 1.5100.
Market sentiment: long-term : bearish, mid-term : bearish, short-term : neutral

The round numbers are very strong support and resistance levels for USDJPY. When I sell near round number I open position a few pips (3 to 5) below the level.

Did you see the yesterday’s false breakout above 1.2900. It was a combination of previous high resistance level and a round number.

The USD rose to the highest level in almost two months against the European currency ahead of a report tomorrow will show European producer prices slid a fifth month, giving the European Central Bank (ECB) more room to cut Interest Rates. As inflation is slowing and the Euro-Zone economy deteriorates, the Dollar is likely to increase further to as much as $1.27.

U.S. Dollar Trading (USD) was well supported as US GDP beat estimates although it fell the most in 18 years down -3.8% in the 4^th quarter Y/Y. US stocks fell 2% as the market absorbed the recessionary numbers. The USD benefited though as safe haven buying supported. Consumer Sentiment was revised to 61.2 vs. 61.9 previously in January. Crude Oil closed up $0.24 ending the New York session at $41.68 per barrel. In US share markets, the Dow Jones fell 148 points or -1.82% and the NASDAQ fell 31 points or -2.08%. Looking ahead, December Core PCE expected at 0.0% unchanged from November. Also released, January ISM forecast to rise 33.1 vs. 32.9 in December.

EUR/USD is bottoming probably. If the pair breaks above 1.3770/80 expect further rally towards 1.4270/80.

After the rejection of the bailout plan the markets are crazier than before. Stay aside until the dust settles.

Financial markets are waiting for the negotiations on shaping of the $700bln bailout plan. Rep Barney Frank, in BBG, says rescue bill will likely be passed by Monday, and in less than a week a bill will be signed. Until the effect of the plan is clear the markets will remain choppy and volatile. Stay aside or trade with tight stops. Support is 1.4600 and 1.4550. Resistance is 1.4750 and 1.4865.

More than 12% rise in gold prices help the EUR/USD to rebound and gain 3 big figures. Market liquidity is thin and everyone with money can choose the direction and magnitude of the move. Probably the upward correction will continue. In these market conditions the best strategy is to stay aside. If you decide to trade you should use stops and take less risk. Support is @ 1.4280 and 1.4070. Resistance is @ 1.4440, 1.4480 and 1.4570.

Yesterday FED left the rates unchanged but warned that it is watching the markets and will act if necessary. FED rescued AIG by authorising NY Fed to lend up to $85bln as secured loans. We’ll see in the next few days if this is enough to calm the markets. Order books are very thin and the liquitity is extremely low. Be very careful and always use stops to protect your positions. EUR/USD is trying to continue its correction upwards but for now it is very difficult. Even better than expected ZEW couldn’t help. Support is @ 1.4070 and 1.3970. Resistance is @ 1.4220 and 1.4320.