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Swing Technicals- USD/JPY Short at 79.97 Facing Moment of Truth

22 February 2012, 18:18

February 22, 2012

CURRENCYCURRENT BIASPOTENTIAL STRATEGY
EUR/USD (Medium Term)
Watch for a new opportunity to emerge.
GBP/USD (Medium Term)
Buy GBP/USD at 1.5584. Stop at 1.5518. Profit target at 1.5683.
USD/JPY (Medium Term)
Sold USD/JPY at 79.97. Stop at 80.47. Profit target at 77.00.
USD/CHF (Medium Term)
Watch for a new opportunity to emerge.
USD/CAD (Medium Term)
Watch for a new opportunity to go short near the bearish trend line.
AUD/USD (Medium Term)
Watch for a new opportunity to emerge.
NZD/USD (Medium Term)
Watch for a new opportunity to emerge.
EUR/USD (Swing Forecast)
Potential Strategy
Watch for a new opportunity to emerge.
What is the trend?Neutral
What is this pattern?No pattern present - See all chart patterns
Why is this significant?There is no high probability pattern so we cannot place a trade.
What other indicators or Fib Levels support this thesis?No trade.
Reason for Strategy
The EUR/USD gapped up to the bearish trend line on the 2hr Chart. The resulting momentum pushed the pair above the trend line, which is now broken. Also notice that the broken trend line provided new support shortly after being broken, which is a phenomenon we commonly watch for. Since the break, the pair has consolidated and saw very little price action today. We could draw a triangle, but it would be weak since each side would only have two points of contact. Therefore, we will treat this as simple consolidation. Regardless, after this type of consolidation, the pair is due for a breakout.
Trade Invalidation
No trade.
Support & Resistance Levels
Resistance 3N/AN/A
Resistance 2N/AN/A
Resistance 1N/AN/A
Current Price1.3243
Support 1~1.2500See Weekly Chart
Support 21.1876Point X on the Weekly Chart
Support 3N/AN/A

Weekly Chart - Potential long term support could be tested near 1.2500.
2hr Chart - Consolidation emerges above the broken bearish trend line.
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