Forex Daily Market Report

As mentioned yesterday, bullish congestion bumping on 318 has been making trading difficult (at least directional trading). Fortunately, Kase remain very reliable in this environment, using our usual levels (30p/60p apart). Short 10p Kase are obviously more sensitive subdivisions.

No major change in outlook today, with more chance of exhaustion of buying pressure allowing a deeper retracement. 312 pivot should first hold, then let go to lower part of same trading range. Again, unless we see a push to a clear (D+) breakout (cf last reports), congestion is here to stay.

Similar story on USDCHF. Good short Kase swings, with 915 turning to strong support level despite momentary penetrations seen yesterday. However the narrowing of the range, and the bearish bias on longer time frames could the US$ further. At the same time, it is way oversold on (4H+), so even if one see an excursion south of 915 (pivot on longer time frames), a possibility of lashing back above 920 still exists.

GBPUSD is confronted to the same uncertainty although it may be easier to follow its behaviour on the current channel. 580 proved to be a good support to now aim back at 587 strong resistance. Strong and maybe too strong, so we shall monitor a possible profit taking trigger on channel breakout (on target for the more aggrssive traders), along with EURUSD and other major pairs. The Pound is massively overbought on (4H+).

( Posted 7:10 AM UK )

Market Report for Feb 2nd 2012

EURUSD jumped back on 306 support to toy with 318 again. There is however no reason to change our outlook at this point. Bullish congestion is certainly a positive indication for the Euro yet a clean break of this 318 resistance level, also (D+) bearish resilence, as well as passing (D) Fib on 323 will be necessary to confirm a turnaround on those longer time frames. In the meantime, hesitation should continue with more Kase swings today. Having said that, time spent in current territory bodes well for a change of tone. We shall monitor current Kase range with 312 possibly playing mid range pivot role (support). No indication of a breakout today unless exogenous information affects the current price equilibrium.

USDCHF fell back to previous lows, in line with a surge of the Euro. Remaining below the 922 bearish resilience line, congestion in same range should persist, with however the same (D+) pressure to go test a lower support. Breaking range lows (unlikely in the short term) would be concurrent to the Euro passing strong resistance (as per above). In the short term, Kase indicate a willingness to try and hold 915-916 but the bearish bias should have the upper hand in the end.

GBPUSD found support above 570 to shoot up to next strong resistance on 587 where it entered into bullish congestion. Despite being massively overbought, it seems the market has been reassured by the turnaround on 570, erasing the need to test 562 again. Like EURUSD, a consolidation is absolutely necessary but it is clear that the market has now bullish and an upward channel has formed. This should make our life easier combining Kase Fibs, salient levels (60p apart) and now channel boundaries (580?). The current resistance is also getting weaker, so the next wave could well break it fairly easily.

( Posted 5:40 AM UK )

ADVANCE NOTICE: There will be no daily report from Feb 12th to 22nd

Daily Forex Market Report

We anticipated volatility to come back on strong 318 resistance, and followign Kase was a cinch. The Euro fell back in an orderly way to salient 306 level (as per regular energy quanta). Although this is a important support level on Kase (pivot), the price line is below bullish resilience level and longer time frames are calling for a more substantial pull-back now, in line with (D+) bearish resilience and consistent with a bearish resilience (and Fib) announcing the end of the upward retracement (former pattern is incomplete). This clearly indicates the need for a lower support and a congestion on (D+). Current 306 may soon play the role of a pivot, i.e. hold or more likely settle in the lower range north of 294.

USDCHF bounced a little higher than expected (below 913) to climb back to 922 strong Kase resistance, and is also looking at breaking current highs to reach near 927 (former pivot now turned strong resistance). This cap should then weigh on a long term recovery. 922 is bearish resilience on longer (D+) time frames, and may play pivot level, and we may see a bit of a tug of war between short term and long term traders on this level. Depending on behaviour north of that line, traders may settle and take it as new support.

GBPUSD gave a go at the 575 target to even toy with 580 yesterday before retracing. Limited profit taking is in order now, with due consideration to 574-575 again to determine support level (Fib). Despite overbought, he pound remains well oriented even if, as mentioned in previous reports, longer term traders still need to be reassured above 562, so a very firm support will have to be confirmed there.

Salient levels will have to be monitored across pairs to assess the strength of the US$. Overall it is a matter of finding new supports for the European currencies to confirm the change of tone seen recently.

( Posted 6:35 AM UK)

Daily Forex Market Report

EURUSD retraced yesterday in a very orderly way, i.e. clean Kase swing, to find support on previous lows, incidentally also bullish resilience. We are back to strong (4H-) resistance on 318, where momentum should now fade allowing for bullish congestion to set in. One cannot discard Kase pushing a little and triggering a breakout effect but the probability remains low at first. We will watch a 10p Kase for upside volatility or downside search for a nearby support.

USDCHF surprised us a little with a bounce which took place inches above stall level on 911, yet keep the symmetry around 9155 pivot. Movements therefore remained predictable on Kase. Followed another down swing i.e. back into the dominant trend, to see now a drift to lows possibly leading to bearish congestion when pressure starts abating, in line with the salient level on EURUSD above. The US$ looks a little oversold on longer (D+) time frames too, although bearish congestion should eventually take it to 908-909 (as mentioned in last report).

GBPUSD was here as well relatively easy to follow on Kase, in an otherwise congestive environment on (2H+). 5655 held on two occasions. That level is actually a subpartition (~30p) sometimes used in case of arbitrage across pairs. The Pound is now confronted to the strong resistance on 574-575 in line with EURUSD, and also unlikely to break at first. The market is however better orientated and one cannot discard a breakout later on (D+/W) after a solid support is tested to gather strength. For the time being, Kase seem to indicate a good fight on resistance, and since (2H/4H) congestion has remained well above bullish congestion on 562, one may have a positive surprise earlier than we think.

( Posted 6:15 AM UK )

ADVANCE NOTICE: There will be no report from February 11th to 22nd

Daily Forex Market Report

The Euro fared as expected, testing support to climb back quite strongly. We first thought a deeper retracement would be needed, but on the contrary it help 312 to go pass 318 and now even aim towards 324. This last surge above 318 is not exactly warranted in any (4H-) time frames yet we do notice a possible justification to go test (D) Fib retracement on 323-324 (same as Kase Fib Exp). There is increasing indication the Euro has now gone a little ahead of itself and a pullback early this week is inevitable. We therefore anticipate a test for support on 318 (Kase) or maybe lower (2H+).

USDCHF is giving extra cues to justify at least some follow-through early in the day. 9185 played pivot role sending for a short while, holding for a while then breaking and allowing a fall to symmetrical level below 916 (Kase). More suprisingly maybe, traders penetrated 9155 to test it for resistance during US lunch hours, fueling more selling, and this is not quite over yet. The US$ may settle on stall level on 908-909 where bearish pressure should subside a bit particularly on longer time frames. Levels are not perfectly aligned across pairs, so will monitor EURUSD and GBPUSD to gauge whether USDCHF may or may not need to slide lower.

GBPUSD first fell, paying no attention to 5685 to go hit our target ‘spot on’ (using symmetry around pivot on Kase). The following strong bounce (again thanks to Kase!) allowed a climb over pivot and a test for new support, and 574-575 is now within reach (similar dynamics to EURUSD above). Although this move to Dec highs is excessive, we maintain our more positive outlook, with a higher probability of holding 562 now bullish resilience on (4H), and key level to confirm a recovery on (4H+). In the meantime, Kase should keep doing wonders in this bullish congestion environment, likey to hold 571-572 first. That area may act as mid-range pivot later during the day.

( Posted Sun AM UK )

ADVANCE NOTICE: There will be no report from February 11th to 22nd

Daily Forex Market Report

EURUSD reached our 318 target spot on to then engage into normal profit taking, with some hesitation about testing bullish resilience on 305-306 or not. Exhaustion is natural at this stage, particularly when the former bearish pattern was aborted. Having said that, the turnaround looks about confirmed even on higher time frames up to (D). (D+) would now need a clean break of 316-318 which may not materialise in the short term. For the time being, the Euro needs to determine which side of the 312 pivot (on 10p Kase) it is comfortable with, and it is most probably going to be south. Once support is confirmed, bullish congestion, i.e. creeping back to 312 and above is our favourite scenario.

USDCHF is still confronted with (4H+D) Fib where it is trying to settle (cf last report). On shorter time frames, levels are not quite aligned and this explained the excursion to the next level around 915. This may be a temporary excursion based on bearishness and higher volatility. The US$ would need to first climb above 922, and even go test 928 to reverse the trend, and this remains quite unlikely at first, so we are going to see a more congestive environment to monitor on our reliable Kase. We note that 9185 could there play a mid range pivot role. Yesterday’s lows should hold.

GBPUSD is also now sliding naturally after missing the 574 target by just over 10p. 5685 is now playing pivot role in a bearish environment (Kase), and we cannot discard a return to 564. Having said that, our attention is more focused on 562 for the longer term (4H+/D), which still looks too fragile to hold as new support. Time spent above that line works towards it though…

USDJPY: now on special request only (sorry)

( Posted 6 AM UK )

Daily Forex Market Report

The Euro behaved well yesterday, testing 306, then returning to bullish resilience level, and finally shooting back from there to even break 306. After a moment of hesitation (i.e. testing 306 for new support), the Euro climbed to 312, following our usual quantum levels. EURUSD could now aim toward 318+ later on where bullish congestion is expected. Longer (4H+) time frames seem to indicate the Euro confirms a (D-) reversal yet also went ahead of itself, so some profit taking should materialise when buying pressure starts fading. We need to note that the bearish pattern on (W) was not completed, and although it may be aborted, it is more likely to only show as an upward retracement leading to a broad band bearish congestion south of 350. For the time being, bullish congestion to 312, then possibly to higher levels on (2H+) should be monitored on Kase.

USDCHF tried to hold 928 for a short while, retracing to the highs trendline (Kase) also bearish resilience to then fall again. Almost to our suprise 928 broke quickly, and the mid range pivot called for some symmetry, i.e. the fall ended on 9215 where traders started taking profits. The ongoing bearish context is paced by usual waves triggered on salient levels (similar steps as EURUSD), so we should see a repetition of same patterns today. We do however realise that USDCHF needs to settle, and this is appropriate Fib territory particularly on (4H+/D) with consequences on cross-pairs as above.

GBPUSD: For the same reason, i.e. a need to arbitrage across pairs, the Pound bumped on 562 to also bounce back strongly (like the Euro), and should now go congest in 568 area. We however need to be cautious here as this may only be a temporary penetration for higher time frames as seen since beg of Jan. 562 is too crucial going forward to be shrugged off: hesitation and volatility should pick up. Kase should provide cues here particularly if 562 holds after bullish congestion to 568 is over.

USDJPY: another wave triggered on range highs as mentioned yesterday. Support to be found on regular Fibs.

( Posted 6AM UK )

Daily Forex Market Report

EURUSD did retraced to 295 before charging ahead. Scenario we anticipated i.e. testing (4H) bullish resilience in 294-295 area. There is now a more affirmed indication of a possible rise to congest near early Jan highs again before retracing again. If highs break, the Euro will shoot to 312 or even higher (on 2H+), otherwise congestion will prevail with possible further tests of 294-295. As so often, faster Kase are performing well. We there notice a 300 mid range pivot acting as possible support (Fib on 301) and a marked difficulty (i.e. congestion) as we go near 306 resistance.

USDCHF briefly penetrated 928 and the bearish congestion situation should dominate the trading scene hence recovery looks difficult at best. Although quite potent in the short term, longer time frames will probably point lower eventually. Dollar strength will also depend on the behaviour of the Euro (see above). We note that 928 plays a mid-range pivot role on fast Kase, i.e. in absence of strong bearish pressure there the Franc may just settle for the lower part of the range.

GBPUSD charged to 562 strong resistance (across the board) which is now a crucial price point on higher time frames. There is no indication this level will be broken and on the contrary, some limited profit taking (as mentioned yesterday) may take place. Incidentally, bullish resilience now sits on yesterday’s lows. However looking at salient levels on Kase, support should be found on 5595 or maybe 5565 i.e. bullish congestion on (2H+) should not turn into any reversal for now. As a matter of fact, longer (D+) time frames may also settle on this pivot level and carry spending time either side of 562 as seen since late 2011, and eventually dissipate the strong bearish pressure accumulated on (D+/W).

USDJPY: bullish bias (cf last report) took it to 77.93 – 77.95 strong resistance area. As so often with this pair, a typical breakout on highs and we cannot exclude another round to now aim for late december highs (strong res.) to then most probably go for another round of bearish congestion. Longer (D+/W) time frames do not seem reeady to break that level.

( Posted 5:55AM UK )

Daily Forex Market Report

EURUSD found support on 288 as anticipated, where it then bounced strongly to go test the salient 300 resistance, penetrating it to 305 on strong momentum. The Euro is now understandably stalling, looking for another support level to gather strength again, and this could be on 298 or as low as 294 (Kase). Breaking 300 indeed looks feasible at some point but not before another round of profit taking. We do note however that breaking 300 could unleash strong buying to 318-323 area on (D).

USDCHF dropped to 928 which is incidentally a very strong support across the board, and last line of defense before a return to 920 (Fib) on (D). We had noticed a airhole situation, so it is now a matter of finding where support can be fouund. 928 should hold and quite possibly trigger a wave of buying as bearish pressure is not very strong on Kase and (2H-). Recovery should be limited too (check Kase Fibs), hence we cannot exclude a bearish congestion on 925-928 leading to a possible penetration of support (maybe not as deep as 920) later in the week.

GBPUSD proved very resilient, bouncing on 551 i.e. above resilience area (549-550). It then climbed to 560, yet at the same time the former pivot level (cf last report) on 562 has turned to strong resistance, calming buyers’ appetite a bit, so a more pronounced wave of profit taking (without affecting the general trend) would be in order. Resilience level has now moved up to 550-551. Higher (D/W) time frames do not seem ready to move back to above the salient 562 level, and as a matter of fact could test it to send the pound lower, i.e. confirming the bearish trend on those long time frames. It is important to now see on Kase and (2H-) whether Fib support holds to fuel a bullish congestion to resistance again.

USDJPY: upward bias in same range trading. Holding 76.95 pivot bodes well in the short term (2H-), but longer time frames remain too bearish, so should squash any budding recovery.

( Posted 5:40 AM UK )

Daily Forex Market Report

EURUSD admittedly missed the Fib target by a little on Friday morning and then looked for support. After the good run the Euro showed last week, profit taking was not only normal but bullish resilience level climbed to 288-289 so one could assume support could be found in this area. There is however an equal chance to see the Euro retrace deeper to a lower Fib (~285?). All time frames are now better orientated although longer (D+) still need to break 300 to confirm the current recovery, and this would only mean bearish congestion there as the Euro is not showing a reversal pattern territory there.

In the meantime, faster Kase now need to settle on support to gauge whether buyers are ready to hop in and attack 294, 297, and maybe 300 again.

USDCHF hit 932 target but has been finding it difficult to bounce back from there. 937 is now bearish resilience level and a recovery pattern is visible at least to take it back to Fib (940-941), yet energy levels are low, so indecision could certainly blur this bullish outlook. The difficulty comes from higher (D+) time frames which show a airhole configuration, trying to hold bullish resilience above 935, but the pattern is pointing towards drifting to lower support level around 920 (Fib).

GBPUSD has been remarkably bullish and has now reached stall level in 556-557 area where profit taking makes sense either to bullish resilience area (549-550) or to lower Fib (less likely). It should in any case not affect the turnaround seen up to (4H), and it seems (4H+/D) may then be willing to test a higher pivot level in early Jan highs area.

USDJPY: trying to hold above 76.95 noe turns mid range pivot and strong support on Kase. It may be a difficult ascent though, always subject to sudden energy spikes to salient level like 77.25 stall level.

( Posted late 7:55 AM UK )