January 18, 2012 by staff 

CAD To USDCAD To USD, EUR/CHF Forecast Technical Analysis
EUR/CHF fell for the Tuesday session as traders seem intent on testing the resolve of the Swiss National Bank. The SNB has a “floor” in this pair at the 1.20 level, and as a result the market has been well above it for several weeks now. However, it looks like we are going to find out exactly how much resolve the SNB has about that level soon if this keeps up.

Buying at this point probably isn’t prudent. In fact, we prefer buying close to the aforementioned 1.20 level, as the SNB would certainly be forced to act to keep its credibility. If it didn’t defend that level, the market would pile on and punish the SNB for its bluff. We don’t think they will allow that, and as such we are very interested in buying this pair the close we get to those level. Until then, we are flat of this market.

AUD/USD Forecast Technical Analysis
AUD/USD rose again on Tuesday as the commodity currencies got a bid yet again. The triangle that we have been watching in this pair was pierced, but the breakout was beaten back by the resistance. The pair looks very strong, but we didn’t get that daily close above the 1.04 handle that we wanted to see in order to get long. The market will now have to be watched in order to see if it falls as markets will sometimes do this before a reversal. The breaking of the uptrend line at the bottom of the triangle would be a massively bearish signal and we would need to see that in order to sell. In the mean time, we are waiting to see if we can close above 1.04 in order to buy, or break the uptrend line of the triangle in order to sell.

USD/CAD Forecast Technical Analysis
USD/CAD fell for the Tuesday session as the oil markets continued to grind higher. However, much like the oil markets, this pair has found itself winding up in a tighter and tighter manner as it has formed a daily triangle. The triangle is symmetrical, which of course shows real indecision. The oil markets are certainly to blame for this, and as a result this pair has to be traded while following the oil markets as well.

On a daily close outside of the triangle, we are willing to take a trade. The 1.01 level below is the start of a massive support area, and as a result, we feel longs are probably more likely to do well over shorts going forward. However, you cannot buy at this point – you need some kind of proof. The daily candle is a hammer, and this shows support as well. Because of this, we think it goes higher, and would be willing to take a short-term small position to reach the top of the triangle. However, no larger positions can be taken until we are out of the pattern.

NZD/USD Forecast Technical Analysis
NZD/USD rose during the Tuesday session as traders continue to buy the commodity currencies in general. The 0.80 level has been massive resistance lately, and the area did in fact fight back against the bulls. The daily candle is closing right around the mark, and this suggests that it is about to give way. However, we still need to see that daily close well above the level in order to get long. The pair looks promising, but isn’t quite there yet.

EUR/GBP Forecast Technical Analysis
EUR/GBP rose over the session on Tuesday as traders continue to figure out who is going to get hurt the most from the EU debt crisis. The Euro has enjoyed a bit of a bounce lately in this pair, but the reality of it is that both currencies aren’t liked. The 0.83 level is where we are closing, and the level is also considered to be resistance as well, albeit a minor one.

The pair cannot be bought as the Euro is far too toxic to own in general. The Pound isn’t exactly loved either, and looks set to enter a massive sell off against the Dollar. The pair is a sell overall, but as both economies are struggling – this pair will grind lower, not fall. We are looking for resistive and weak candles in the near term from which to sell. Currently, we don’t see the signal.

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