Trend Line Analysis : 30/07/2015

Introduction to Trend Line Analysis
Welcome to our newest feature; Trend Line Analysis. Our professional market technician showcases intraday / swing trade setups on a broad spectrum of FX currency pairs. The most effective way to use the setup are:
▪ If indicated price zone holds; consider partial profit taking between 20-40 pips before aiming for the maximum listed target.
▪ If the price zone fails to hold; we likely to see price moving against us. Fail means; the candle closing higher or lower to indicated price zone.

 

Today was quite dramatic with FOMC came and gone which ended with upbeat USDOLLAR. Though we didn’t have the rate hike announced today; it is soon to come and that has given USDOLLAR the lift considering the fallout on it for the past 2 days of trading.

Most of the commodity crosses were able to make rally particularly against the EURO and later against the GBP as well; which was needed to overcome the Over-Bought conditions on them. GBP still seems taking on the crosses while EURO needs to do something special, but nevertheless it’s crosses are at main support zones and can stage a comeback rally.

GBPNZD

We are looking to enter buys off the 8 hrs chart around to T2 trend line for we if we can hold out to this level; there is plenty of room to run. The ideal target on the run higher can post newer high with run into early 2.35XX been the soft target. A break higher and a close would imply we have more follow through likely coming in.

GBPNZD has been hit hard with the pair rallying leaps and bounds on NZD weakness due to rate cuts and hints of GBP rate hikes; making GBP the preferred currency over the NZD. The pair however required some relief to shun off the Over-Bought condition and as such we believe the relief rally is coming to an end and the continuation of the direction to prevail.

Hence; we are interested to initiate longs off T2 on 8 hrs or T1 on the 4 hrs (both same on support) and try to take it to newer highs; considering we have taken out initial resistance based on the 4 hrs (T2) which is also our soft target.

GBPNZD 8 hrs - Main chart and T2 zone to enter longs
GBPNZD 8 hrs – Main chart and T2 zone to enter longs
GBPNZD 4 hrs - T2 been soft target on the intended longs and this is also a break point to carry the rally to next target zone; T3
GBPNZD 4 hrs – T2 been soft target on the intended longs and this is also a break point to carry the rally to next target zone; T3

EURJPY

We are interested to take cautious longs off T4 for a possible break higher to 136.6X to gather pace towards 138 handle; else sell the break under T4 for a deeper fallout on the pair.

The pair was looking quite straight forward on yesterday’s analysis to pick longs up from T4 trend line; however the scenario has changed by today’s close.  The pair while holding to the 135.9X support zone, is seeing shallow bounces and well under 136.6X crossover point it requires to break for momentum to build for the rally higher. As such, while the T4 still is a breakout point and got a retest; if can hold to it, has potential for a 136.6X play before either breaking and heading higher or failing to it.

Hence; can still attempt to be long off the intended support and if the price holds to the T6 trend line or 136.6X; can look to bank and go short with stop and reverse on a break higher. Alternatively; can look to sell the T4 break (declining and can come as low as 135.83-85 as we progress)

EURJPY 4 hrs - T4 breaks for move to the lower side; else T6 breaks for a move towards 138 handle
EURJPY 4 hrs – T4 breaks for move to the lower side; else T6 breaks for a move towards 138 handle

USDCAD

We are looking for some dips on the pair to enter longs around 2905-10 zone for a possible move towards 302X; with around 2980 been soft target.

UCAD made quite a move today prior to the FOMC statement on back of Oil rallying. The pair was met with a support zone which was a previous resistance and it held provoking a decent bounce; hence  hinting at surge higher. Overall the pair looks bearish against the USD and as such this is possibly where we ended the correction and can see continuation of longs with 302X been initial target. It doesn’t help with a dovish BOC compare to upbeat FED’s and the interest rate differential evidently will play an important role in days to come.

Hence with a view that a much needed correction ended on the USDCAD; we can start looking at higher USDCAD and a retrace lower to 290X will be our preferred entry to try longs.

USDCAD 4 hrs - 2905-10 test and a hold to enter longs
USDCAD 4 hrs – 2905-10 test and a hold to enter longs

EURAUD

We looking to buy the pair if it gets a test lower to 4930 zone for a possible move to 5050 with potential run to test mid 51XX.

EURO is still pressured due to the intensive reforms IMF and ECB wants Greece to take to ensure the bailout carries on Greece stays within the EU.

Technically speaking T1 trend line comes in as a decent looking support zone and we will look to long off it today / tomorrow for atleast a move to 5050 with potential run higher.

EURAUD 4 hrs - T1 looks decent supp to try longs for 5050 zone
EURAUD 4 hrs – T1 looks decent supp to try longs for 5050 zone

GBPJPY

We are interested to see a test of T1 unfolding to 194.7X and like to sell the pair for an initial 50-70 pips with potential run lower to 193.2X.

USDJPY is likely to head into the 125.XX handle and as such we are expecting top resistance for the day on it to 124.8X. If USDJPY can rally with a break higher to 124.30 and that can accelerate the move on GBPJPY towards listed interest zone to sell. Similarly an expected retrace off 124.8X on USDJPY should ideally test 124.3X again before likely assault higher into the 125 handle. This should be sufficient to see a decline from 194.7X on GBPJPY to intended targets on the pair.

Hence; 194.7X carries our interest to try shorts for an initial 50-70 pips with ideal run lower testing 192.20-3X.

GBPJPY 4 hrs - T1 zone to sell
GBPJPY 4 hrs – T1 zone to sell

USDJPY

I’m also attaching USDJPY chart on 8 hrs and if 124.8X comes into play for the day; can sell it for 50 odd pips.

USDJPY 8 hrs - T3 top resistance for the day
USDJPY 8 hrs – T3 top resistance for the day
USDJPY 4 hrs - T4 current resistance and a break brings 124.8X prime resistance into focus
USDJPY 4 hrs – T4 current resistance and a break brings 124.8X prime resistance into focus

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