On-Line Forex Trading Tips

The EURUSD made a moderate bearish momentum yesterday, but overall still in consolidation phase. Beside ECB keep rate at 1%, we have no surprising statement that could trigger significant movement to break the range bound area. However, in general, actually ECB still maintain growing optimism about overall economy recovery progress, said that the rate the current rates remain “appropriate” and there are increasingly signs that the global recession is bottoming out. While ECB failed to move the market significantly, investors now focus on the NFP data today. Any surprising number, whether better or worse than expected, could break the range bound area and give us a clearer direction. A better than expected data should continue the EURUSD bullish scenario towards 1.4500 or even 1.4719 as risk appetite should rises while a worse than expected number should lead the Euro lower below 1.4336 and back towards 1.4250 or even 1.4150 area as the demand for Dollar as safe heaven currency may increase.

On technical side, the pair attempted to push lower, bottomed at 1.4328 but still closed above 1.4336 key support level. On h4 chart below we can see that the price retreated into the range area after slipped a little bit below lower border of the range area. CCI in oversold area and heading up suggests a very limited bearish correction momentum for now. The bias is neutral in nearest term but medium bullish term should remains intact. The pair is in critical phase where any movement below 1.4336 could be a serious threat to the current bullish medium outlook and could lead us back towards 1.4250 or even 1.4150 area. On the upside, a break above 1.4500 should continue bullish continuation towards 1.4719 area.

As I had expected, the Sterling slumped against Dollar as BoE decided to continue the Quantitative Easing program by expanding assets purchase program to 175b pounds. Following the report, the BoE said that “In United Kingdom, the recession appears to have been deeper than previously thought” For me, that’s almost like saying: “Hey, the recession may have reach the bottom in US and Europe, but not in United Kingdom”.

Here is the main reason why continuing QE program is bad for Sterling: So far, the QE program has shown very little evidence to help the economy recovery, while printing money to buy assets could trigger hyperinflation. Given that pessimistic UK economy outlook, my fundamental focus now is on the US NFP report today. Here is the scenario: If the NFP show positive number, I am not sure what is the effect to the Sterling. It can be mixed because I doubt that risk appetite could be applied to the Sterling in this situation. But should the Sterling supported, the upside momentum should be very limited. On the other hand, if we have worse than expected number (note that according to ADP on Wednesday, NFP data showed a worse than expected number), it’s going to be very bad for the Sterling as risk aversion is likely to rise and the demand for Dollar as safe heaven currency should increases.

Technically speaking, the GBPUSD was traded significantly lower yesterday after breakdown from the range area, bottomed at 1.6750 and closed at 1.6774 indicating a bearish view in nearest term and potential threat to the current bullish medium term. The bias is bearish in nearest term and any consistent move below 1.6750 support area should trigger further bearish momentum back towards 1.6660 area. Immediate resistance is see at 1.6890 area (Tuesday’s low).

USDJPY Forecast:
The USDJPY failed to continued it’s bearish momentum yesterday. Instead of break below 94.35 support area, the pair was traded higher above 95.50, topped at 95.80 but closed a little bit lower at 95.40. The fact that the trendline still doing a good job preventing further bearish attack suggests that we might see further bullish correction. We know that the pair has been moving in range bound area since last week and still trapped between trendline resistance and tendline support as you can see on h4 chart below. Unless we have a break on either side, staying out from the market is the best thing to do now. Immediate resistance at 95.88. Break above that area should trigger further upside pressure testing the trendline resistance. Initial support at 94.35.

USDCHF Forecast
The USDCHF attempted to push higher yesterday, break the range area, topped at 1.0679 but bullish momentum seemed very limited as the pair retreated back into range area. CCI in overbought area and heading down on h4 chart support the limited bullish momentum for now. I think we are still in no trading area as we haven’t seen clear direction. Until we have a break below 1.0589 signaling bearish outlook or breakout above 1.0750 signaling bullish outlook, keep stay out from the market and wait for further development. Eyes on US NFP data today. A better than expected number should support the bearish outlook while a worse than expected number should support the bullish outlook.

EURJPY Forecast
The EURJPY attempted to push higher yesterday, topped at 137.94 but further bullish scenario was clearly rejected as the pair whipsaw to the downside, close lower at 136.94. On h1 chart below we can see that this was a case of a false breakout from the range area as the pair retreated back into range area. Although the pair keep making higher lows since July 29, but bullish momentum seems very limited now as the pair still consolidate. The bias is neutral in nearest term but bullish medium term remains intact and only a clear breakout below 136.08 should be seen as bullish failure. Immediate resistance at 137.94 (yesterday’s high). A clear break above that area should trigger further bullish momentum towards 139.38 area.

GBPJPY Forecast
The double top formation I showed you yesterday has gave us a valid warning of a downside pullback. After attempted to push higher, topped 162.37 the pair whipsawed to the downside, bottomed at 159.94 and closed at 160.03. The bias is bearish in nearest term testing 159.30 area. A clear break below that area should be a serious threat to the current bullish medium outlook and trigger further bearish scenario back towards 154.00 area. On the other hand, if the pair able to stay above that area, the bullish outlook remains intact. Unless we have a clear breakout above 162.57, the upside scenario should remains limited at this phase. Immediate resistance at 161.20 area.

AUDUSD Forecast
The AUDUSD made indecisive movement yesterday, formed a Doji on daily chart as market continue to consolidate. On h1 chart below we can see that the pair attempted to push higher, traded above the upper border of the minor bearish channel but bullish momentum was limited as the pair retreated back into the channel. The bias remains neutral in nearest term but medium term outlook remains bullish testing 0.8500 area. Immediate support is seen at 0.8350. Break below that area should trigger further bearish correction scenario testing 0.8261 key support level.

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