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Daily Forex Technical Analysis 19th December 2008

Daily FX Technical Analysis 19th December 2008

USDJPY Downtrend still in place despite the bounceback in the US Dollar yesterday as the world flees the US Dollar. The Yen is now in a position where it is not the best performer in the market but still is expected to outperform the Pound and Dollar and we believe this will be a continuing theme through 2009. The market remains well capped by TDMA1 resistance on the daily charts which suggest maintaining shorts on closes below 89.74 tonight. Should a close above 89.74 be forthcoming, there remains the chance of a push higher to TDST resistance on the daily charts at 95.78 where structural shorts are favoured, but a close blow 87.26 on Tuesday is likely to see this TDST level drop down to 92.93. We maintain our medium term targets of 77/80 for the major and see scope for a dramatic drop lower to a currently inconceivable 35 level in 2009. Initial resistance at 89.74 ahead of 91.99, 93.12 and 93.93. Support below the 88.47 pivot point remains at 87.09 ahead of the 85 level and the risk level from the daily TD Combo 13 count from December 3rd at 83.60.
USDJPY, Daily chart TD Combo TDMA1, 200dma.
Daily FX Technical Analysis 19th December 2008

GBPUSD Big turnaround yesterday with the market pulling back into the centre of the 2 month consolidation range after the attempt to make ground above the range highs at 1.5539. The size of the fall took us below fledgling TDMA1 support and into the 1.48/1.50 range that I highlighted yesterday. As such, we are again in mid-range and playing the range from a tactical standpoint again becomes the favoured trade. Market still retains greater scope for USD weakness against the Euro, Yen and Swiss Franc. Resistance through the 1.5267 pivot seen at 1.5539, 1.5728, 1.5889 and 1.6202 with structural shorts favoured to be employed on rallies to daily TDST resistance at 1.6404. Support below 1.4878 seen at 1.4675 1.4465 and 1.4182. Long-term targets remain 1.25/35 and potentially 1.00 further out.
GBPUSD Daily chart, TD Combo. .
Daily FX Technical Analysis 19th December 2008

EURUSD Market got a nasty bang on the head from the twin resistances at 1.4683 and the 200 day moving average at 1.4705. Market still progressive on closes above TDMA1 support which is currently at 1.4103, but 240 minute charts – which had a 13 count on TD Combo at the highs yesterday – look like they may be forming a short-term bear flag which suggests a 4 hour close below 1.4179 would see a further pullback to the flag target at 1.3782. The pace of the advance spooked me a little and I was reticent to fade the move to 1.4683 despite targeting the level on the way up, but now I revert to a dip buying strategy, certainly if the holiday period produces a move to 1.3782 or thereabouts. Our view for 2009 remains EURUSD will again make significant upside progression and believe the highs of 2008 will be significantly surpassed – a 2 handle is not out of the question.
EUR USD Daily chart, TD Sequential, TDMA1.
Daily FX Technical Analysis 19th December 2008

USDCHF - Good afternoon bounce for the USD on a broad basis produced a nice hammer candle on the USDCHF chart. Further progression likely in the short-term, but the market needs to fashion a close above TDMA1 resistance – currently 1.1025 – to suggest the bulls are regaining a meaningful foothold. I am happy to maintain shorts recommended in the 1.22 region whilst closing below this average. Our longer term perspective remains that the USD will be an underperformer in 2009 and that we will see new lows in USDCHF, taking out the 0.9638 low from March 2008. Support through the 1.0709 pivot seen at 1.0406 1.0312, 1.0135 and 1.0009 ahead of the Mar 2008 0.9634. Resistance above 1.1025 seen at 1.1139 and 1.1560. USDCHF Daily chart, TD Combo, TDMA1.
Daily FX Technical Analysis 19th December 2008

USDCAD
Big bounce unfolding in European trading today taking the market above fledgling TDMA1 resistance at 1.2218. The daily chart is a bit of a mess with erratic trading prevalent in a wide 1.15-1.30 range. The 120 minute charts gave a 13 count buy countdown yesterday on TD Combo and we are up testing the associated TSDT resistance at 1.2351 on bar 9 of a sell setup. Chance of a short-term peak in this region, but given its location in the cenbtre of the longerterm consolidation I would have little desire to run anything other than minimal shorts from a tactical view. The CAD remains a close bedfellow of Oil and as we have said recently, will find it hard to make any independent progress whilst crude remains on the defensive. Would continue look to fade rallies towards 1.30, and also to sell weakness on a close below the 1.1459 low from November 5th. This suggests the formation of a double top which would call for a sharp reinitiation of bearish price action for 1.0331 TDST support and on to a 0.9885 double top target. Long-term cap at 1.30 potentially in place now and we feel the Canadian dollar has room to progress in a uniformly US dollar bearish environment without necessarily being the standout performer. For 2009, we do retain the potential that the late 2007 lows at 0.9057 are removed.
USD CAD 120 minute Chart. TD Combo.
Daily FX Technical Analysis 19th December 2008

AUDUSD Market constrained here between the TDST line at 0.7019 where I have been thinking of tactical shorts and a supporting TDMA1 line at 0.6815. No strong view here though a drift below TDMA1 support would be my slight preference given the performance of other pairs against the US Dollar over the past 24 hours. Support below 0.6815 seen at 0.6806 and 0.6486. Resistance through the 0.6953 pivot point remains at 0.7019 ahead of 0.7144, 0.7247 and 0.7671/96.
AUD USD Daily chart, TD Sequential,  Inc
Daily FX Technical Analysis 19th December 2008

GBPJPY The market remains stuck around the lower limits of recent price activity and the medium term outlook remains bearish despite the lack of recent progression to the downside. TDMA1 off the charts at the moment suggesting a non-trending environment and I continue to favour looking for decent selling opportunities. Resistance seen at the 135.34 pivot point ahead of 138.24 and 139.29 which has capped for a couple of weeks now. Offers above here at 140.83 and 145.43. As noted recently the likelihood of hitting my preferred selling level of 161.84 TDST resistance has been greatly diminished after the recent daily close below 137.56. Support remains at 132.26 with a close below the risk level from the recent buy countdown on TD Combo at 131.74 now looking like the trigger for another bout of steep losses through our next long-term target of 129.32. As noted recently, I continue to be worried about the potential for a major sharp decline for sterling on a broad basis and thoughts of GBPJPY at 100 should not be discounted.
GBP JPY Daily chart, TD Combo.
Daily FX Technical Analysis 19th December 2008

EURJPY
Market continues to consolidate above 115.85 support with the market failing at my suggested selling level of 130.25 TDST resistance yesterday. Market now testing TDMA1 support at 124.73 and a close below here suggests a test of the key 115.85 level. Market hit a 9 count sell set-up on TD Combo on Wednesday, and the failure to sustain 130.25 suggests futher upside from here will be problematic in the short-term amd I would persist with tactical shorts from here at present. Resistance above the 127.46 pivot point and 130.25 remains at 132.18 and 138.59. Support through TDMA1 support at 124.73 seen at 122.77 and 117.63 with key support now looking like the fresh TDST line at 115.85 - a close below opens a move below the late October 113.39 and the 2002 lows at 111.25 to target 105.45/99.87.
EUR JPY Daily, Daily chart.
Daily FX Technical Analysis 19th December 2008

EURGBP Completion of 13 count sell countdown on the daily TD Combo chart yesterday and I would be paring down tactical longs here. The formation of the 13 count is similar to that seen on September 4th which caught the top of the market and saw prices subsequently fall from 0.8192 to 0.7699 over the next month. I had been expecting a possible respite from positive momentum at around the 0.90 level – replicating consolidations seen after hitting the 0.70 and 0.80 marks, but despite the further advance to 0.95, the TD Combo sell signal and the continued uniform bullishness of pundits and reporters for EURGBP make me think it unwise for tactical traders to chase longs up here. Support today seen at 0.9332 ahead of TDMA1 support at 0.9192 which has underpinned the recent advance from the 0.8450 region. Resistance through 0.9565 seen at the TD Combo risk level at 0.9775 and the magical 1.00 mark.
EUR GBP Daily chart, TD Combo, .
Daily FX Technical Analysis 19th December 2008

Daily Forex Technical Analysis 19th December 2008