Forex Analysis: USDX-EURO-EURGBP CROSS RATES-LIVE
| 18 August 2011
http://www.youtube.com/watch?v=_gMnFhREXfA
With leading indicators on the rise led the US dollar index higher currently at 74.23 approaching the 74.40 basis point key levels from a low of 73.40, as of this writing. However, the next resistance levels of 75.05 & 75.35 basis points would be attempted inspite of the pessimistic outlook for the US economy.
The Average trading range for now has been the 73.85 – 75.10 levels which may probably take sometime to break away from that range. With increase volatility it may still try and attempt to breakout of its trading range.
The inverse relationship between the Euro is easily identified as it shows on the next chart formation of the EURUSD.
EURUSD DAILY
Finding a resistance at the 1.4450 levels within its major trend lower (Blue) that the Euro failed to penetrate it for a 2nd time and pulled back; as worries on the European crisis weighed on after the meeting . The prices are within a intermediate higher (white) where 1.4250-70 finds its higher support. And just above the 21 Day Moving Average resting on the support line at 1.4303. On a weekly chart, the Fibonacci rising fan formations shows the volatility of the market prices with wider price swings . As the Lowering tops formations indicates its lower band within a trend higher. The technically symmetrical triangular candlestick formation similar with the EURGBP cross weekly chart would breakout either directions as it would try to keep its pace with the USDX. As momentum continue to build up with technical adjustments for daily overbought conditions and technical adjustments.
EURGBP CROSS RATE DAILY
With prices lower following North American sessions, the continuation of the equidistant channel lower is on its way. The obvious ‘Head & lower right Shoulders formation on the daily is reflected on this chart. Whereas live current prices are back below its neckline. The Daily Selling Divergence more the EURGBP Cross rates compared with the W % has indicated a negative tone contrary to the weekly technical chart which prompted the both the Euro to move lower and Cable to be steadier to higher. With corrective moves lower. Although, we are inclined to believe that this has been a speculative curve by buyers for a probable weakness of the USD moving forward. Any price lower than the 0.8660 would signify a signal lower and would pull back down to the previous lower trend.
The contrary weekly outlook for the longer term proves to be a technically sound symmetrical triangle for the Euro vs. the USD which can break either directions depending on the USDX outcome at the end of the week’s closing prices.
GBPUSD DAILY
Volatility still persist of the European and US financial markets. This reflects also with the GBPUSD and the EURUSD's ability to whipsaw through the daily price movements. However, the contrary position vs. the Euro may prove to be the corect strategy while short on the EURGBP Cross maintains a long GBP as it benefits from these uncertainty with the Eurozone. The registered low at 1.6420 corrective move was resting on topof its ressitance levels while waiting for a clearer direction with the USDX to move lower. While the EURGBP cross would still serve as a draw back for the Euro and sustaining the GBPUSD to be steadier to higher as of this writing.
This also serves as a technical price adjustments while building enough momentum for the next upturn. Although, almost all analyst have been negative for the US economy with the USD keeping to stay as the prefered currency of choice for investors. Therefore, the back and forth price swings and wider spreads would be expected as once the shakeout occurs either in the European sessions or the North American trading sessions. This is what we have been trying to anticipate before the end of this trading month of August.
