Majors & Cross Rates
| 22 February 2012
EURGBP
UPDATE as of 02.22: The recent price movement lower of the GBPUSD to 1.5695 and a steadier EURUSD above the 1.3180 MA price level have actually gave support for the EURGBP cross to accelerate beyond the resistance and trading range high of 0.8402. Currently working as of this writing at 0.8428 initial breakout price would have minor pullbacks on a session to session basis since this is the first re-test beyond the 0.8400/05 resistance (R1). While the technical mid-term outlook would be equal to +/- the length of the consolidation range as long as volumes would warrant such rally alongside with the EURUSD outpacing the GBPUSD for that matter. A follow through is necessary, again supported with volumes and enough momentum after a correction from this initial penetration. Otherwise, a failed follow through may lead to a major corrective move. But the only confirmation would come from the USDx price levels (Ananlysis reference USDx Down dated: Feb. 01, 2012). For now the USDx is at 79.22 and we still have a couple of trading days left. The price range to watch for the US Dollar index is till 79.50-/0.05/10 basis point.
GBP
UPDATE as of 02.22 : Since the GBPUSD have achieved its objective resistance at 1.5880 pullbacks were expected since the pattern of HI/LO has played significant for the past few trading sessions. The recent price movement lower to 1.5695 have actually gave support for the EURGBP cross to accelerate beyond the resistance and trading range high of 0.8402. Currently working as of this writing at 0.8428 initial breakout price would have minor pullbacks on a session to session basis. While the technical mid-term outlook would be equal to +/- the length of the consolidation range. This is were most traders would be taking positions at risk seeing a breakout. While we would then be booking some gains as an overall net positive between our cross trades and continue to monitor the EURJPY cross rates at this period of time.
EURJPY
UPDATE as 02.22 While the EURUSD strength delayed reaction even after the EURO group's successful deal, it is only now that the market has gained interest due to most traders were actually back from the US President's day holiday schedule. The USDJPY's price acceleration to 80.28 high have indeed given the EURJPY the fuel to reach its 1st initial objective stated above at 106.31 high as of this writing. There is no actual straight price rally unless enough volumes and fresh risk appetite positions are initiated by renewed institutionals coming to the market. The only danger that may subsequently arise is a probable formation of candle bars on a day to day basis that may lead to an island formatiion for a major corrective move supported by some fundamental reason. But for now we do not anticipate one. However, such moves lower would enable us to improve our trailing orders for protective strategies & would be booking the gains accumulated since Februar 2, 2012. Although, leaving a small number of units to be risked whenever the 2nd leg higher would resume.
