Technical Perspective

Written by JS T. Alexander | 01 June 2010

Here is a summary of the technical outlook for the major pairs as perceived in an over all picture from a monthly formation primarirly used to analyze the general market sentiment based on the individual pair's trading range and a weekly average movement in the general direction of its trend.

EURUSD Monthly chart

EURUSD : General Trend is still bearish and does not have any real indicator of a trend reversal. Price corrective movements are expected on a daily basis for price and position adjustments of traders before the fundamental report on the Jobs data and Non-Farm payrolls this week. The overall trading range from the opening of the month at 1.3328 and the low of 1.2143 is about 1185 pips just for the month of May. A valid corrective move could bee seen between 1.2440-1.2580 on a short live attempt as the start of the new month and nearing the end of the 2nd quarter. This quarter may be considered an extension of the USD strength that was rather fueled by the Euro's weakness and investors shift to quality investment. A continuing downturn would also resume below the previous low and could eventually establish new lows within this weeks ahead. An inital objective would be within the range of 1.1980 - 1.2090 that could be easily attempted.

GBPUSD 4 Hourly chart

MARKET UPDATE: Supporting this analysis : GBPUSD Outperforms Market AS OF JUNE 01, 2010

http://www.youtube.com/watch?v=QL7tUSkmfUM 

GBPUSD : The previous low of 1.3655 registered low from the month of March 2009 is the actual objective on the downside for the Pound. Although, still working at a slower pace than the Euro at 1.4506 as of this writing. The short term attempt on the 1.4350 may prove to be supportive as new longs could still prevail as these price levels could also create some buying divergences as it moves lower. Although, they may also prove to be short lived until such time volumes and open interest with lower prices amy also trigger a surprising price reversal at these levels. However, the doji candle may be supportive at this time due to the pause and possible exhaustion of prices that may invite some scalping opportunities between the day traders. As this could be seen on the weekly chart on the GBPUSD. With a trading range between the HI-LO of the GBPUSD of 1083 pips would also trigger some corrections as one of the behavioral patterns of the GBP historically is to correct after a 1000 point movement. An average of 150-200pips can also be expected in between these corrections. Some long and short scalping opportunities could be taken on both sides of the trade.

USDJPY Monthly Chart

USDJPY : A rising channel is enveloping the monthly chart of the USDJPY and a contrary configuration of a dark cloud configuration on the last previous bars shows the probability that it still has more room to move lower. The lows are in a higher lows from their previous indicating a supportive long USDJPY buyers are still waiting corrective moves to enter the market. A classic example from a low of 84.79 November 2009 and the next low of 87.94 low registered this May 2010 when the Dow drop close to a thousand points. This long tail on the candle stick would be retraced as this movement was apparently been a quick move that have triggered some long liquidation on the way down of the USDJPY. On the other hand, the futures VOI has maintained their stand to buy USD on corrective moves vs. the Yen and the combination of a hedge strategy with the USDCHF.Currently the USDJPY at 90.68 holds it inital support at the price range of 89.30 - 90.00 on the weekly trend line support.

USDCHF Weekly chart

USDCHF : Has been called to move higher since the low price of .9910 - 1.0050 Fibonacci support and has now made a directional trend higher ranging between its high of 1.1695 for a total of 1785 pips. The significance of these ranges would indicate that the probable retracement may well be in line of 38 - 51 percentage point once the USD would correct or better yet whenever there may find some support for the Euro. Otherwise, there would be some adjustments made and the full wave from an Elliot wave formation would continue.

A good combination to find the objectives of the USDCHF in line with the USDX is the Elliot Wave and the three methods of the Fibonacci Theory. Price breakouts on a channel could best analized with the Donchian Channel. Moving averages will only provide a delayed reaction after the fact as prices have moves prior to its confirmation.