FX Analytics-EUR/AUD/JPY
| 13 September 2011
Update: Aussie Dollar & the Japanese Yen
The dynamics of the currency market has now proven to becontinuing where we have actually left off from May of this year. with the EURUSD pair; from a registered high last May at 1.4940 was a first signal of a Price & Trend Reversal. Followed by a series of weekly volatility until a corrective move from the middle of July through the 3rd week of August, which showed a wide trading range from a low of 1.3836 to 1.4550.
This corresponded with the US dollar weakness only until the last week of August. The irony of the matter, was that the signal for a continuing bearish trend can only be identified on an overall monthly chart formation. And its application for medium to long term trades would be more viable. For short term trades would be vulnerable to price volatility and wider price fluctuations that can easily trigger a stoploss during any trading session. The back and forth fundamentals between the US and Europe had made it even more difficult to find a perfectly good timing for traders meeting a wider trading range each day that almost averaged between 150-250 pips within a day plus moving in both directions of the market.
EURUSD WEEKLY CHART
With that said, the EURUSD & GBPUSD has finally gave way to the downside with more velocity setting the pace for the US Dollar to really get a new life line for its recovery. The 72.90 basis point proved to be quite supportive in spite of the several attempts reaching the 73.40/50 levels before the much awaited recovery working at the 77.38 basis point as of this writing. Although, support prices for both pairs have come to a slight corrective mode where certain buyers have emerged from the past couple of weeks price drop. This correction would be short-lived while the fundamentals this week would dictate the immediate price direction. The GBP & EU zone core consumer price index for August followed by Jobless claims, and the US retail sales for the earlier part of the week may provide some hints before the US University of Michigan confidence report would be coming out this Friday.
AUDUSD DAILY CHART
Meanwhile, the Aussie dollar has dropped to its lower levels currently at the 1.0280 and would be re-attempting to reach its previous low parity levels again within the next couple of weeks ahead or even earlier. The technical candlestick formation for the AUDUSD thus far shows its bearish signal as indicated on the left hand figure. The probability to reach parity levels would be attempted in the next trading days ahead as it levels off while the US Dollar Index continues its rally. This trend would continue lower with some daily pullbacks for corrections are taken that may adjust its relative strength to make room for the continuation in a more gradual manner.
As the same goes with the continuing strength in value for the Yen, while the USDJPY pair made a price weekly reversal after adjusting with the USDCHF when the SNB moved previously checking its currency pegged with the Euro. This could have been an anticipated move by the SNB seeing that a contagion would continue with the debt crisis in Europe. And now Italy as been eyeing china for some much need asistance to perk up their economy. These are preparatory moves and strategies that they are doing before any Euro down movements would continue and hurt their economy in the near term. Watch for the syncronize price behavior of the US Dollar and the Yen's price rally that would sometime seem at odds but their directional trend would remain to be bullish for the weeks ahead.
USDJPY DAILY CHART
