SRO - Analysis 2:
| 13 February 2012
UPDATE: As of Feb. 14
The EURJPY has recovered from it daily corrective move and is currently back at the highs of 102.75. The corrective low at 101.80 was well supported and in line with the EURUSD 1.3144 correction dated the 13th of February and is working at the 1.3200 recovery levels.
Reference Video: http://www.youtube.com/watch?v=j9tm2h_TSEo
While the daily directional move of the USDx has helped the USDJPY to gain some ground and is moving back higher above the 78.00 1st resistance levels that has prompted to support the EURJPY cross currently above the 103.00 levels. The price adjustments likewise helped some traders to regain back some trade footing with fresh momentum and volumes have emerged while volumes are slowly increasing towards the mid-week's trading activity.
The daily candle bars as shown on the chart depicts the spread between bulls and bears are just about even while waiting for other fundamentals in the news wires regarding the Euro. For now the similar drawbacks are only expected on a day to day and trading session to session basis while the directional trend for the EURJPY & GBPJPY crosses is still within its upward trend. Support1 levels are seen at 101.60 while it stays above the 21 day MA of 101.20. This justifies maintaining our position of Feb 2, 2012 as prices would continue to move gradually at a better pace while building momentum after the 2 day correction along side with the corrective move of the EURUSD. Otherwise, the USDJPY may well bid the prices higher in line with the corrective move higher of the USDx currently working at the 79.20 basis point levels. Any price above the 79.50-80.10 USDx resistance would trigger the cross rates to further its advance.
As of Feb 13 Opening levels Asia & Europe
The opening price levels for the week is a reflection of the Greek's parliamentary agreement meeting its approval that prompted the higher Euro and consequently a lower opening price for the USDx. This choppy market reaction likewise is a clear reaction of the Tug of War both fundamentally & technically supporting wider price swings amongst the majors and crosses.
The active pullbacks across the board last Friday's closing were expected as the market sentiments and price action would continue its near term trend for the week. Liquidation and some short-covering actions were present during the week ending of the 10th of February that may prove to continue towards this week's trading activity.
On the technical side, the previous low of 1.3025/27 serves as the back drop of a double bottom price that likewise triggered some short covering as the prices rallied above the 1.3250/80 1st resistance with a registered high at 1.3320 which would be re-tested with this 3rd trading week of the month. Some drawbacks may stale the Euro prices versus the GBPUSD trying to keep pace. However, the end-result would eventually be the EURGBP cross rate to move higher with daily corrective moves that may have some influence contrary to this outlook. Whenever, the GBPUSD daily corrective move would support the rise of the EURGBP cross otherwise any negative fundamental for the Euro to move lower would then weigh more than the previous. We just have to watch the relative price behavior of these three majors for now. Setting the pace for the USDx to continue to move lower in the interim with daily corrections within the price range no higher than the 79.60-80.50. And this can also be viewed on the weekly chart formation.
Meanwhile, the EURUSD, GBPUSD & the EURGBP cross maintains a positive tone after the Friday's move after the reports that would somehow spill over during the European opening sessions towards the US trading sessions. Opening with a 20 pips spread may not be enough as it moves forward to the European session would prove to be a wait and see attitude for some traders if such follow through would arise. Although, the current price of 0.8390 is just within breaking out from the trading range of 0.8400 and 0.8265 low within a rising channel. The Pivotal price still remains for the daily and weekly 21 D/W-MA is at 0.8290-0.8330 range until such time it makes a new low influenced by some fundamental news that may change the interim direction and go back to its overall downtrend.
Take note that the daily candle bars are intra-day and week bars reflecting a pause, timely and temporary break upwards would eventually take place otherwise contradicted with fundamental reports from the Euro zone. The length of the consolidation range would equal to the breaking point whenever it does penetrate this resistance levels. The mid-term outlook would be such move higher will eventually phase out and move back to its original long term down trend that may take some time for an actual trend reversal.
However, the commonality amongst these three majors pairs is that they have mainatined their respective prices above their 21day moving averages. Although, momentum have lost ground, expect volatility to improve once volumes builds-up.
