After more than two weeks of downside movement the EUR/USD pair is in annual minimum and being pushed down to break his weekly uptrend line. We can see in the second graph below.

At the technical level we see the euro recovered positions after reaching 1.2680 at the minimum of the day so far. This level coincides with the third support weekly. We believe that before further envisions acid as I could have, if the situation of Greece does not end, it may fall to 1.18.

However, in these current levels we recommend to buy, at least to close the two gaps that the euro had left around 1.3150.

Technically, the crossing EUR / USD was violated a trendline on the weekly chart, from June 2010 in the last hours. This sounds alarming for those who rely on a quick recovery of the single currency.
The chart above shows the breakdown.

The USD/CAD pair's 4H Chart revealed the strong bearish rejection of price level 1.0050 which pushed the USD/CAD pair to the downside towards 0.9990.

The lower limits of the Violet & Blue channels at 0.9990 were tested providing strong support for the USD/CAD pair.

Bullish rejection towards 0.9990 allowed the USD/CAD to initiate a new bullish swing towards 1.0125 establishing a significant support level at 1.0050.

The 1Hour chart of the USD/CAD isn't quite clear as the pair managed to breakthrough the upper limits of its movement channels then came back to trade inside them.

Price Level 1.0033 is important on the 1HChart as it corresponds to the lower limit of the Violet channel & the mid-line of the Yellow channel where price action should be watched for a possible BUY entry.

It's important to note that the pair has an Intraday Resistance level at 1.0090 which corresponds to the upper limit of the Yellow channel.

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The Australian dollar recovers positions after having yielded to the lower to the level of daily fractal 0.9870 area which coincides with the second weekly support level. Considering that  the U.S. dollar is weakening in all the fronts, we recommend buying the the AUD / USD pair with goals in the next fractal around 1.0153.

The MACD and Momentum indicator are showing a strong upward bounce.

A new chapter in the political and economic crisis affecting the old continent began with the announcement of Greek call for new elections due to the impossibility of forming a government which has led to the decline of the euro on Tuesday. This current recovery could be extended for a few hours but without any medium and long term prospective.

Technically, the EUR / USD pair movement looks alarming for those who rely on a quick recovery of the single currency. Something similar happens on the GBP / USD daily chart in which the price broke a trendline on the daily chart but is also very strong. In both cases the European currencies could continue their downward path for a long time, beyond recovery which can take place in the U.S. session on Wednesday.

The yen is looking strange as well in the last hours as it crosses EUR / JPY and GBP / JPY literally flying from one direction to another expanding its range of prices to hundreds of points.

The situation will stabilize in the near future, no doubt. But markets tend to overstate the case; the Greek crisis, after a nation of little weight in the European concert, serves as a trigger to move markets giving the impression that the euro is at risk again. Not very far from reality. Since the area of 0.80 was extended to almost 1.30, the stretch is too great to underestimate a coin and Germany as support, followed closely by powers such as France, Spain and Italy, although they are in crisis.

The news of the day calendar, which showed a diffuse 1.6% inflation in the euro area (with the block divided between rich and poor south north; I really do not know if this is good or bad), oil inventories 10:30 (you can move the Canadian dollar and Mexican peso in shape), and the FOMC Minutes at 2:00 PM, all in the United States.

EUR/USD Elliott Wave
For the last two weeks the EUR/USD pair has been developing 3 wave (coloured blue) of the bigger wave (3) (coloured green). Yesterday the EUR/USD pair was trading in a downward movement. During the European session we could observe the ascending movement towards the 1.2865 level. Therefore during the New York session the EUR/USD did not manage to hold this level and price started pushing lower reaching 1.2720 level (daily low). Today during the Asian session the price continue trading in a bearish mood reaching 1.2680 level.We can consider this move as end of the 3 wave (coloured pink). Presently we can observe 3 impulsive wave. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (1.3380-1.2993-1.3282) with Take Profit 1 at 1.2600 (161.8% of wave 1). The resistance point at 1.2750 level can be used as Stop Loss. Also it is necessary to consider the data concerning the U.S Building Permits, Housing Starts, Capacity Utilization Rate, Industrial Production m/m, Crude Oil Inventories,FOMC Meeting Minutes that can affect the rate of the pair.

Support and Resistance levels
(S3) 1.2625 (S2) 1.2681 (S1) 1.2716 (PP) 1.2772 (R1) 1.2828 (R2) 1.2863 (R3) 1.2919

Trading Forecast
Proceeding from Elliott Wave Rules this week the trend is expected to begin the downward movement. That is why Short positions at level 1.2700 with Stop Loss at 1.2750 and Take Profit at 1.2600 are recommended.

USD/CAD Elliott Wave
Yesterday the USD/CAD pair was trading in an upward movement. During the early European session we could observe the descending move towards the 0.9992 level. The USD/CAD pair did not manage to hold this level and price start pushing slightly higher during the second half of European session.Therefore during the New York session the USD/CAD pair test 61.8% level of wave 1 at 0.9990. We can consider this move as end of the 2 wave (coloured blue). After we saw end of the 2 wave price started pushing higher in the 3 wave and reached new daily high at 1.0070 level. Today during the Asian session we could observe the continuation of the bullish mood and price touching 1.0130 level. Presently we can observe end of the 3 wave. In accordance with our wave rules and taking into account that the wave 3 retraces 261.8% of the wave 1, we can define the potential targets with Fibonacci extensions (0.9953-1.0050-0.9990) with Take Profit 1 at 1.0179 (200% of wave 1) and Take Profit 2 at 1.0238 (261.8% of wave 1). The support level at 1.0080 level can be used as Stop Loss. Also it is necessary to consider the data concerning the U.S Building Permits, Housing Starts, Capacity Utilization Rate, Industrial Production m/m, Crude Oil Inventories,FOMC Meeting Minutes and CAD Manufacturing Sales m/m that can affect the rate of the pair.

Support and Resistance levels
(S3) 0.9960 (S2) 0.9992 (S1) 1.0012 (PP) 1.0044 (R1) 1.0076 (R2) 1.0096 (R3) 1.0128

Trading Forecast
Proceeding from Elliott Wave Rules this week the trend is expected to begin the upward movement. That is why Long positions at level 1.0120 with Stop Loss at 1.0080, Take Profit 1 at 1.0179 and Take Profit 2 at 1.0238 are recommended.

• Strong Support: 0.7530.
• Strong Resistance: 0.7718 & 0.7930.

Trading Recommendations:

According to previous events the price is expected to remain between 0.77 and 0.7930 levels.

• Buy-deals are recommended above 0.7535 with the first target seen at 0.7625. The movement is likely to resume to the point 0.7675 and further to the point 0.772.
  
• The decending movement is likely to begin from the level 0.7720 with 0.76 and 0.7535 seen as targets
  

Overview:

The NZD/USD pair is expected to continue the movement from the point 0.7531 (11% of Fibonacci retracement levels on the Daily chart). Thus, kiwi shows the signs of strength, following the breakdown of the highest level 0.7933. This fact can be considered as a good signal for BUY-deals above the point 11% of Fibonacci retracement levels on the H4 chart with the first targets 0.76 and 0.772 (it will act as a strong resistance level and considered as appropriate for Take Profit orders). It is necessary to mention that this level will coincide with 23.6% of Fibonacci (0.772). However, in case of the reverse movement and if the NZD/USD pair fails to break through the resistance level 0.772, the market will further decline to the 0.754 level, indicating a bearish mood.

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In the beginning of the month,the GBP/USD pair has broken the lower limit of its bullish channel. Since then it has been downtrending within the depicted bearish channel.

Yesterday the GBP/USD pair showed siginificant bearish swing breaking-down the significant support / prominent Intraday buttom around 1.6050 opening the way for a quick decline towards 1.5960-1.5940 which is considered as a strong support zone that determins the next target.

Bullish stabilization above 1.5960-1.5940 enhances the bullish retracement towards 1.6050. However, its breakdown will lead to another decline towards 1.5895 and 1.5860.

Price Level 1.6050 is considered to be valid SELL entry as it corresponds to the upper limit of the ongoing bearish channel & previous broken support level.

SL should be located above 1.6120 while TP levels are to be located at 1.6015, 1.5975 and 1.5930.

4H

General picture:
On May 16 the USD/CHF pair continues the ascending movement and elaboration of Golden Cross; Stochastic and MACD point at further growth of the price. The current signal for Buy-deal is confirmed and strong, as Chinkou Span is fixed above the price chart and the price is located below the Ichimoku Cloud. Therefore, targets for ascending movement are seen at the third resistance level 0.9451. In case it has been passed through, new target for bullish trade – the resistance level of the bigger timeframe 0.9466 which is almost equal to the previous target – will be available. The ascending movement remains the same as long as the price is higher than the Kijun-Sen (0.9355). While bullish trade below this line it is recommended to place the Stop Loss. Also when the price goes lower than this line, the signal for Buy-deals will weaken and the further elaboration of the ascending movement will be questioned. Chinkou Span is located above the price chart confirming the current signal for Buy-deals and indicating the bearish mood on the USD/CHF market. Bollinger Bands shows the continuation of the ascending movement, lines are expanding and directed upwards, so it is recommended to consider long positions. MACD is directed upwards indicating the current upside movement but presently the Stochastic is more important as it is located in the oversold area.

Trading recommendations:
On USD/CHF market it is recommended to consider long positions with first target seen at the 0.9451 level. When the price passes this level through, the target for Buy-deals will be seen at the 0.9451 level. When this level is passed through, the target for Buy-deals will be seen at 0.9466. Stop Loss is to be placed below 0.9355. In case this line goes higher, Stop Loss can be placed after it. It is recommended to reduce long positions manually in case the Stochastic leaves the overbought zone. With 50-60 pips of profit Stop Loss can be placed into the zero area. Take profits are to be placed a bit higher than the target levels (10 pips approximately) 0.9440 and 0.9455.

Apart from technical picture it is necessary to consider the fundamental data and the time of its release.
Ichimoku Indicator:
Tenkan-Sen – red line
Kijun-Sen – blue line
Senkou Span A – light brown dotted line
Senkou Span B – light blue dotted line
Chinkou Span – green line
Senkou Span B – violet dotted line
Bollinger Bands:
3 yellow lines
MACD Indicator:
Red line and the histogram with white bars in the indicators window.

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My Blog with additional information to the analysis.

Wave marking analysis:
In the course of yesterday’s trades the USD/CHF continued the ascending movement and have fixed above the level of figure 94 by the end of the day. The whole upward wave structure became more complicated supposing the further growth of quotes towards the point 0.9500 or even the early year’s highs (0.9600). If that proves to be so, then we can assume that targets for the wave 3 in 3 (in 3 or C) correspond to the point 0.9460.

Targets for the option with the wave 3 in 3 or C:
0.9459 – 161.8% of Fibonacci

Targets for the option with the beginning of new descending part of the trend or wave 4 in 3 or C:
0.9363 – 100.0% of Fibonacci
0.9326 – 76.4% of Fibonacci

General conclusions and trading recommendations:
At the moment the new upward part of the trend continues its formation within the wave 3 or C. The target for current growth is seen at the 0.9459 which corresponds to 161.8% of Fibonacci. On the smaller level the wave 3 in 3 continues its formation. When this wave is finished, the quotes may descend towards the levels of 0.9363 and 0.9326 indicating the formation of new downside part of the trend or even completion of the wave 4 in 3 or C. it is necessary to mention that the current wave marking may need corrections as there are some contradictions resulting from the last week’s gap, that has not been filled.

At the moment the spot rate is testing the intermediate resistance of its medium term bearish channel at 102.90 and is likely to decline. However, a breakdown of these levels will release significant potential and enabling to reach its upper limit in 104.20.

Technical indicators provide sellers signals but as long as the resistance is unbroken, the assumption of a decline is relevant. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.

Proceeding from previous events the market will provide a bullish opportunity as soon as the spot rate has broken through its resistance of 102.90 with the 1st objectives seen at 103.50 and 103.70 levels. In case the level 102.70 is passed through, the proposed scenario will be cancelled.

Gold is currently testing the intermediate support of its medium term bearish channel at 1,530 and is expected to rebound. However, a break through this level will trigger a decline to the lower limit – 1,512.

Technical indicators do not provide clear signals but evolving in oversell zone supporting the assumption of a pull back. Bollinger bands are much discarded due to strong recent increase. The situation is expected to stabilize in the nearest future. 

According to previous events the market will provide a bullish opportunity at the level of 1,530 with 1,545 and 1,550 seen as first objectives. A break through 1,527 will alter this scenario.

The spot rate has broken the lower limit of its medium term bearish channel at 1.5990 resulting in an acceleration. A pullback on these levels is expected  before a resumption of bearish movement.

Technical indicators do not provide clear signals but evolving in oversell zone confirms the assumption of a pull back. Bollinger bands are much discarded due to the strong increase that took place these days. The situation is expected to stabilize in the nearest future.

Considering previous events the market will provide a bearish opportunity at the level of 1.5990 with the 1st objectives seen at 1.5930 and 1.5910 levels. In case the level 1.6020 is passed through, the proposed scenario will be invalidated.

Presently the downside targets are Fibonacci retracements of 130.71-127.76, 131.75-127.76 and expansions 127.76-129.32-127.97.

Resistances:

- 128.93 = contracted objective point (COP)
- 129.53-58 = confluence area of objective point (OP) and .618 retracement
- 129.76 = .50 ret
- 130.23 = .618 ret

The downside targets are Fibonacci expansions of 131.75-127.76-129.32, 130.71-127.76-129.32, 129.32-127.97-128.71.

Supports:

- 127.98 = COP
- 127.50 = COP
- 127.36 = OP
- 126.85 = COP

Overbought/Oversold

The bigger wave is now moving down, so it is preferable to try short positions when the Detrended Oscillator goes above the zero level (10-15 pips above the current prices) or into the overbought area (30-40 pips above the current prices). Consider the opportunities to go short at or near the indicated resistances.

Read more on how to trade with Fibonacci levels.

The downside targets below are Fibonacci expansions of 1.0473-1.0110-1.0219, 1.0219-1.0020-1.0142, 1.0142-0.9944-1.0014, 1.0014-0.9921-0.9948.

Supports:

- 0.9892-91 = confluence area of two contracted objective points (COP)
- 0.9856-55 = confluence area of two objective points (OP)
- 0.9820-16 = confluence area of expanded objective point (XOP) and OP
- 0.9798 = XOP

If the price reverses to the upside, the immediate resistances will be Fibonacci retracements of the wave down from 1.0219 - this wave is not completed yet, so resistances are not available.

Overbought/Oversold

The larger wave is now moving down, so it is prefereable to go short when the Detrended Oscillator goes above the zero level (10-15 pips above the current prices) or into the overbought area (25-35 pips above the current prices). Consider the possibilities to go short at or near the indicated resistances.

Read more on how to trade with Fibonacci levels.

The spot rate is approching the lower limit of its medium term bearish channel at 1.2700 and is likely to rebound. A breakdown of these levels will release significant potential and initiate a more violent bearish trend.

Technical indicators provide buyers signals and evolvment in the oversell zone confirms the assumption of a rebound. Bollinger bands are much discarded dueto the strong increase that took place these days. The situation is expected to stabilize soon.

According to previous events the market will provide a bullish opportunity at the level of 1.2700 with 1.2760 and 1.2780 seen as first objectives. A breakdown of 1.2670 will alter this scenario.

Technical Outlook and chart Setup:

As depicted above, yesterday a hanging man pattern was formed. Keeping this is mind, we can suggest that the single currency may retrace down 1.4950/1.5000 levels before moving towards our first upside extensions towards 1.5200. It is suggested to use this dip as a buying opportunity for bulls to target new highs in coming sessions. Support remains fixed at 1.4800 (past resistance) and 1.4900 (candlestick lows) levels. The overall wave structure remains constructive for bulls.

Trade Recommendations:

Buy-deals around 1.4700; stop at 1.4900 with 1.5200 and 1.5400 seen as targets.

Good Luck !

Technical Outlook:

As shown above  the single currency has met its first downside extension (support) at 102.04 as it was expected. The overall outlook still remains bearish and positional traders should target 100.50 levels in coming sessions. 1H charts are looking a bit stretched in the oversold area, hence a pullback is expected towards 103.50/104.00 levels, where the dropping trendlineis drawn. It is recommended to book partial profits and wait for another chance to sell from above levels.

Trade Recommendations:

Sell-deals around 104.00/104.50 levels, stop at 105.50 with 100.50 seen as target. Book Partial Profits for now and re-enter shorts around 103.50/104.00.

Good Luck !

TODAY's   TECHNICAL   LEVEL :

Breakout BUY Level : 1.2794.

Strong Resistance : 1.2787.

Original Resistance : 1.2775.

Inner Sell Area : 1.2763.

Target Inner Area : 1.2733.

Inner Buy Area : 1.2703.

Original Support : 1.2691.

Strong Support : 1.2679.

Breakout SELL Level : 1.2671.

DESCRIPTION :

Today the EUR/USD pair has support and resistance at 1.2691 and 1.2775 and is accompanied by strong support 1.2679 and resistance 1.2787 level.

If the EUR/USD pair breaks through and closes below a 1.2671 level today, then this will indicate considerable bearish strength, while if the EUR/USD is able manages to break through and close above a 1.2794 level, then this will denote high bullish strength. It is possible to trade otherwise by opening BUY positions at the level of 1.2703 and SELL positions at 1.2763,provided that both targets are located at the level of 1.2733.

Best regards,
Arief Makmur
Official Analyst of InstaForex Companies Group
InstaForex Companies Group
http://instaforex.com
Yahoo Messenger & Skype : Arief.ifx_jakarta
Gtalk : Arief.ifx.jakarta

TODAY's   TECHNICAL   LEVEL :

Resistance. 3 : 80.79.

Resistance. 2 : 80.63.

Resistance. 1 : 80.47.

Support. 1 : 80.28.

Support. 2 : 80.12.

Support. 3 : 79.96.

DESCRIPTION :

Please consider support 3 (79.96) and resistance 3 (80.79) levels. In general, when a level has been reached, the USD/JPY pair will rebound from the previous minimum by 10 to 20 pips, but if the levels are broken through by over 50 pips, then it will be a sign of that these currencies have found today's trends.
 

Best regards,
Arief Makmur
Official Analyst of InstaForex Companies Group
InstaForex Companies Group
http://instaforex.com
Yahoo Messenger & Skype : Arief.ifx_jakarta
Gtalk : Arief.ifx.jakarta

Weekly Pivot Point: 1.0045.

Overview:

The market will continue showing strength by going to the level 0.9940 (11% of Fibonacci retracement levels - Daily chart). Therefore, the USD/CAD pair's resistance was broken and turned into support a week ago (on the 7^th of May, 2011); the pair has already formed a strong support at the level of 0.9940. So the market indicates a bullish opportunity at level 0.994 with 0.9995 seen as first objective and continues its movement towards 1.0040 and further to 1.0075. However, if the trend does not manage to break through and close above the level 1.008, then a downside momentum will begin which is rather convincing. The structure of the downfall looks as non-corrective, for that the market will indicate a bearish opportunity at 1.008, hence it will be a good sign to sell at this level in order to continue the downward movement towards 0.9935.

Trading Recommendations:

According to previous events, the price remains between 1.0080 and 0.9900.

• Buy above 0.9940 with target at 0.9995 then 1.050.
• Consider the downside movement below 1.0075 with target seen at the 0.9935 level.

Observation (s):

Please check out the market volatility before investing, as the sight price may have already been reached and scenarios invalidated.

Key level at 1.0075.

The pair will probably experience the same at this level.

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The Australian dollar  has stopped its weekly drop near the support level of 0.9951 which is considered as very strong, as depicted on the graph. From this level strong rebound to the upwards is expected.

Considering these facts and this strong support area, we recommend buying at current price levels with targets in the weekly resistance zone around 1.0153

Indicator of Momentum and MACD are showing a strong upward Correction.

 This morning during the American session, the euro fell sharply around the second weekly support area mainly due to the problems in Greece as the political parties fail to agree on a coalition government which in turn  caused a strong opposition to the austerity measures demanded by the country's multilateral lenders.

On a technical level we observe a very strong fractal formed at the level of 1.2767; this dynamic fractal serves as a support level. We believe that this level around the fractal is a good place to go with the upward bounce of the pair or for conservative ones; we can enter by buying only if price closes today's session above 1.2801 weekly support; our goal therefore will be placed over the last gap in 1.3123

The indicator range is showing strong oversold level. The correction of the euro is expected in the nearest future.

The resurgence of European debt crisis is affecting the markets. The euro has dropped in the early Asian session, leaving a gap at 1.2920 against the dollar, which has not yet been filled and added to another one closed last Monday at 1.3085.

The situation in Europe is not clear. On the one hand Spain experiences more difficulties and continues to pay its debts for their indebtedness and social protests that flared up austerity plans imposed by the government which spent cartridges of confidence in their first year of life.

But it benefits two key factors that can tip the balance in the coming months: the last month’s confusion in Greece resulted in a political revolt, as it was expected and prevents the creation of the new post-elected government two weeks ago. In this context Greece looks like the source of political changes. France in its turn can be exploited to overcome the oppression imposed by Germany which forced the Greeks and most of the Europe to impose very harsh austerity plans.

If France stops being a staunch ally of Germany, as we see Chancellor Merkel and most of the world, the outlook for the Europe for this year and next years will be different. In case Germany yields to pressure its neighbors and impose cash injection plans, which can generate growth or inflation, according to the use, the euro will be seriously affected.

If Europe’s plans to inject money in its nations including France, Greece and other politically related countries, a resurgence of inflation is not close due to subsidies. If the public sector is activated, Europe will experience a rebirth later, but it will be sustainable. Once again everything depends on politics, as always.

As for the euro, at the moment no corrections are expected due to the turnaround of the single currency that get high speed along with other hard currencies, such as Swiss franc and the Australian dollar.
The pound sterling remains in a more moderate downward trend, being replaced by the euro although its fundamentals do not forecast a change in trend that is currently imminent.

Yen on the contrary is making use of the crisis being refuge currency for investors. Its late growth reflects the concern of the markets particularly the fact that they engage with the JPY in order to establish as a sort of second dollar.
The observed significant drop in oil also affects the Canadian dollar and Mexican peso, two currencies linked to it. The loonie is far from parity against the dollar which is not surprising: it is expected to reach the point above 1.03. The weight has not undergone significant changes, so the fall is expected in the nearest future towards 13.70.

The depicted chart illustrates the current situation of the GBP/USD currency pair on the 4H timeframe.

The GBP/USD pair is currently testing the lower limit of the almost identical bearish channels around 1.6050 which may constitute a suitable price level for bulls to initiate a bullish swing.

Price Zone 1.6040-1.6060 constitutes a strong support zone for the pair which pushed the pair towards 1.6120 Yesterday failing to maintain higher levels.

Price should be maintained above 1.6040-1.6060.Otherwise, a quick decline towards 1.5960 will probably take place.

Price Zone 1.6140-1.6160 is considered a strong resistance level for the GBP/USD pair for those who look for bearish opportunities.

The Hourly chart gives a similar view for the GBP/USD.

The GBP/USD PAIR has been downtrending within the depicted Blue & Yellow bearish channels for almost three days with bearish breakout below the lower limit of the Violet channel.

The GBP/USD pair is now testing the mid-line of the Yellow & Blue channels around 1.6050 which will determine the next target for the pair.

The GBP/USD pair has an Intraday support level at 1.6000 which corresponds to the lower limit of the bearish Yellow channel and an Intraday resistance level at 1.6090-1.6110 corresponding to the upper limits of its movement channels.