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October 7th, 2014, 8:13 am | By trader | Published in LUNCH IS FOR WIMPS | Comments on this postComments Off

Just recently, the U.S. dollar remained within range against major currencies, registering considerable gains against the AUD and JPY while spotting a minor weakness against the EUR and GBP.

Last week, the U.S. Dollar was able to resume with its upward course against most major currencies, as investors prepared for a slew top-tier economic release which would include the closely watched U.S. NFP data and ECB monetary policy decision later during the recently concluded week. Below are the technical updates on some vital major currency pairs namely; GBPUSD, EURUSD, USDJPY and AUDUSD.


Following the rise above the 1.6500 level, the pair reversed and dropped back below the 1.6200 mark, confirming the emergence of a strong resistance near the 1.6270-80 area which represents 38.2 % Fib. retracement level of July 2013 to July 2014’s massive move. This level now appears to act as a short-term cap for the pair and only a decisive move above this strong resistance level could apparently negate the short-term bearish outlook for the said pair.


After the release of the Euro-zone flash CPI reading, the pair significantly dropped, breaking below the 1.2600 mark hitting a fresh 2-year low. The pair, however, appears to find some support near the 1.2600-1.2580 area, which coincided with the lower trend-line support of a descending trend-channel formation on a four-hourly chart. The failure to hold this pressing support area would appear to accelerate the downfall immediately towards 1.2550 horizontal support zone which could possibly extend until 1.2500 round figure mark support.


The pair has been very consistent over its fresh 6-year high and is now aspiring for 110.00 psychological mark resistance, representing 61.8 % Fib. expansion level considering that the pair’s strong drive would likely break pass the 110.00 resistance which could reached 111.00 mark corresponding with 100 % Fib. expansion level.

On the negative aspect, 109.00 mark is regarded as a critical level to watch out for, which if broken could possibly trigger some profit taking move initially towards 108.40-30 horizontal support and back towards the 107.40-30 support area respectively. Moreover, only an influential move below the 107.40-30 support area could possibly halt the continuation of the forward movement for the said pair.


The pair has fallen relentlessly during the month of September and has dropped to its lowest level since February of 2014. However, in the start of the short-term the pair might find itself being supported near 0.8650-40 area which will mark the lower trend-line support of a descending trend-channel formation on a 4-hourly chart.

Nevertheless, a closing below 0.8750 area last week, marked the lowest monthly closing in 2014, which would indicate continuation of the weakening trend towards 0.8500 mark in the near-future. On the positive aspect, 0.8770-80 zone was represented by the upper trend-line resistance of the short-term descending channel appears to provide some sort of relief for the pair. Furthermore, a critical move above this immediate resistance might give some relief rally for the said pair, even beyond 0.8800 mark towards the stronger resistance zone.

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