SunbirdFX Weekly analysis 29.08.2011
The previous trading week ended with sharp risings of the US stock markets, but hurricane "Irene" is threatening to disturb the incoming week. Investors and analysts expected during the past week for Bernanke's speech, and his urgent steps to deal with the crisis. They figured that the markets would crash if he did not come up with new ideas. However, Bernanke did not show anything new, and by doing that he sent a calm message to the markets, which reacted with 5% of climbing.
There are some technical signs for a possible end of the recent plunges, though it is possible that the markets are just catching their breath. The up-corrections are sharp because the declines were sharp as well. NASDAQ has a double-bottom pattern in its daily chart, at 2035 points. The technology index closed the gap that was opened around 2180 points. The S&P 500 is starting to show a "higher lows" pattern, which is a positive sign for the markets. If the indices successfully break through last-week-high, then it might be the beginning of an uptrend. However, the weekly charts are showing "bear-flag" patterns that suggest that we might visit the lows again.
EUR/USD
This pair will be influenced this week by many important news such as Trichet's speech, FOMC meeting minutes and the non-farm payrolls data. The EUR is moving in a narrow strip, and though it seems like it is stamping, there is an important element that you must notice. Most of the time, there is a reverse correlation between Wall Street and the Euro. It means that the Euro rises when stocks are falling (and the opposite). This correlation does not occur 100% of the times, but it helps us to realize that the EUR is stronger than it seems. Despite the fact that the Euro did not make any significant change in the past few weeks, the fact that it did not shed many points during the sharp declines in the US, indicates that powerful buyers (institutional) are supporting this currency. The Euro can start a very strong momentum because of that, if the stocks rise.
The current resistance is at 1.45, which the EUR has had difficulties in breaking for several weeks. A strong break-up can lift the currency to 1.47 and might try to retest the pick at 1.50.
USD/GBP
The pound was surprisingly weakening during past week, after showing an impressive strength in the weeks before. Despite the sharp correction, the GBP keeps on the "higher lows & highs" pattern in its daily chart, and therefore the general trend is still bullish. A break-down of last-week-low at 1.62 will be a negative signal for the pound, which might dive to the 200 SMA at 1.61. However, if it crosses above the high at 1.64, it might bring back the buyers to the game and rise to 1.66.
Today (Monday) is a holiday in Britain, and therefore low volumes are expected in this pair. Important data of the real estate and manufacturing status is published this week in GB.
USD/JPY
The Japanese currency keeps tricking its traders. The false-break at 76.0 stressed the sellers, who lifted the USD to 77.7, but the professionals did not wait longer and got back to the game at these levels. The JPY closed the week near 76.0 and caused great loses for those who believed that the USD was about to get stronger against the JPY. The question now is how the Yen will deal with the support at 76, as the chances for successful break-down are higher after the "shake-out" of the amateurs. A break-down at 76.5 will support this estimation, and the JPY might hit 75.0 if it does break.
http://sunbirdfx.com/daily-analysis
Warning: Remember, that the prices of shares and other investments can fall fast and you may not get back the money you originally invested. The material here is for general information only and is not intended to be relied upon for individual investment decisions on real cash trading accounts. Take independent advice before making such decisions.
The previous trading week ended with sharp risings of the US stock markets, but hurricane "Irene" is threatening to disturb the incoming week. Investors and analysts expected during the past week for Bernanke's speech, and his urgent steps to deal with the crisis. They figured that the markets would crash if he did not come up with new ideas. However, Bernanke did not show anything new, and by doing that he sent a calm message to the markets, which reacted with 5% of climbing.
There are some technical signs for a possible end of the recent plunges, though it is possible that the markets are just catching their breath. The up-corrections are sharp because the declines were sharp as well. NASDAQ has a double-bottom pattern in its daily chart, at 2035 points. The technology index closed the gap that was opened around 2180 points. The S&P 500 is starting to show a "higher lows" pattern, which is a positive sign for the markets. If the indices successfully break through last-week-high, then it might be the beginning of an uptrend. However, the weekly charts are showing "bear-flag" patterns that suggest that we might visit the lows again.
EUR/USD
This pair will be influenced this week by many important news such as Trichet's speech, FOMC meeting minutes and the non-farm payrolls data. The EUR is moving in a narrow strip, and though it seems like it is stamping, there is an important element that you must notice. Most of the time, there is a reverse correlation between Wall Street and the Euro. It means that the Euro rises when stocks are falling (and the opposite). This correlation does not occur 100% of the times, but it helps us to realize that the EUR is stronger than it seems. Despite the fact that the Euro did not make any significant change in the past few weeks, the fact that it did not shed many points during the sharp declines in the US, indicates that powerful buyers (institutional) are supporting this currency. The Euro can start a very strong momentum because of that, if the stocks rise.
The current resistance is at 1.45, which the EUR has had difficulties in breaking for several weeks. A strong break-up can lift the currency to 1.47 and might try to retest the pick at 1.50.
USD/GBP
The pound was surprisingly weakening during past week, after showing an impressive strength in the weeks before. Despite the sharp correction, the GBP keeps on the "higher lows & highs" pattern in its daily chart, and therefore the general trend is still bullish. A break-down of last-week-low at 1.62 will be a negative signal for the pound, which might dive to the 200 SMA at 1.61. However, if it crosses above the high at 1.64, it might bring back the buyers to the game and rise to 1.66.
Today (Monday) is a holiday in Britain, and therefore low volumes are expected in this pair. Important data of the real estate and manufacturing status is published this week in GB.
USD/JPY
The Japanese currency keeps tricking its traders. The false-break at 76.0 stressed the sellers, who lifted the USD to 77.7, but the professionals did not wait longer and got back to the game at these levels. The JPY closed the week near 76.0 and caused great loses for those who believed that the USD was about to get stronger against the JPY. The question now is how the Yen will deal with the support at 76, as the chances for successful break-down are higher after the "shake-out" of the amateurs. A break-down at 76.5 will support this estimation, and the JPY might hit 75.0 if it does break.
http://sunbirdfx.com/daily-analysis
Warning: Remember, that the prices of shares and other investments can fall fast and you may not get back the money you originally invested. The material here is for general information only and is not intended to be relied upon for individual investment decisions on real cash trading accounts. Take independent advice before making such decisions.