2-month gain since July lows changes the trend of the pair to a bullish one

1.27 which is the early low in January this year is a pivotal point. The chart captures the sentiment of the currency pair into two distinct segments:

• early bullishness when the market tried for 1.35
• bearishness after May when the pair nearly fell as low as 1.20.

Traders following this setup logicaly decides to continue going long as it would be foolhardy to short until a clear bearish reversal pattern emerges or until the blue trendline is broken.

In the weekly chart, EURUSD still below 5-year trendline and near 2011- low

A line chart of the pair in the weekly view shows a different picture. Once we take away the noise (line charts capture the closing price of each week only; highs and lows become background noise while the close is the conclusion between bulls and bears), the chart reveals a 5-year trendline that shows the pair in decline much of the time despite volatility. At current level of trading, price remains:

• Below the 5-year trend
• Still at 2011- lows
• Perched near to 2012 opening at 1.2938

 

Weekly chart prints an unhappy pair that has lost ground since 2008

 

In short the picture tells us that EURUSD remains in a long term decline, at last year low and has not gained ground in nearly 10 months of trading this year.

 

Traders choose sides

For short term scalping and swing trading, traders may choose to ignore the weekly chart. In fact, trend changes start from the smallest reversal in the lowest timeframe. So that consolidation triangle in the daily chart could be the primer for price to start blasting Northwards. However a failure here could bring traders positioning quickly for the short side. And in another attempt to move South, bears would be looking to cross 1.20 solidly this time.

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Traders trading USDCAD according to range likely to be bullish

Based on this big picture, the pair is very likely oversold or near to support. Unless market forces the pair to trade below the lower trendline significantly, currency traders looking closely at the current risk-reward proposition are  likely to go long.

When we get down to the short time picture using the 4-hourly chart, it is necessary to note that the pair has been dropping since June

Buyers have to juggle:

• Signs of reversing the 4-month trend
• Prices gained for 3 weeks since mid-September
• Bullish expansion would be a strong signal
• There are many resistances to overcome but there is plenty of upside if big-picture stays true to the equidistant channel
• Once price falls conclusively out of the channel, the setup fails

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- New lows since the pair started to make y-o-y losses  since 2009
- Remains below 2011 low and negative for the year 2012
- Bullish reversal pattern not evident

EURAUD finds resistance despite rally; long term direction remain downtrend

 

Short term bulls retain control

Bears need to remain steady until a clear trigger appears. In the daily chart, momentum remains steep and while it is likely to retrace may not reverse immediately. Fridays closing action suggests that price has found support in early September high.

First down-week in six but EURAUD continues to appreciate

Short term traders may continue to enjoy the upwards momentum but mind the overhead.

 

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http://www.terraseeds.com/blog/2012/09/euraud-finds-resistance-in-weekly-chart-long-term-trend-remains-bearish/

The pendulum has now swung the other way and is likely to persist or even widen with the chart of EURAUD remaining in trending mode.

Euro weakens against the Aussie Dollar after peak strength in 2008

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http://www.terraseeds.com/blog/2012/09/aud-makes-gain-against-eur-since-2010-at-peak-strength/

A decade of Gold rally

Little did many other people know (including Singaporeans) that the SingDollar has also had a wonderful bull run against the USD since 2002. What’s more, the Singapore Dollar’s gain was not marred by the kind of volatility that AUDUSD and NZDUSD went through between 2008 -2009.

We are looking at a high for the USD per unit trading to 1.8315 SingDollars in 2001, the latter strengthening to 1.1986 in August 2011.

Singapore Dollar makes gains from the USD

Without a bullish reversal pattern, the run is likely to continue.

Possessing a small export driven economy that also imports almost all of its raw materials and necessities, the nation is walking a tight rope. On one hand an appreciating currency is causing the nation to lose its export competitiveness. On the other hand, imported inflation threatens the way of life in the country.

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Symmetrical triangles are usually associated with continuation patterns

Among chart patterns, symmetrical triangles are usually associated with continuation ones. Once the consolidation is over, price is expected to move higher in line with the previous 2009 – 2011 trend.

There is more. Inspection of long term charts reveal that this continuation pattern sits top multi-decades high in 2008 (see X). This level acts as support. If the trend is able to continue, AUDUSD should trade at exciting levels soon.

AUDUSD prints continuation pattern atop multi-decades high

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NZDUSD bears are licking their lips in anticipation of a similarly punishing move after the announcement of the RBNZ Official Cash Rate this Thursday.

In a replay of AUDUSD charts before, the appearance of a channel/head and shoulders formation visible in the H4 and Daily charts do not portend a positive outcome. The risk-off mood right in the beginning of this week does not help either.

Ill-omened charts for NZDUSD

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Testing and failing at 2011-high

A failure here could convince segments of the financial market that the US stock index is unable to make further gains.

If past years were any guide, a meaningful correction could start soon.

Reversion to previous trendlines

 http://www.terraseeds.com/blog/2012/07/dow-fails-second-try-at-2011-high/

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- EURO minimum bid rate announced at Singapore time 7.45pm
- ECB press conference held at Singapore time 8.30pm
- Forecast 1%
- Outcome no change

Prior to news, EURUSD near previous low

Statements made at ECB press conference by President Mario Draghi sends EURUSD rebounding from previous week low but not enough for reversal.

Market knee jerk after ECB statements set precedence for resistance

On hindsight, market probably reacted in a knee jerk response to statements as price stops at previous intraday resistance. This level is subsequently verified as resistance on Friday after US releases non-farm employment change and unemployment rate.

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1. RBA cash rate announced at Singapore time 12.30 pm
2. RBA rate statement at same time
3. Expected 4.00% from 4.25%
4. Outcome 3.75%

AUDUSD at resistance so risk-reward clearly for shorting

 

 

Hourly chart shows AUDUSD breaking down a short term trend line

 

 

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