Majors Outlook (13 Aug - 17 Aug 2012)
The EURUSD corrected higher last week at 1.2443, but it faced strong resistance around this level and declined by the end of the week.
According to daily chart, we still have bullish breakout at 1.2400 zones, remember that as long as 1.2165/1.2133 support holds, the bullish breakout is valid and rebound from 1.2402 short term bottom is expected to resume.
A clear break above 1.2400/1.2443 – daily closing is better - is supposed to target 1.2750 (50% retracement of 1.3486 to 1.2042 at 1.2764)!
But in return, a clear break below 1.2165/1.2133 – daily close is better – would mean that rebound from 1.2042 is merely a correction and has completed, In this case the pair should be heading to 1.2000 maybe lower!!!
On the smaller time frames, stability below 1.2300/1.2360 would increase the risk toward 1.2165/1.2133, but a break of 1.2300/1.2360 would increase the risk toward 1.2400/1.2443 even it may pass this level easily!!!
As shown on the weekly chart, the pair has been trading for 10 weeks between 1.5800/1.5200 levels, note that we had bearish breakout on weekly at 1.5733, the week of 13 May 2012, so far the level 1.5733/1.5810 is still protecting the bearish scenario serving as strong resistance “ sell zone “ !!!!
So far, there’s no sign for any reversal in short term but, a clear break above 1.5733/1.5810 with weekly closing above this level , would mean that falling from 1.6300 has finished at 1.5268 , then the pair should target 1.6165 high of the week (30 Oct 2011) where strong resistance is expected to be found around this level !!!
However, a clear break below 1.5268/1.5233 with weekly closing below this level is supposed to resume the long term bearish move testing 1.4800/1.4700 zones...
The USDCHF declined last week but it found strong support around 0.9655 then pulled back to close at 0.9768…..
According to daily chart, we had bearish breakout at 0.9694 zones, remember that as long as 0.9870/0.9900 resistance holds, the bearish breakout is valid and rebound from 0.9971 short term top is expected to resume.
A clear break below 0.9694/0.96655 with daily closing below these levels should target 0.9400 levels!
But in return, a clear break above 0.9870/0.9900 would mean that rebound from 0.9971 is merely a correction and has completed, In this case the pair should be heading to 1.0277/1.0300 ….
As shown on the daily chart, the pair is under pressure since last May 2012, so far the bearish trend is protected by 80.60/81.75 resistance!!!
A clear break below 77.65 would confirm the top at 80.61 and should target 76.00 support , maybe lower, but in return a clear break above 81.72 with daily closing above this level would confirm the bottom at 77.65 , In this case the pair should pass 84.17 levels easily testing 88.00 levels…
I can summarize the USDJPY:
1- Above 81.75 Bullish trend!
2- Between 81.75 / 77.65 Sideways / Bearish (Consolidation)!
3- Below 77.65 Very Bearish trend!
Short term outlook: according to 60 min chart ,the pair is slightly bullish as long as 78.05 holds , a clear break with stability above 78.50 would increase the risk to 80.25 !!!
But in return, a clear break below 78.05 would add strong pressure to the pair and it may pass or challenge 77.65 levels...