Key Economic Data - Coming Up Today (All Times GMT+3)
The EURUSD opened up with a gap higher at the open of the new week. After closing on Friday at 1.2624 the price re-opened at 1.2650 and rose as high as 1.2698. The price has since corrected to the 1.2655 mark ahead of today's important Euro group Meetings. Today there is likely to be lower volume than normal due to Bank Holidays in the US, Canada and Japan. Reduced volume and liquidity can often lead to unusual price activity and price patterns. This is an important week for the EURUSD after the pair managed to fight back from the 1.2500 level. Following a recent run of continual declines in the pair this rebound opens up the possibility of a change in trend. Holding above 1.2500 is imperative in building an upside breakout. A break below 1.2500 will signal a continuation of the recent downtrend. Tomorrow is heavy on economic data, the highlight of which will be the German ZEW Economic Sentiment at 09:00 GMT. At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish.
EURUSD Support areas include 1.2600 1.2500, 1.2425, 1.2300. Resistance levels above are at 1.2700, 1.2800, 1.2900, 1.30 figure level, followed by 1.3165.
EURUSD 15 Min Chart
EURUSD 4 Hour Chart
Our recent forecast of an imminent decline in the USDJPY has unfolded perfectly. Several weeks ago we had discussed that the USDJPY was up 10% in less than two months and was set have a significant correction. The only question that we had was from which level the price correction would occur, and of course this is a critical factor in making a profit. Eventually we were able to combine several elements to identify when the correction would begin. Including observing a divergence of price compared to other pairs. Failure to make a new high on positive news and economic data and technical analysis with the use of the Head Shoulders. The USDJPY dipped as low as 107.07 this morning and is at 107.37 at present. Our forecast of a decline occurred at 109.90. Please see our commentary below:
"The USDJPY reached 109.90 during the USD rally that followed the US NFP. The USDJPY had reached above 110 on Oct 1st and made a sharp pull back to 108. Once the good employment data was released the pair rose sharply but could not exceed previous higher, forming what appears to be a classic head and shoulder formations on the H1. The ominous sign in the chart is that the right shoulder is lower than the left and strengthening the case further is the fact that EURUSD, GBPUSD, AUDUSD, USDCHF and Gold all made new lows, but the YEN did not. If the pair goes below 109 and consequently 108.40 then this could signal a possible reversal pattern. The pair is around the 109.37 and the 108.40 support level remains key.
Here is Wednesday’s analysis: 08.10.2014
The decline from 109.37 to 108.40 occurred on Monday as seen in the M15 chart, and consequently broke through the key 108.40 level. Now we anticipate a further pullback on the USDJPY.
The pair has a very important pivot point at 108.40, it has now turned to a short-term downward bias. As long as the pair holds below 108.40 the bias remains down. A concerted break above this level could shift the pair back into an uptrend. Today is a Bank Holiday in Japan.
Support levels for USDJPY can be seen at 107.00, 106.00, and 106.50. Resistance to the upside at 108.40, 109.25, 110, 111, 112, 113.
USDJPY 15 Min Chart
USDJPY 4 Hour Chart