EURUSD Forecast: Trendline support broken but not convincingly. Eyes on FOMC today
Posted 11-03-2009 at 10:15 PM by Setyo Wibowo
EURUSD Forecast: Trendline support broken but not convincingly. Eyes on FOMC today
We have a significant technical event yesterday. As you can see in my daily chart below, the trendline support has been violated to the downside, bottomed at 1.4625. This fact should trigger further weakness for the Euro with 1.4450 as technical target, but we need to be very careful here since the pair closed much higher at 1.4716 indicating limited bearish. Every time a trendline support is broken, oftenly price retreat to the upside and testing the trendline area, which is now become a resistance. So, as long as the pair stay below the trendline, expect further bearish scenario.
From h4 chart point of view, as you can see below, indecisive market indicated by range area of 1.4850 – 1.4680 since last week was broken to the downside, but price retreat to the upside and now back inside the range area. This should be seen as a false breakdown for now which is usually trigger significant upside pullback, so please be very patient at this situation. Technically, we need a consistent move below 1.4680 to confirm bearish scenario towards 1.4450 area.
Like I said yesterday, we will have some key fundamental numbers this week. Although it looks like technical movement already a step ahead of fundamental events, we know that these news will be the market mover. Today the FOMC is going to announce the interest rate. While it's more likely that they will leave funds rate unchanged at <0.25%, investor's focus will be at the statement about economic condition. If they give an optimistic view about economic recovery progress, the Dollar should be weaken as risk appetite increase. On the other hand, if they give a pessimistic view, Dollar should gain as risk aversion increase.
GBPUSD Forecast:
The GBPUSD made another volatile but indecisive movement yesterday, convince me that we are in consolidation phase with unclear direction, and we should keep stay away from this pair for now. On h4 chart below we have a triangle formation indicating consolidation. We need a break from the triangle to find clearer direction. A breakout from the triangle should trigger further bullish scenario re-testing 1.6700 even 1.7042 area while a breakdown should lead us back towards 1.6000 area. Immediate support at 1.6380. Break below that area should trigger further bearish momentum towards 1.6260 area. Initial resistance at 1.6488. Break above that area should trigger further bullish momentum towards 1.6700 area.
On fundamental side, beside UK's PMI number today, the FOMC is going to announce the interest rate. While it's more likely that they will leave funds rate unchanged at <0.25%, investor's focus will be at the statement about economic condition. If they give an optimistic view about economic recovery progress, the Dollar should be weaken as risk appetite increase. On the other hand, if they give a pessimistic view, Dollar should gain as risk aversion increase.
USDJPY Forecast:
The USDJPY made indecisive movement yesterday, formed a Doji on daily chart. On my h4 chart below, my minor trendline resistance has been violated to the upside indicating potential upside pullback towards the bullish channel. However, since I prefer a bearish scenario as long as the pair stay below the bullish channel, this situation is a no trading zone for me. My bearish mode will be confirmed only if we have a breakdown below the minor trendline resistance. Immediate resistance at 90.50/70 area. Break above that area should trigger further bullish momentum. Initial support at 89.80 area. Break below that area should support my bearish outlook targeting 88.80 area.
USDCHF Forecast
The USDCHF made a false breakout from my range area of 1.0280 – 1.0166 yesterday, as you can see in my h4 chart below, topped at 1.0337 but closed much lower at 1.0194. It looks like bullish power is still limited and bullish scenario is not confirmed yet as price are now back in the range area. The FOMC meeting today is expected to be the market mover for us to see clearer direction, a valid break from the range area. While it's more likely that they will leave funds rate unchanged at <0.25%, investor's focus will be at the statement about economic condition. If they give an optimistic view about economic recovery progress, the Dollar should be weaken as risk appetite increase. On the other hand, if they give a pessimistic view, Dollar should gain as risk aversion increase.
Have a great day!
We have a significant technical event yesterday. As you can see in my daily chart below, the trendline support has been violated to the downside, bottomed at 1.4625. This fact should trigger further weakness for the Euro with 1.4450 as technical target, but we need to be very careful here since the pair closed much higher at 1.4716 indicating limited bearish. Every time a trendline support is broken, oftenly price retreat to the upside and testing the trendline area, which is now become a resistance. So, as long as the pair stay below the trendline, expect further bearish scenario.
From h4 chart point of view, as you can see below, indecisive market indicated by range area of 1.4850 – 1.4680 since last week was broken to the downside, but price retreat to the upside and now back inside the range area. This should be seen as a false breakdown for now which is usually trigger significant upside pullback, so please be very patient at this situation. Technically, we need a consistent move below 1.4680 to confirm bearish scenario towards 1.4450 area.
Like I said yesterday, we will have some key fundamental numbers this week. Although it looks like technical movement already a step ahead of fundamental events, we know that these news will be the market mover. Today the FOMC is going to announce the interest rate. While it's more likely that they will leave funds rate unchanged at <0.25%, investor's focus will be at the statement about economic condition. If they give an optimistic view about economic recovery progress, the Dollar should be weaken as risk appetite increase. On the other hand, if they give a pessimistic view, Dollar should gain as risk aversion increase.
GBPUSD Forecast:
The GBPUSD made another volatile but indecisive movement yesterday, convince me that we are in consolidation phase with unclear direction, and we should keep stay away from this pair for now. On h4 chart below we have a triangle formation indicating consolidation. We need a break from the triangle to find clearer direction. A breakout from the triangle should trigger further bullish scenario re-testing 1.6700 even 1.7042 area while a breakdown should lead us back towards 1.6000 area. Immediate support at 1.6380. Break below that area should trigger further bearish momentum towards 1.6260 area. Initial resistance at 1.6488. Break above that area should trigger further bullish momentum towards 1.6700 area.
On fundamental side, beside UK's PMI number today, the FOMC is going to announce the interest rate. While it's more likely that they will leave funds rate unchanged at <0.25%, investor's focus will be at the statement about economic condition. If they give an optimistic view about economic recovery progress, the Dollar should be weaken as risk appetite increase. On the other hand, if they give a pessimistic view, Dollar should gain as risk aversion increase.
USDJPY Forecast:
The USDJPY made indecisive movement yesterday, formed a Doji on daily chart. On my h4 chart below, my minor trendline resistance has been violated to the upside indicating potential upside pullback towards the bullish channel. However, since I prefer a bearish scenario as long as the pair stay below the bullish channel, this situation is a no trading zone for me. My bearish mode will be confirmed only if we have a breakdown below the minor trendline resistance. Immediate resistance at 90.50/70 area. Break above that area should trigger further bullish momentum. Initial support at 89.80 area. Break below that area should support my bearish outlook targeting 88.80 area.
USDCHF Forecast
The USDCHF made a false breakout from my range area of 1.0280 – 1.0166 yesterday, as you can see in my h4 chart below, topped at 1.0337 but closed much lower at 1.0194. It looks like bullish power is still limited and bullish scenario is not confirmed yet as price are now back in the range area. The FOMC meeting today is expected to be the market mover for us to see clearer direction, a valid break from the range area. While it's more likely that they will leave funds rate unchanged at <0.25%, investor's focus will be at the statement about economic condition. If they give an optimistic view about economic recovery progress, the Dollar should be weaken as risk appetite increase. On the other hand, if they give a pessimistic view, Dollar should gain as risk aversion increase.
Have a great day!
Tags: euro, poundsterling, yen
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Living in East Java, Indonesia and holding International Relations degree, Setyo Wibowo began his forex trading career by joining Fortune Channel Investment in 2000 as a market analyst, while learning to trade forex independently on his own.
His trading philosophy is "trading should be simple":
Driven by his desire to share his trading experiences and ideas, Setyo joined the FX Instructor team in 2008. Setyo Wibowo is now living in Mojokerto, East Java, Indonesia.
His trading philosophy is "trading should be simple":
- Buy the dips;
- Short the rallies;
- Practice discipline;
- Be patient;
- Have a good money management plan;
Driven by his desire to share his trading experiences and ideas, Setyo joined the FX Instructor team in 2008. Setyo Wibowo is now living in Mojokerto, East Java, Indonesia.
