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Technical Analysis

G-7 F/X Weekly Report
Tuesday, February 26th, 2013

Highlights
AUD/USD Shorts are favored below 1.0337 targeting 1.0138-64 over the near-term USD/CAD after a break above the top of the rotation at 1.0054, the USD/CAD has traded higher and targets resistance at 1.0300. EUR/USD has broken its uptrend since July 2012 which now favors shorts below 1.3280 targeting 1.2875 and then 1.2649-89 GBP/USD Shorts remain favored below 1.5320 but has reached long-term support. A break above 1.5320 would confirm this and target a bounce up to 1.5458/1.5721. USD/JPY there is key long-term resistance between 93.80-94.90, so watch for a pause here or a retracement. Remaining longs should look to tighten stops. AUD/CAD has broken the top of the range at 1.0467 . All counter trend longs from rotational support should look to tighten stops below 1.0467 and new longs may be considered above 1.0467. AUD/CHF Look for continuation shorts below .9410 or retracement shorts at .9630 targeting .9204-34. Above .9630 would negate this view and target a move higher into .9900. AUD/JPY broke below the bottom of its recent consolidation at 94.70 which if holds favors a continued pullback into 92.83/91.00. CAD/JPY has broken below support at 91.10-90 which ends the recent uptrend that began in November 2012. We favor rotational action between 88 and 91.10 in the near-term. EUR/GBP Longs remain favored above the upper ascending trend line at .8500 targeting further upside to .8925 EUR/JPY has broken below the bottom of its recent consolidation at 122.90 which if held favors a continuation to the downside into 115.57. The strong uptrend seems to have ended for the time being. GBP/AUD has reached support/target at 1.4705 where we suggested taking some profits. Stops should be tightened to protect 1.4900. Below 1.4705 would break key long-term support and would accelerate selling to the downside GBP/CAD has reached support at the bottom of is rotational range where counter trend longs may be considered. GBP/CHF We still favor continuation shorts below 1.4177 but there is long-term rotational support at current levels so stops on remaining short positions should be tightened to protect 1.4231. GBP/JPY has broken its recent uptrend with a break below 142.65 and has reached support at 138.00.

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Table of Contents

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AUD/USD, USD/CAD USD/CHF, EUR/USD GBP/USD, USD/JPY AUD/CAD, AUD/CHF AUD/JPY, CAD/CHF CAD/JPY, CHF/JPY EUR/AUD, EUR/CAD EUR/CHF, EUR/GBP EUR/JPY, GBP/AUD GBP/CAD, GBP/CHF GBP/JPY Core Methodology Disclaimer

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AUD/USD has broken below its ascending trend line and below support at 1.0317-37 which now favors a continued decline to support at 1.0138-64.which is the bottom of the larger rotation since July ‘12.

AUD/USD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

USD/CAD After breaking above the top of the rotation at 1.0054, the USD/CAD has gained upside momentum and targets the top or the upper HVA at 1.0300 with further resistance/target at 1.0422.

USD/CAD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

3

USD/CHF remains in a down trend but has broken back inside the HVA which if holds, favors a move higher into .9470 .9594 in the near-term. Below .9230 would target shorts down to .9065/.8920. .

USD/CHF

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

EUR/USD has broken its uptrend since July 2012 which now favors shorts below 1.3280 targeting 1.2875 and then 1.2649-89. A break back above the trend line would negate this view and target longs up to 1.3490.

EUR/USD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

4

GBP/USD continues to act weak since making highs at 1.6380. Shorts remain favored below 1.5320 targeting a breach of 1.5000. There is longer term rotational support just above 1.5000 so we wouldn’t be surprised to see a near-term bottom at current levels. A break above 1.5320 would confirm this view and target a bounce up to 1.5458/1.5721.

GBP/USD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

USD/JPY broke higher a few days ago but has since pulled back to the lower trend line. Above the trend line favors longs but a breach of the trend line would accelerate selling into 90.15 with further support/target at 86.70. Any remaining longs should look to tighten stops to protect 90.

USD/JPY

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

5

AUD/CAD has broken the top of the range at 1.0467 . All counter trend longs from rotational support should look to tighten stops below 1.0467 and new longs may be considered above 1.0467. The upside momentum remains strong..

AUD/CAD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

AUD/CHF has reached support at .9410-28 after breaking below the bottom of its HVA rotational range between .9630 and .9900. Look for continuation shorts below .9410 or retracement shorts at .9630 targeting .9204-34. Above .9630 would negate this view and target a move higher into .9900.

AUD/CHF

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

6

AUD/JPY has broken below the bottom of its recent consolidation at 94.70 which if holds favors a continued pullback into 92.83/91.00. Above 94.70 would favor longs again.

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AUD/JPY

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

CAD/CHF We still favor shorts below .9287 down to .8928-.9003. The trend remains bearish.

CAD/CHF

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

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CAD/JPY has broken below support at 91.10-90 which ends the recent uptrend that began in November 2012 and favors continued near-term weakness into support at 87-88. Below 87 would accelerate selling into 84.45-85.60 . We favor rotational action between 88 and 91.10 in the near-term.

CAD/JPY

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

CHF/JPY has pulled back to support at 98 which needs to hold to keep the bullish trend intact. Failure to regain 100.43 would favor a continued pullback into 93.80-95.50 in the near-term.

CHF/JPY

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

8

EUR/AUD has broken back below support at the upper end of the previous rotational range at 1.2820 which if held, targets a further decline into 1.2540 in the near-term A break back above 1.2820 would favor longs up to 1.3150-90.

EUR/AUD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

EUR/CAD is consolidating between the previously broken trend line and resistance at 1.3600. Longs are still favored above the trend line targeting 1.3600-1.3700 with further resistance/target at 1.4125-1.4375 in extension. Below the trend line would target a further pullback to the lower trend line.

EUR/CAD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

9

EUR/CHF Shorts are favored below 1.2183 targeting 1.2000-13. Above 1.2246 would favor a move back higher into-1.2470.

EUR/CHF

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

EUR/GBP has broken higher after bouncing off the previously broken trend line on a retracement and continues to act bullish. Longs remain favored above the trend line targeting further upside to .8925.

EUR/GBP

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

10

EUR/JPY has broken below the bottom of its recent consolidation at 122.90 which if held favors a continuation to the downside into 115.57. The strong uptrend seems to have ended for the time being. .Above 122.90 would favor the longs again into 126.88 initially.

EUR/JPY

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

GBP/AUD broke below the bottom of the HVA. at 1.5255 and has reached support/target at 1.4705 where we suggested taking some profits. Stops should be tightened to protect 1.4900. We still favor continuation shorts below 1.4900 back down to1.4705. Below 1.4705 would break key long-term support and would accelerate selling to the downside.

GBP/AUD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

11

GBP/CAD has reached the bottom of its rotational trading range where it has found support. Near-term traders may look to trade from the longs side here looking for a bounce into 1.5800 initially and a possible move back to the top o the rotation at 1.6203.

GBP/CAD

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

GBP/CHF is in a near-term down trend and has breached support, now resistance at 1.4177-1.3231. We still favor continuation shorts below 1.4177 but there is long-term rotational support at current levels so stops should be tightened to protect 1.4231.

GBP/CHF

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

12

GBP/JPY has broken its recent uptrend with a break below 142.65 and has reached support at 138.00. Below 139.50 favors continued downside action into 133.36. Above 139.50 would target a move higher back into 132.65/144.65.

GBP/JPY

Spot Currency

Daily Bar Chart

Volume-at-Price overlay

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Core Methodology
In performing our analyses and making trading decisions, our research utilizes volume‐at‐price information and the concepts of Auction Market Theory. Volume‐at‐price is valuable tool similar in some ways to Market Profile, which utilizes time‐at‐price. Volume‐at‐price is displayed as a histogram along the price (vertical) scale and builds across the chart as traded volume occurs at each price. This view is sometimes referred to as a volume profile or VAP (volume‐at-price) profile. Volume‐at‐price analysis provides valuable information about what prices have seen the heaviest institutional interest and can give insight into where the smart money is accumulating and distributing. While traditional indicators are often simply derivations of price information, volume‐at‐price provides unique additional information that is not available to traders only using traditional technical analysis methods.

By applying volume profiles to specific areas of the chart, information can be drawn out of the price action identifying areas of support and resistance as well as trend information. We refer to the areas of heaviest volume within the volume profile histogram as high‐volume areas, or HVA’s. The location of HVA’s and the price action around them are determinants in forming trade setups and determining expectations and the probabilities of subsequent price action.
Volume‐at‐price analysis is applicable and useful at all degrees of scale, from weekly charts to 1‐minute charts and everything in between. Performing this type of analysis in multiple timeframes allows us to integrate the broad view of what the market is doing with the immediate movements at a more granular level. This allows us to take positions that not only have favorable odds of success but that also have very favorable risk/reward metrics. In performing our analyses for our published reports as well as for our trading calls, we focus only on opportunities that have a minimum expected reward/risk ratio of 2‐to‐1 or better.

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Disclaimer & Analyst Certification
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