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For December 8th 2009

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Any information contained in this document are based on or derived from information generally available to the public from sources believed to be reliable. There’s no representation or warranty is made or implied that it is accurate or complete. Any opinions expressed are subject to change without notice. This post has been prepared solely for information purposes and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy. Charts were generated using Alpari UK’s MetaTrader 4.0

EURUSD

Bouncing off 1.4767 on Monday towards 1.4889 has not changed the bearish outlook on EURUSD. The pair is still seen down with the focus on the objective at 1.4625. Maintaining its position below the previous ascending price channel, EURUSD retraced first towards 1.4904 before it fell to 1.4767. This allowed SHORT to be established at 1.4896 as mentioned yesterday. As the first target has been hit at 1.4800, the focus is now shifted to the next one at 1.4625. The correction however, may still in progress and that the next leg up could take the pair higher towards 1.4889 or even 1.4939 before it resumes its course downwards. SHORTS may be established again at around 1.4889/1.4904 up to 1.4939/48. It is likely that 50% will be the highest retracement this pair will get. Stop may be placed above 1.4948 with objectives set at 1.4740, 1.4649 and 1.4625/28. Similarly, should the pair falls directly, the immediate support will be at 1.4798. Afterwards, there are 1.4767 and 1.4740, then 1.4649 before the final 1.4625/28 objective.

GBPUSD

Cable retraced to 1.6515 nicely before it resumed its fall to hit 1.6312. Currently at mid-1.64s, the pair looks set for another leg down. Still, since the swing from 1.6720 towards 1.6312 is likely to have completed, there is a risk that the pair is still looking for some more corrective swing, probably towards 1.6515/16 area. This is a pivotal level where the 50% retracement lies as well as a previous swing low and at the same time, also a previous swing high. Downside, supports come at 1.6360, 1.6312, 1.6283, 1.6270, 1.6244, 1.6159, and as low as 1.5950. Look to re-establish SHORT but with stop set above 1.6515. Use the aforementioned support levels as objectives. It would be best to keep trailing the stop each time an objective is reached.

USDJPY

USDJPY fell towards 89.03 and thereby triggering LONG entries at 90.11, 89.70, and 89.37. The zigzag correction might have been completed at 89.03 and this would be confirmed when the pair breaks the descending trendline at around 89.75. Hold LONG for now, and keep targets set at 91.11, 92.32, 93.08, and 93.80. Below 89.03 the pair may sink deeper towards 88.47/64 where the ascending trendline lies for today. Should the trendline to give way, the pair will slide even deeper towards 87.77, 87.07 or even 86.20.