Weekly Technicals 10th-14th December 2012

Supports – 1.2830 1.2670 1.2580
Resistances – 1.2960 1.3080 1.3160
Price range – 1.2830 – 1.2960
View – Range bound with a bearish bias

Trading call

The euro closed lower by 0.45% for the week versus the US dollar, the first negative weekly close after almost a month. Earlier in the week, the currency pair briefly broke out of the 1.3100 levels, which is the long- term resistance, but was unable to close above those levels & quickly pulled back giving up almost 25% of its gains accumulated since the mid of November, when the currency pair rallied from the lows of 1.2660- highs of 1.3126.

The pair slid below crucial short- term support at 1.2920 before recovering to close at 1.2924.

Expect EUR/USD to weaken to 1.2800- 1.2820 UNLESS the pair closes above 1.2960. Close above 1.2960, the pair could attempt another move towards 1.3100- 1.3150.

Short term trend- Bullish
Medium and long term trend- Bearish

Short EUR/USD- At 1.2960 with a stop at 1.3020 for a profit target of 1.2830

Long EUR/USD- At 1.2820 with a stop at 1.2760 for a profit target of 1.2950.
At 1.3020 with a stop at 1.2980 for a profit target of 1.3150.

Supports – 1.6050 1.6125 1.6190
Resistances – 1.6015 1.5910 1.5870
Price range – 1.5900 – 1.6100
View – Bearish bias

Trading call

Pound sterling closed the week with minor gains of 0.15% after rallying almost 0.75% during the first half of last week. Sterling has been inching its way up from mid November with very small gains accumulated on the daily chart. The currency pair has given up almost one third of the gains built up since the mid of November.

The trend, for now, remains bearish with the currency pair likely to slide to 1.5900. Only if Sterling closes above 1.6050, the short term trend will turn bullish again, with a near- term target of 1.6190

Short term trend – Bearish
Medium term trend – Bullish
Long term trend – Bearish

Short GBP/USD-
At 1.6050, with a stop at 1.6110 for a profit target of 1.5925.
Close below 1.6010 or break of 1.5990, with a stop at 1.6025 for a profit target of 1.5925.

Long GBP/USD- At 1.5870 with a stop at 1.5820 for a profit target of 1.6050 At the break of 1.6090 or a close above 1.6050 with a stop at 1.6010 for a profit target of 1.6175

Supports – 81.80 80.60 79.80
Resistances – 82.60 83.10 85.50
Price range – 80.60 – 83.30
View – Bearish bias

Trading call

USD/JPY ended the first week of December absolutely flat at 82.46, although there was some volatility visible during the week.

The yen has either weakened or closed flat over the last 4 weeks and continues to remain at eight- month lows versus the US dollar.

The pair is poised to breakout from the 81.80- 83.30 range in the near- term.

If the currency pair closes above the crucial resistance at 83.30 or breaks 83.80, the rally will extend all the way to 85.25- 85.50.

The short- term trend remains bullish with the upside placed at 83.30.
The medium- term trend is bullish too with the upside at 85.50.
Breakout of the long- term trend is positioned at 83.10.

Short USD/JPY-
At 83.30 with a stop at 83.80 for a profit target of 82.10.
At the break of 81.30 with a stop at 82.20 for a profit target of 80.60.

Long USD/JPY-
ONLY
if the pair closes above 83.30 OR at the break of 83.80 with a stop at 83.00 for a profit target of 85.25.

Disclaimer:
Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.