Weekly Technicals 14th – 20th January 2013

Supports – 1.3230 1.3175 1.3025
Resistances – 1.3350 1.3465 1.3650
Price range: 1.3175 – 1.3465

Trading call

EURO rallied to end the week with gains of 2.11%. The currency pair recovered all the losses of the previous week to close at a nine and a half month high.

EURO began the week on a positive note, but quickly gave up all its gains over the next couple of sessions.

The bull- run which began on Thursday with the EURO gaining more than 1.5% for the session was followed up on Friday as well with a 0.55% gain for the European currency.

The pair closed near the top end of a very crucial mid- term bullish channel at 1.3350 and a close above would extend the rally to 1.3465. However, the target for the chart breakout is placed at 1.3650.

Supports for the pair are placed at 1.3230 and 1.3175.

Short and long- term trend – Bullish
Medium- term trend – Topped out

Hold on to long EURO positions initiated at 1.3230 with a trailing stop at 1.3300 for a profit target of 1.3450.

If stops get hit, initiate long positions again at 1.3230 with a stop at 1.3150 for a profit target of 1.3330.

Short EURO-
At 1.3460 with a stop at 1.3520 for a profit target of 1.3350.

Supports – 1.6100 1.6030 1.5950
Resistances – 1.6170 1.6225 1.6350
Price range – 1.5950 – 1.6350

Trading call

Pound sterling ended the week in the green, up 0.36%. The pair, however, closed in the negative on three of the last five trading sessions.

The pair was unable to close below 1.6000 after multiple attempts, indicating the currency pair has a very strong support base, but the pair also failed to rally unlike its European counterpart. The short and long term trend remain bearish with only the mid- term trend offering some support to the pair.

Expecting GBP to rally this week for an immediate target of 1.6325- 1.6350; top end of the mid- term bullish channel. Crucial supports placed at 1.6100 and 1.6030, break of which the pair could drift lower to 1.5950.

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

Long Sterling- At 1.6040 with a stop loss at 1. 5970 for a profit target of 1.6200.
At 1.5950 with a stop loss at 1. 5890 for a profit target of 1.6150.
At 1.6270 with a stop at 1.6210 for a profit target of 1.6350.

Short Sterling-
At 1.5890, with a stop loss at 1.5960 for a profit target of 1. 5650

Supports – 88.70 87.90 86.00
Resistances – 89.40 91.30 96.00
Price range – 86.00 – 89.40

Trading call

The US dollar extended its gains versus the yen to end the week higher by 1.19%, marking the ninth successive week of gains. The dollar also closed at a new 30- month high versus the Asian currency.

USD has been steadily rallying versus the JPY and has gained more than 15.5% from its lows over the last four months. Major long- term resistance placed at 89.50; trend-line drawn from November 1982 and a close above which USD will begin a fresh rally with a likely target at 96.00.

However, expecting the pair to correct from current levels to about 86.00- 86.50; bottom of the near- term bullish channel

Near and medium- term trend- Bullish
Long term- trend- Bearish

Short USD/JPY-
At 89.40 with a stop loss at 90.20 for a profit target of 86.50.

Long USD/JPY-
At 90.25 with a stop loss at 89.25 for a profit target of 91.20.
At 91.90 with a stop loss at 91.10 for a profit target of 95.50