Weekly Technicals 17th-23rd December 2012

Supports – 1.3025 1.2890 1.2830
Resistances – 1.3175 1.3230 1.3450
Price range: 1.2900 – 1.3250

Trading call

Last week, the euro rallied to close all five trading sessions of the week in the positive accumulating a weekly gain of more than 1.8%.
By bouncing back from the lows of last week, the euro also averted a major medium- term support at 1.2830, which could have dragged the currency pair to well below 1.2100.

EUR/USD now finds resistance at 1.3175- 1.3230, which is the top end of the near- term channel. Close above 1.3230, the pair will begin a fresh rally to 1.3450 followed by 1.3700. Crucial supports at 1.3025 followed by 1.2890.

Short term, medium and long term trend – Bullish
Short EUR/USD-
For the week, short EUR/USD at 1.3225 with a stop at 1.3290 for a profit target of 1.3050.
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 – 1.6075 1.6030 1.5940
Resistances – 1.6240 1.6350 1.6470
Price range – 1.6000 – 1.6250

Trading call

Pound sterling closed the week with gains of 0.8%. The currency pair rallied from the lows of 1.6011 earlier in the week to close four out of five sessions in the green and record the highest close since October 4th. Short- term resistance at 1.6240. Close above this level with momentum will drive the rally to 1.6470, which is the long term resistance.

Important support levels at 1.6075 followed by 1.6010- 1.6030. As long as Sterling does not close below the supports, the trend will continue to remain bullish. Close below the supports, the pair can quickly slip to 1.5875- 1.5925.

Buy on dips.
Short and medium term trend remain bullish, while the long term trend remains bearish
Long GBP/USD- At 1.6075 followed by 1.6030 with a stop at 1.5975 for a profit target of 1.6225.

Also at 1.5885 with a stop at 1.5825 for a profit target of 1.6075.

Short GBP/USD-
At 1.6250, which is the higher end of the short- term channel, with a stop loss at 1.6300 for a profit target of 1. 6100

Supports – 83.00 80.60 0.10
Resistances – 83.50 84.20 85.50
Price range – 83.00 – 85.50

Trading call

The yen ended the week with losses of 1.22%, marking four out of five weekly declines. The last time we saw the yen slide in such a fashion was in February, when the USD gained for six consecutive weeks on the trot. The currency pair also recorded a close last seen in April 2011.
Immediate resistance positioned at 84.20, which happens to be the previous highs recorded in March this year. Close above the level, JPY should slide further to 85.50, which the medium term resistance for the pair.
So long as the support at 83.00 holds, USD/JPY should rally to 85.50. If USD closes below 83.00, expect a quick and sharp fall in the currency pair to 80.00- 80.50 levels.
The short, medium and long term trend remain bullish

Hold on to long USD/JPY positions initiated above 83.30 with a stop loss at 82.50 for a profit target of 85.00.

Short USD/JPY- If the currency pair closes below 83.00 or breaks 82.40, with a stop at 83.20 for a profit target of 80.72.

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.