Weekly Technicals 21st – 27th January 2013

Support- 1.3220 1.3175 1.3040
Resistances – 1.3360 1.3425 1.3520
Price range: 1.3175 – 1.3425

Trading call-

EURO ended the week slightly lower versus the greenback, losing 0.19%, week-on-week. The European currency was unable to build on the gains of Monday’s session in which the EURO hit a new ten and a half month high, but closed lower in the remaining three of the four trading sessions during the week.

The EURO also failed to hold above the top end of a very crucial mid- term bullish channel at 1.3360 for more than a couple of sessions.

The trend remains bullish with the breakout of the ascending triangle chart pattern at 1.3175 for a profit target of 1.3660 intact.

Only a close below 1.3050 will negate this view with the euro- dollar likely to quickly slide to a near- term target of 1.2775- 1.2800.

Short and long- term trend – Bullish
Medium- term trend – Topped out
Long EURO-
At 1.3220 with a stop at 1.3150 for a profit target of 1.3350.
Short EURO- At 1.3130 with a stop at 1.3180 for a profit target of 1.3050.

Supports – 1.5825 1.5600 1.5475
Resistances – 1.5960 1.5990 1.6070
Price range – 1.5600 – 1.5960

Trading call-

Pound sterling slid sharply versus the US dollar to end the week with losses of 1.63%, dashing hopes of a near- term rally with targets of 1.6325- 1.6350.

Sterling also closed at a two- month low and the currency pair looks highly bearish if losses extend beyond 1.5825. Resistances are placed at 1.5960- 1.5990.

Only if the pair manages to close above 1.6070, the trend will revert to bullishness and we could witness a rally with targets of 1.6200 followed by 1.6350.

However, for now, the only glimmer of hope for a pull- back is if Sterling bounces off 1.5800- 1.5825 levels.

Short and long term trend – Bearish Medium term trend- Bullish
Hold on to short Sterling positions initiated at 1.5890 with a stop loss at 1.5910 for a profit target of 1. 5840. Short Sterling also at 1.5775 with a stop loss at 1. 5840 for a profit target of 1.5650.

Long Sterling- At 1.5825 with a stop loss at 1. 5775 for a profit target of 1.5950.

Supports – 89.60 88.75 87.50
Resistances – 90.60 91.25 95.50
Price range – 88.75 – 91.25

Trading call-

The US dollar further extended its gains versus the yen to end the week higher at 0.98%, also marking the tenth successive week in closing positive against the Asian currency and at a new 31- month high.

The pair broke through crucial long term resistance at 89.50 and is currently trading close to the top end of the near- term bullish channel at 90.60. Close above could lead to a fresh rally with targets of 95.50. However, leading indicators are suggesting negative divergences.

Expecting all yen pairs to be highly volatile during the week.

Near and medium term trend- Bullish Long term trend- Bearish
Short USD/JPY- At 90.90 with a stop loss at 91.50 for a profit target of 89.00.

Long USD/JPY-
At 92.00 with a stop loss at 91.00 for a profit target of 95.00.