Daily Technical Analysis - 7/02/08

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[B]EUR/USD[/B]

The EUR/USD took a break today, moving into a sideways pattern. A higher than expected U.S. Nonfarm Productivity of 1.8% over the forecasted 1.0% did little to damage the pair and could be an early sign of strength gathering for the EUR/USD. On the 30 minute chart below, notice that after inserting a Fibonacci retracement from the prior high of 1.4931 on February 1st to today’s recent low of 1.4591, there is resistance at the 23.6% level and support at the 0% retracement level. Prices at the time of this writing remain indecisively below or barely touching the 50 period simple MA on this 30 minute chart and well below it on a 1 hour chart. Tomorrow’s ECB announcement is rumored to announce unchanging rates and may very well influence a breakout out of this range.

[B]GBP/USD[/B]

Like the EUR/USD, the cable stayed within a range after a sharp drop around 7AM. Prices remain well below the 50 period moving average and are idling between the 23.6% resistance and 0% support Fibonacci levels. The U.K.’s Industrial Production report and the lesser influential Manufacturing Production report are expected at 9:30 tomorrow morning and both have favorable forecasts. This could be just what the cable needs to makes its jump, if only momentarily, out of this recent range.

[B]USD/JPY[/B]

The USD/JPY remains in a sideways trend as well but with volatility. On the 30minute chart, prices rose above the 50 period MA at around 2pm and then dropped back below by 5:30pm GMT. Fibonacci resistance occurs at the 38.2% line as prices whipsawed back and forth around the 23.6% line and at the time of this writing, have show below the 50 MA and threaten to near the 0% Fib line.

[B]USD/CHF[/B]

After peaking out at 1.1056 yesterday, the USD/CHF has been in steady decline and is trading in a tight range near the 23.6% Fib line at 1.0980. On the 30 minute chart below, we can see that the pair is trading with low volatility near the 50 period MA line. Tomorrow morning at 6:45am GMT, unemployment rates will be announced, but with a prior rate of 2.6% and a forecast of 2.6%, it’s going to take something more to get this pair moving any time soon.

[B]USD/CAD[/B]

The USD/CAD has experienced a large upside movement after the double bottom pattern was formed 2 days ago. Today, prices corrected back down and briskly penetrated the 38.2% Fib line. News of a much stronger Canadian Ivey PMI rating of 56.2 versus the expected no-change from a prior 45.9, did little to the pair as it then arose again past the 23.6% Fib line. While prices remain above the 50 period MA on the hourly chart below and the white 21 EMA shows a sharp upward turn, we still await tomorrow’s U.S. Unemployment Claims and Pending Home Sales report, both of which have historically strongly affected the U.S. market and may in turn affect this pair as well.

[B]AUD/USD [/B]

Prices hit a low of 0.8906 for the AUD/USD, but stayed away from the 61.8% Fib line and traced up to a high of 0.8997 after straddling the 38.2% Fib line, only to continue the downward trend that was established yesterday and diverging away from the 50 MA as shown in the hourly chart below. The white 21 EMA line began a return up to the 50 SMA line around 2pm today, but then sharply retraced back down at the time of this writing, signaling further selling strength. Tomorrow’s U.S. reports may create more volatility for this pair.

Analysis By: Harry Hsu
[URL="http://www.forexpros.com"][COLOR="Black"]Forex[/COLOR][/URL][U]Pros.com[/U] Senior Analyst