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Daily FX Analysis: Looking for Short Options on Tests of Resistance

Published 02/27/2013, 06:22 PM
The markets provided some relief today after previously aggressive moves to the downside.

Further comments from Draghi today highlighted the weak euro area, but that there were still some options. Italy remained a focus area with little more news out of the country which has hit a political stalemate, and parties seemingly rejecting coalition governments at this stage.

Bernanke also reiterated previous comments that thereis still more good than harm from QE, so the door will be left wide open.

EUR/USD
The euro put in a slightly constructive bounce today to offer some relief from the previous onslaught.
We still like this pair short and therefore will look for short options and rejections of resistance up to the 1.3300 level.
Personal Bias: Bearish
Support: 1.3000
Resistance: 1.3150
My Strategy: Still holding short but will look to add additional shorts on rejections of resistance up to the 1.33 level.
$EURUSD (Daily)  02_11_2012 - 28_02_2013$EURUSD (Weekly)  Week 44_2010 - Week 9_2013

GBP/USD
The pound continues to chop sideways, as it makes its mind up on short term direction. We willlook to sell any rallies in this pair.
Personal Bias: Bearish
Support: 1.5160
Resistance: 1.5190 / 1.5370
Strategy: Look for sell signals on any retracements higher.
$GBPUSD (Daily)  12_10_2012 - 28_02_2013$GBPUSD (Weekly)  Week 3_2011 - Week 9_2013


AUD/USD
The Aussie managed to find support again today, in its ever increasing trick of finding it. This bear is still bearish, but we suspect we could easily see a push higher here before another one lower. Potentially, a good option would be to look at the
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NZD/USD instead of the Aussie for trading ideas.
Personal Bias: Bearish
Support: 1.0200
Resistance: 1.0270
My Strategy: Stand aside
$AUDUSD (Daily)  17_10_2012 - 28_02_2013$AUDUSD (Weekly)  Week 46_2010 - Week 9_2013

USD/JPY
Pair found support today at the 91.00 level. Potentially this could suggest a move higher to test initial resistance at the 93.00 mark.
Personal Bias: Neutral
Support: 91.00 / 88.00
Resistance: 93.00
Strategy: sidelined
$USDJPY (Daily)  12_10_2012 - 28_02_2013$USDJPY (Weekly)  Week 1_2011 - Week 9_2013

Bonus Pairs
NZD/USD
We like this pair for short opportunities A test of resistance towards the 0.83 mark would offer a nice risk reward. Look to scale into the trade (higher risk), or wait for a clear price rejection of upper prices on a lower timeframe (1 or 4 hr charts).
$NZDUSD (Daily)  15_11_2012 - 28_02_2013

USD/CAD
Keep an eye on the USD/CAD. We can see a push lower here to value, in order to offer up better long positions. We wouldn't consider shorting the pair here, but a move towards the 1.0100 handle would offer good value on long positions.
$USDCAD (Daily)  07_11_2012 - 28_02_2013

EUR/CHF
This is a really interesting pair lately. Given that it is pegged at the 1.20 mark by the Swiss National Bank, it is unlikely to trade below this value, so if you can buy and hold this pair close to this price it offers incredible upside potential. Downside to this trade is a potential return horizon, which could take years if not months.
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$EURCHF (Daily)  22_10_2012 - 28_02_2013

USD/CHF
Interesting pin bar pointing to higher prices tonight. Resistance comes in not far above with the 200 day moving average and weekly resistance, but if the pair can push past this, we could be on for a much larger move higher.
$USDCHF (Daily)  24_10_2012 - 28_02_2013

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