Short-Term Currency Outlook: December 3, 2012
Trend Recognition | Dec 03, 2012 04:16AM ET
EUR/USD:
1.2985
Short-Term Trend: Weak uptrend
Outlook: EUR has continued its rally since our previous update. But it seems EUR has difficulties to sustain its gains above the 1.2995 level and the risk remains for a retreat toward 1.2870 level (last week's low was 1.2880, just 10 points above this important Fibonacci level). The key on the downside remains the 1.2670 level and as long as it holds, the bullish view is intact.
On the upside, we need firm and sustained move above 1.2995 (let's say a move above 1.3050 will mean just that) to confirm gains toward 1.3195 and then to 1.3520 are likely underway...
Strategy: Longs favored at 1.2870. Stop=1.2670. Target=1.35000
GBP/USD
GBP/USD: 1.6011
Short-Term Trend: Weak uptrend
Outlook: GBP remains well bid but the upside potential is considered small here. I do not expect a significant move above 1.63 level. So, if one wants to trade against USD, I think a better opportunity can be found in EUR/USD market. In the GBP/USD market the moves remain quite choppy and the volatility is rather subdued. So, while the daily chart looks mildly positive, I cannot justify a long position here.
Strategy: Stand aside.
USD/JPY
USD/JPY: 82.46
Short-Term Trend: Uptrend
Outlook: USD has continued higher since our previous update and the daily chart looks more and more positive. The key question now is if USD will manage to break above the 83.80/84.16 level. Such a break will confirm a larger-degree breakout and will strongly re-inforce the bullish case here. Until we see such a break, there is still a lot of uncertainty if this move up is going to fail, similarly to the move up in April this year. On the downside, a decline below 81.00 negates and risks decline back toward 79.60.
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Strategy: Holding long from 81.30 is favored. Stop=80.80.
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