Tuesday May 2, 2006 - 07:45:39 GMT
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Daily Technicals: Euro holding trend, Cable prone to correction
EURUSD: The pair started strong, making yet another new high of 1.2690 before reversing. In NY, the 1.2595 support was broken and it traded down to 1.2560. The bullish trend is still nicely in place, trend-line at 1.2550 this morning, look to buy Euro for a rise and 2nd try of the 1.2665 medium-term resistance, minor resistance on the way up at 1.2590. A break of the bullish trend risks further correction, but with key support at 1.2485, any dip should be controlled.
GBPUSD: A high of 1.8415 traded and with that a great opportunity to close short-term longs. After rising close to 6 cents in three days, cable has broken its short-term rising trend and retraced to medium-term chart-level at 1.8230. A deeper correction seems likely a this stage, a dip through 1.8230 risks a fall to 1.8135, next strong support, a breech there calls for a full-fletched correction to the 2-week trend-line, today its much lower at 1.7930, it will cross the 1.80 level tomorrow night. Initial resistance 1.8250, stronger at 1.8300, while we do not rule out a new attack on top, bypassing 1.8330 seems unlikely, if it does, next target is the September â€™05 hi at 1.8500.
USDJPY: The Dollar fell to a low of 112.35 before turning to break the bearish trend and rally to 113.95 this morning. On the daily charts a doji with a very, very long tail was formed, this normally points to a correction. Strong initial resistance here at 113.95, a break should lead to 114.70 or even as high as 116 in a few day. Minor support at 113.75, key at 113.40, only a lower daily close should see the pair continue falling without any retracement.
USDCHF: A low of 1.2285 traded, close enough to the 1.2260 target, since then the Dollar has retraced to 1.2445 and also broken its very steep 3-day bearish trend. This morning there is strong initial support at 1.2420, while above the pair can rise to 1.2530, medium-term resistance at 1.2550 should be strong, expect to trade a day or two side-ways, allowing for the medium-term bearish trend-line to catch up, it runs at 1.2660 this morning. To the downside, falling through 1.2420 risks 1.2370 strong support, 1.2330 minor, key at 1.2260.
@08.00GMT EU Manufacturing PMI April
@08.30GMT UK Manufacturing PMI April
@14.00GMT US Pending Home Sales March
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