Weekly Currency Index Technical Analysis – 12 January

Currency Index Notes

AUDLFX

  • Bullish candlestick pattern showing sharp reversal, but expecting momentum to fade as price approaches 1.59 or the region between 78.6% and 100% of the bearish flag retracement.
  • Alternate view is that price could possibly turn around and just push higher.
AUDLFX Weekly Analysis – 12/01/2015
AUDLFX Weekly Analysis – 12/01/2015

Conclusion: Safer to leave AUD pairs alone this week and see what price action dictates.

CADLFX:

  • After the previous week’s bearish engulfing pattern, price followed through with a bearish close last week.
  • Major risk comes from the dynamic support of the 52-week EMA and the trend line as well as the support/resistance at 1.6145
  • Canadian Dollar could probably resume its uptrend as long as the piercing line’s low near 1.6017 is not breached.
  • Daily charts formed a Doji on Thursday and then resumed its larger short term down trend. Supported by 200-day EMA
CADLFX Weekly Analysis – 12/01/2015
CADLFX Weekly Analysis – 12/01/2015

Conclusion: Follow up with daily candles for reversals above 1.6017

CHFLFX:

  • Price broke down from the trend line and testing support at 1.891. Could expect a retracement back to break out level at 1.9213 before the bearish trend resumes.
  • Plotted the next likely support zone on break of 1.891
  • Daily charts bounced off 1.891 support with a small body, indicating a short term reversal quite likely.
CHFLFX Weekly Analysis – 12/01/2015
CHFLFX Weekly Analysis – 12/01/2015

Conclusion: Follow up to daily charts and look for bearish reversals from 1.9213

EURLFX:

  • Last week broke out from the support zone near 2.283 but not a conclusive break out.
  • Could potentially see a retracement back to 2.30, the break out level ahead of further declines.
  • Daily charts closed in a doji so short term reversal imminent.
EURLFX Weekly Analysis – 12/01/2015
EURLFX Weekly Analysis – 12/01/2015

Conclusion: Look for longs in the very short term of wait for better higher prices to short from.

GBPLFX:

  • Bearish follow through after the hammer pattern. Second week of declines.
  • Daily charts formed a doji at 200-day EMA, but bounces are likely to be limited.
  • Expect a minor rally back to the upper trend line of the triangle
GBPLFX Weekly Analysis – 12/01/2015
GBPLFX Weekly Analysis – 12/01/2015

Conclusion: Stay aside GBP this week

LFXJPY:

  • Break out from the trend line with a bearish close. Expect Yen to strengthen this week until it targets 60.63 zone of support/resistance.
  • Daily charts formed a pullback but then closed lower on Friday. Expect continued weakness.
LFXJPY Weekly Analysis – 12/01/2015
LFXJPY Weekly Analysis – 12/01/2015

Conclusion: Look to taking short positions on Yen pairs.

NZDLFX:

  • Weekly charts was bullish but price currently at previously established resistance level.
  • Daily charts formed a bearish dark cloud cover pattern with a higher open than previous close. Appearance of this near the resistance zone indicates short term declines in Kiwi.
  • 1.4855 indicates short term support level for declines.
NZDLFX Weekly Analysis – 12/01/2015
NZDLFX Weekly Analysis – 12/01/2015

Conclusion: Look to short NZD this week against stronger currencies only.

USDLFX:

Weekly closed with a sharp and perfect textbook doji. Appearance of this at the top indicates a short term reversal of sentiment.

Daily charts formed a hammer few days ago and short positions recommended only on close below this level at 1.9132.

USDLFX Weekly Analysis – 12/01/2015
USDLFX Weekly Analysis – 12/01/2015

Conclusion: Look to daily charts for a daily close below 1.9132 to short the USD.

Prepared with LiteForex Currency indices.

Ideal Currency Pairs to trade this week

NZDJPY: Based on the daily charts forming a bearish engulfing near resistance zone and the interim strength in the Yen. Look to hold short positions within the week. Look for short entries near 93.05, targeting 92.1

EURUSD: Long, targeting 1.2

AUDUSD: Long, targeting 0.8535, but look for trading at break even