Today I’m going to focus on Mr. Euro as he dances against Ms. USA because we have some evidence that EUR/USD could clear out the bottom in the near future.
The question is how low will euro go?
Looking at the fundamentals, European Central bank’s governor Mr. Mario Draghi also known as Super Mario still seems to be pretty upset about the European economy even though they already cut several interest rates twice this year and purchased more asset-back securities. He is obviously worried that the euro zone could be heading for a Japanese-style decade of deflation and recession. So he confirmed that he will do whatever it takes to raise inflation and that we could see a Quantitative Easing coming to the euro pretty soon. ECB is set to have another monetary policy meeting in a couple of weeks and policymakers might take this opportunity to announce actual QE.
So with this in mind let’s take a look at the daily forex dance floor to see what we can discover from the chart pattern analysis.
The pair has been mostly consolidating after reaching our previous bearish target oa 1.2494 beginning of November. Now the pair is trapped inside a falling wedge while dancing below the Ichimoku cloud, reaching our next bearish target of 1.2260. as you already know after graduating the Invest Diva education course, a falling wedge is often times a reversal pattern and is this case it’s end seems to be falling perfecting on our bearish target. So with Super Mario’s QE actualization coming up, we could see the reversal happen once the pair breaks above the falling wedge and moves towards the Ichimoku cloud. A break above the 38% Fibonacci level at 1.2930 could confirm the long term bullish outlook for 2015 which could bring the european currency back up to the 1.31 level against the US dollar. Keep in mind that we need to pay close attention to the US dollar for this trade as well, because our bullish EUR/USD outlook can accelerate if we see a pullback in the currently rallying US dollar.
So to sum it up, I’m currently bearish on EUR/USD but we could see a reversal in the coming weeks.
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Intraday Forex Technical Levels
GBP/USD 4-hour: Consolidating.
Invest Diva positioning: Short positions below 1.5656 with targets at 1.5591 and 1.5481 in extension.
Technical reasons why: The pair continues moving sideways within a range between the previous bottom and 23% Fibonacci level as it enters the Ichimoku’s cloud. The RSI is also around the neutrality area.
Alternative Scenario: Above 1.5656 look for further upside towards 1.5731 and 1.5817.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.5591 | 1.5656 | 1.5817 |
| 1.5481 | 1.5731 |
AUD/USD 4-hour: Dropping.
Invest Diva positioning: Short positions below 0.8539 with targets at 0.8472 and 0.8318 in extension.
Technical reasons why: The pair broke below the previous bottom and may continue dropping below the Ichimoku’s cloud to reach our bearish target. The RSI is about to reach the oversold zone.
Alternative Scenario: Above 0.8539 look for further upside towards 0.8623 and 0.8675.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.8318 | 0.8539 | 0.8675 |
| 0.8472 | 0.8623 |
USD/JPY 4-hour: Consolidating.
Invest Diva positioning: Long positions above 117.50 with targets at 118.86 and 119.78 in extension.
Technical reasons why: The pair continues moving sideways above our pivot level at 117.50 above the Ichimoku’s cloud. The RSI is moving above the neutrality area.
Alternative Scenario: Below 117.50 look for further downside towards 116.56 and 115.60.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 116.56 | 117.50 | 119.78 |
| 115.60 | 118.86 |
USD/CAD 4-hour: Teasing 38% Fibonacci level.
Invest Diva positioning: Short positions below 1.1317 with targets at 1.1272 and 1.1226 in extension.
Technical reasons why: The pair reached our bullish target and the 38% Fibonacci level at 1.1317, but has not been able to break above it. The bearish sentiment continues below the Ichimoku’s cloud. A break above this level would signal a further rise. The RSI is heading down around the neutrality area.
Alternative Scenario: Above 1.1317 look for further downside towards 1.1372 and 1.1463.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.1226 | 1.1317 | 1.1463 |
| 1.1272 | 1.1372 |
USD/CHF 4-hour: Teasing the 23% Fibonacci level.
Invest Diva positioning: Short positions below 0.9648 with targets at 0.9592 and 0.9548 in extension.
Technical reasons why: The pair is testing the 23% Fibonacci level and the Ichimoku’s cloud after failing to break above the previous top with the RSI around the neutrality area.
Alternative Scenario: Above 0.9648 look for further upside towards 0.9737 and 0.9815.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.9592 | 0.9648 | 0.9815 |
| 0.9548 | 0.9737 |
EUR/JPY 4-hour: Teasing the 23% Fibonacci level.
Invest Diva positioning: Long positions above 146.80 with targets at 148.92 and 150.08 in extension.
Technical reasons why: The pair is on an overall uptrend and moving in the range between the previous top and Ichimoku’s cloud. The RSI is moving slightly above the neutrality area.
Alternative Scenario: Below 146.80 look for further downside towards 145.03 and 143.43.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 145.03 | 146.80 | 150.08 |
| 143.43 | 148.92 |
Intraday Commodities Technical Levels
Dow Jones Intraday: further advance.
Invest Diva positioning: Long positions above 17700 with targets at 17870 and 17915 in extension.
Alternative scenario: Below 17700 look for further downside with 17600 and 17550 as targets.
Gold spot Intraday: bullish bias above 1186.
Invest Diva positioning: Long positions above 1186 with targets at 1207.85 and 1221 in extension.
Alternative scenario: Below 1186 look for further downside with 1175 and 1168 as targets.
Crude Oil Intraday: under pressure.
Invest Diva positioning: Short positions below 77 with targets at 74.8 and 74 in extension.
Alternative scenario: Above 77 look for further upside with 77.85 and 78.7 as targets.
