The EURUSD continued to move lower today reaching 1.5521 as of this writing. Look for prices to hold below 1.5568 as this is the 50.0% of today’s 1.5616-1.5521 fall, as with any strong trend 38.2’s and 50’s tend to hold and provide favorable entry points with trends. However, any sustained break of 1.5596 intraday would confirm further upside with risk for a move towards 1.5639 which is the 38.2% of the recent 1.5757-1.5521 fall. Elsewhere, GBPJPY and AUDJPY moved lower today in European session, however, GBPJPY has since moved back up to test the 61.8% of the 214.75-213.26 fall at 214.20, as a sustained break targets 216.60-214.75 zone while prices should hold above 213.80. As to trading, Forex Signals Plus has now been profitable 13 of the 14 weeks since introduction of our service. In the futrue, we will attempt to make daily post so as to give our subscribers an idea as to what our outlook is for the session ahead.
The US Dollar made a broad rally yesterday as better than expected consumer confidence fueled the US dollar rally in a corrective move with yesterday’s EURUSD fall essentially limited by the 61.8% of the 1.5302-1.6037 rise at 1.5583, although prices did probe a bit lower reaching an intraday low of 1.5558. A daily close below 1.5583 will confirm lower prices in the short term with 1.5302 as the next objective, however, as mentioned in this week’s outlook, the pair remains in a 1.5583-1.5756 consolidation zone with a sustained break of this zone favoring an extension in the direction of the break. Elsewhere, today’s outlook favors JPY buying with GBPJPY and AUDJPY likely to move lower, while USDCAD also favors a move higher today.
Last week saw the EURUSD fail to sustain prices to the upside as our forecast for a 2 hour close below 1.5847 would favor further downside towards 1.5783 followed by 1.5737, as prices eventually reached 1.5628. The US dollar has made some recent gains since reaching the all time low against the Euro at 1.6037 on July 15, 2008, however, the trend remains for a weaker dollar into the months ahead as the the medium term and long term trends clearly favor further USD weakness. Specifically, the medium term rise from the December 20, 2007 low at 1.4309 remains active as only a daily open and close below 1.5377 will confirm the rise from 1.4309 is complete at 1.6037. As to the broad outlook, the rise from the November 2005 low at 1.1642 remains active as only a weekly open and close below 1.4358 will confirm the rise from 1.1642 is complete at 1.6037. Intra day the EURUSD rise from the June 13, 2008 low at 1.5302 is complete at 1.6037 as the pair currently remains in a 1.5583-1.5756 consolidation zone as a sustained break of this zone will likely see further extension in the direction of the break.
EURUSD reached last weeks initial target of 1.6017 but failed to sustain prices above this level as the pair subsequently corrected lower to 1.5783 which is just a few pips shy of the 61.8% of the 1.5611-1.6037 rise. EURUSD remained within the 61.8%-38.2% of the 1.5611-1.6037 rise as a 2 hour close above 1.5931 will suggest another push higher towards 1.6 and beyond. As to the downside, a 2 hour close below 1.5847 will favor a move lower towards 1.5783 followed by 1.5737 (61.8% of the 1.5302-1.6037 rise). As to the broad outlook, the rise from the November 2005 low at 1.1642 remains active as only a weekly close below 1.4358 will confirm the rise from 1.1642 is complete at 1.6037, with further downside risk towards 1.3840 to follow. So, for the week ahead, look for a 2 hour close above 1.5931 to favor further upside towards 1.6 while only below daily close below 1.5727 suggest further consolidation with downside risk towards 1.5611.
As the week began, our outlook for the week was for a move lower in the US dollar and specifically a move higher in the EURUSD with the initial target at 1.6017 which was achieved. Once the EURUSD reach 1.6037, a few pips beyond our initial target, the US dollar corrected lower and saw the EURUSD essentially spend the remainder of the week within the 1.5774-1.5874 consolidation zone which is the 61.8% and the 38.2% of the 1.5611-1.6037 rise. We remain bullish EURUSD while the pair consolidates within the above mentioned zone and only if prices close on a daily basis below 1.5712 will the outlook favor further downside before another move higher.
Elsewhere, the JPY pairs and the CHF crosses where the best opportunities from mid week on but we were unable to see the pairs correct to our entry point and missed the greater part of the moves. Our GBPUSD and USDCHF trades earlier in the week were great calls but the stop loss orders barley filled before the two trades rallied for a combined 120 pips. So, for the month our performance remains positive as we are very confident that our winning performance of recent months will continue in the weeks and months ahead as we look forward to providing the excellence that our valued customers have come to expect.
The market has been bit whip saw today, especially in the US Dollar pairs as the EURUSD remains in a consolidation pattern from the 1.5302-1.6037 rise, while the 38.2% of the 1.6037-1.5799 correction at 1.5890 continues to hold. The only pairs trending today were the JPY and CHF crosses as there was little to no correction with these pairs today on the intra day charts which would have allowed us to send an alert to enter a long position. We are watching 168.03 level on EURJPY as this is the 61.8% of the 169.66-165.39 fall as this is sort of the line in the sand for the move lower and will need to hold for the fall from 169.99 to be considered impulsive as opposed to corrective. Our trading results remain modestly positive for the month as we are witnessing a bit more choppiness in the market thus far in July as opposed to the trend friendly environment favorable to our strategy during the months of April, May and June. We are very confident the month will remain positive and with a little favor we expect the remaining half of July to see favorable results and continue with our winning performance.
The FX market and the majors are consolidating the recent gains against the US dollar as the medium term and broad term outlook favors further US dollar weakness in the days ahead. In Asia today we saw broad Yen buying which enabled us to capture some small profits a EURJPY short trade and a AUDUSD short trade. Later in the European session our system confirmed a GBPUSD buy at 2.0080 with potential for a 2.0392 target while support ahead of 2.0000 holds. Unfortunately weaker than expected UK claimant count data resulted in broad GBP selling and eventually our stop loss was filled. In June we had 2 identical trade setups as today’s GBPUSD buy, where on June 12 we sold EURUSD at 1.5454 for a +134 pip profit and then again on June 25 we bought EURUSD at 1.5671 for a +119 pip profit, so, we will look for this setup again as this particular trade setup has always been profitable for us 85% of the time. As to the session ahead, intra day charts are a bit mixed as the US dollar is attempting to extend intra day gains against the EUR,GBP, and CHF while favoring weakness against the commodity currencies AUD, NZD, and CAD. With the US dollar a bit mixed as of this writing, the session ahead looks to be unfolding as one where caution is advised. We will have more updates later.
Last Friday saw EURUSD close the week at 1.5934, a new all time high weekly close, with the previous all time high weekly close occurring the week of April 13 at 1.5816. Essentially the FX market has been in a broad consolidation pattern as evidenced on the daily chart since achieving the all time high of 1.6017 on April 22, 2008. Until last Friday, only short term intra day trade opportunities have provided the best opportunities for low risk trades, as trends have failed to extended more than 1 or 2 days. Since April 22, sellers have been selling lower while buyers have been buying higher, however, this pattern clearly broke last Friday and what will likely follow is a continuation of the multi year decline in the US dollar. Near term, we expect a correction, but any gains in the US dollar will be limited and only provide opportunity to position for what will likely be continued decline in the US dollar as we move into the weeks ahead.
For most people who are not positioned for the events that are about to unfold, the weak dollar, rising commodity prices and rising energy cost will further escalate mortgage defaults, consumer credit defaults, and result in further decline is of US equities while at the same time inflation will weigh heavily on the US economy and consumer spending. It is with a heavy heart that we make such a statement, however, for those who are liquid and positioned properly, the opportunities will be very rewarding.
As we look back on similar historical chart patterns dating back to 2002, such patterns have provided low risk trade opportunities in the FX market and subsequently resulted in a trend friendly trading environment favoring potential for dramatic account gains in the months following such patterns. For example, in 2006, after a break of a near identical pattern in April 2006, the EURUSD rallied over 1,220 pips from April 2006 thru December 2006 and managed accounts gained 113.61% during the same period. (audited and verified by Spicer Jeffries, LLP). However, at this juncture, the fall in the US dollar could be much more dramatic as this is further supported by rapidly rising prices in oil, commodities and precious metals, of which, the later were somewhat stable during the 2006 fall of the US dollar.
So, it is with this thought in mind that we urge you and all those you personally know to position for what could be a tremendous opportunity in the weeks and months ahead.
EURUSD downside last week was limited by the 50% of the 1.5302-1.5907 rise as mentioned in last week’s outlook and closed the week at a new all time high weekly close at 1.5934. EURUSD rise from the June 13th low at 1.5302 remains active and now targets a retest of the April 22 high at 1.6017, with a sustained break targeting 1.6147 followed by 1.6428 in the weeks ahead. To the downside, intraday prices should hold initially above the 38.2% of the 1.5611-1.5969 rise at 1.5832 followed by the 50% at 1.5790, while only a sustained break of 1.5748 would suggest further consolidation from the 1.5302 rise before another attempt up. As to the broad outlook, the rise from the November 2005 low at 1.1642 remains active as only a weekly close below 1.4346 will confirm the rise from 1.1642 is complete at 1.6017, with further downside risk towards 1.3830 to follow. To the upside, look for a retest of 1.6017 while prices remain above the 1.5790-1.5832 zone.
The FX market continued to trade in a whipsaw manner for most of the Asian and European sessions today as intraday trends failed to sustain with risk for loss remaining unusually high for most of the session. However, as the US session arrived, US dollar selling was beginning to unfold and our system confirmed 3 excellent trade opportunities with EURUSD, GBPUSD and AUDUSD. Unfortunately, the AUDUSD alert was not issued in time to capture the move, but all three trades resulted in some nice intraday profits. As to our outlook for what lies ahead, the EURUSD is attempting to confirm a buy opportunity on the daily charts, and a close today above 1.5740 or ideally, a daily close at a new daily high, will favor more upside for EURUSD while prices remain above 1.5660. The last time our system confirmed a EURUSD buy on the daily chart was in March 2008 at 1.5610, as this trade subsequently reached 1.6017, which was a few pips shy of our 1.6052 target. The main difference with today’s potential daily chart potential buy opportunity and the one confirmed in March is the trend intensity today is much weaker than the trend intensity witnessed in March.
As for the month of July, the pace has been a bit slower than in previous months as risk for loss for the first few days of the month has been unusually high, so, when we detect uncertainty in the market, as determined by our analyst here at Forex Signals Plus, we find it best to stand aside until better opportunities unfold. So, for the month, the week and the day, Forex Signals Plus accounts are profitable for July and we look forward to providing the continued reliable service for those of you who have placed their trust in Forex Signals Plus.
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