Currencies - Daily Outlook

In these updates our focus is to identify the trend on the hourly chart - the so-called very short-term (VST) trend (this trend usually lasts several days to a few weeks) and to formulate a hypothetical trading strategy that usually aims for 90-180 point moves in the major currency pairs risking 40-70 points. This analysis is updated every day usually between 8:00 and 10:00 CET. If some larger and dramatic movements develop during the day, special updates may be posted during the day at any time. (CET stands for "Central European Time")

EURUSD
GBPUSD
USDJPY

Main analysis

Update for: 2012-02-07

Posted on: Tuesday, 07 February 2012 11:32

EURUSD: 1.3133

Very Short-Term Trend: sideways

Outlook:

Exactly as forecasted yesterday, EUR found support abv the 1.3000 level and rallied. Thus, the hourly sideways consolidation remains intact. You can trade this consolidation (between 1.3000 and 1.3200) as long as it lasts. The main question though is which direction this consolidation is going to break. Based on the pattern on the daily chart I belive that this consolidation is a continuation pattern. And therefore, the previous uptrend should resume this week. Firm break abv 1.3200 will confirm this bullish outlook.
On the downside, break below 1.3025 negates and signals a downside breakout has occured. In this case weakness twd 1.2870 will be expected....

Strategy: Stand aside.

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