USD Bullish But Overbought VS Most Major FX This Week -- Charting Forex

 
   By Jerry Tan 
 

        The following is a technical analysis of seven major currency pairs for this week:
        USD/JPY
        1st support - 120.00 (minor)
        1st resistance - 120.82 (minor)
        2nd support - 119.31 (minor)
        2nd resistance - 120.99 (minor)
        USD/JPY (last 120.48) is likely to consolidate with a bullish bias this week as the five-day moving average is above 15-day moving average and advancing. Resistance is at Tuesday's high of 120.82. A breach would target the Dec. 9 high of 120.99, and then 121.86--the seven-year high hit on Dec. 8 high. An extension of the rise would target the July 9, 2007 high of 123.66. Support is at Thursday's low of 120.00. A breach would expose the downside to the Dec. 22 low of 119.31, and then to the Dec. 18 low of 118.26. An extension of the fall would target the Dec. 16 reaction low of 115.56. The medium-term USD/JPY outlook is positive as the five- and 15-week moving averages are advancing. A rise above 121.86 would target the June 22, 2007 swing high of 124.16, and then the Dec. 5, 2002 reaction high of 125.70 in the weeks ahead.
        EUR/USD
        1st support - 1.2165 (minor)
        1st resistance - 1.2273 (minor)
        2nd support - 1.2132 (minor)
        2nd resistance - 1.2302 (minor)
        EUR/USD (last 1.2189) is likely to trade with risks skewed to the downside this week as long as the currency pair stays below the Dec. 22 high of 1.2273. The five- and 15-day moving averages are declining, but the daily slow stochastic measure is at oversold levels. Support is at 1.2165, the two-year low hit Tuesday. A breach would target the Aug. 2, 2012 low of 1.2132; and then the July 31, 2012 swing low of 1.2040. An extension of the fall would target the psychological 1.2000 line, and then the June 7, 2010 swing low of 1.1875. But a rise above 1.2273 would temper the negative near-term view, targeting the Dec. 19 high of 1.2302; and then the 55-day moving average, now at 1.2473. An extension of the rise would target the Dec. 18 reaction high of 1.2570, and then the Nov. 19 reaction high of 1.2602. The EUR/USD medium-term outlook is negative as the five- and 15-week moving averages are declining. A drop below 1.2040 would target the 1.1875 level, and then the Nov. 17, 2005 swing low of 1.1638 in the weeks ahead. An extension of the fall would target the Nov. 7, 2003 reaction low of 1.1375.
        AUD/USD
        1st support - 0.8084 (minor)
        1st resistance - 0.8173 (minor)
        2nd support - 0.8065 (moderate)
        2nd resistance - 0.8235 (minor)
        AUD/USD (last 0.8120) is likely to trade with risks skewed to the downside this week as long as the currency pair stays below the Dec. 22 high of 0.8173. The five- and 15-day moving averages are declining, but the daily slow stochastic measure is at oversold levels. Support is at 0.8084, the four-and-a-half year low hit Tuesday. A breach would target the May 25, 2010 swing low of 0.8065, and then the psychological 0.8000 line. An extension of the fall would target the July 13, 2009 reaction low of 0.7700. But a rise above 0.8173 would temper the negative near-term view, targeting the Dec. 17 high of 0.8235, and then the Dec. 16 high of 0.8274. An extension of the rise would target the Dec. 11 high of 0.8375, and then the Dec. 4 high of 0.8429. The AUD/USD medium-term outlook is negative as the five- and 15-week moving averages are declining. A drop below the 0.8065 support would expose the downside to the 0.7700 level, and then to the psychological 0.7000 line in the weeks ahead.
        NZD/USD
        1st support - 0.7690 (minor)
        1st resistance - 0.7796 (minor)
        2nd support - 0.7679 (minor)
        2nd resistance - 0.7848 (minor)
        NZD/USD (last 0.7754) is likely to consolidate this week after completing an inside-week-range pattern on the weekly chart Friday. Support is at Tuesday's low of 0.7690. A breach would tilt the near-term outlook negative, targeting the Dec. 18 reaction low of 0.7679, and then 0.7606--the two-and-a-half year low hit Dec. 9. An extension of the fall would target the June 1, 2012 swing low of 0.7451; and then the Nov. 25, 2011 swing low of 0.7367. Resistance is at the Dec. 19 high of 0.7796. A breach would turn the near-term outlook positive, targeting the Dec. 16 high of 0.7848, and then the Dec. 11 reaction high of 0.7870. An extension of the rise would target the Dec. 1 high of 0.7910, and then the Nov. 27 high of 0.7926. The medium-term NZD/USD outlook is negative as the five- and 15-week moving averages are declining. The currency pair may fall to the 0.7451 and 0.7367 levels, and then to the March 17, 2011 reaction low of 0.7113 in the weeks ahead. But a rise above the Oct. 21 reaction high of 0.8033 would temper the negative medium-term view.
        GBP/USD
        1st support - 1.5484 (minor)
        1st resistance - 1.5682 (minor)
        2nd support - 1.5426 (moderate)
        2nd resistance - 1.5785 (moderate)
        GBP/USD (last 1.5569) is likely to trade with risks skewed to the downside this week as long as the currency pair stays below the Dec. 19 high of 1.5682. The five-day moving average is below the 15-day moving average and declining, but the daily slow stochastic measure is at oversold levels. Support is at 1.5484, the 16-month low hit Tuesday. A breach would target the Aug. 28, 2013 reaction low of 1.5426; and then the Aug. 7, 2013 low of 1.5205. An extension of the fall would target the Aug. 2, 2013 reaction low of 1.5101, and then the psychological 1.5000 line. But a rise above 1.5682 would temper the negative near-term view, targeting the Dec. 16 reaction high of 1.5785 which is currently near the 55-day moving average. An extension of the rise would target the Nov. 27 reaction high of 1.5825, and then the Nov. 11 reaction high of 1.5944. The medium-term GBP/USD outlook is negative as the five- and 15-week moving averages are declining. A drop below the 1.5426 support would open the way down to the 1.5101 level; and then to the July 9, 2013 swing low of 1.4812 in the weeks ahead.
        USD/CHF
        1st support - 0.9785 (minor)
        1st resistance - 0.9886 (minor)
        2nd support - 0.9648 (minor)
        2nd resistance - 0.9972 (moderate)
        USD/CHF (last 0.9868) is likely to trade with risks skewed to the upside this week as long as the currency pair stays above the Dec. 19 low of 0.9785. The five- and 15-day moving averages are advancing, but the daily slow stochastic measure is at overbought levels. Resistance is at 0.9886--the two-year high hit Thursday. A breach would expose the upside to the July 24, 2012 swing high of 0.9972, and then to the psychological 1.0000 line. An extension of the rise would target the Dec. 1, 2010 reaction high of 1.0066. But a drop below 0.9785 would temper the positive near-term outlook, exposing the downside to the 55-day moving average, now at 0.9648, and then to the Dec. 16 reaction low of 0.9552. An extension of the fall would target the Nov. 19 reaction low of 0.9530, and then the Oct. 29 reaction low of 0.9439. The USD/CHF medium-term outlook is positive as the five- and 15-week moving averages are advancing. A breach of the 0.9972 resistance--near the 61.8% Fibonacci retracement of the decline from the June 1, 2010 high of 1.1730 to the Aug. 9, 2011 low of 0.7085--would target the 1.0066 level, and then the 76.4% Fibonacci retracement level of 1.0624 in the weeks ahead.
        USD/CAD
        1st support - 1.1545 (minor)
        1st resistance - 1.1673 (minor)
        2nd support - 1.1443 (minor)
        2nd resistance - 1.1724 (moderate)
        USD/CAD (last 1.1627) is likely to consolidate this week as long as the currency pair stays below 1.1673, the five-year high hit Dec. 17. The daily chart is mixed with the five-day moving average meandering sideways above the rising 15-day moving average. A rise above 1.1673 would tilt the near-term outlook positive, targeting the July 8, 2009 reaction high of 1.1724; and then the May 18, 2009 high of 1.1814. An extension of the rise would target the psychological 1.2000 line. Support is at the 1.1557-1.1545 band, marked by the Dec. 17 low and the Dec. 15 low. A drop below 1.1545 would tilt the near-term outlook negative, targeting the Dec. 11 low of 1.1443, and then the Dec. 9 low of 1.1394 which is currently near the 55-day moving average. An extension of the fall would target the Dec. 4 low of 1.1336, and then the Dec. 1 low of 1.1310. The medium-term USD/CAD outlook is positive as the five- and 15-week moving averages are advancing. A breach of the 1.1724 resistance would target the psychological 1.2000 line, and then 1.2200--the 76.4% Fibonacci retracement of the decline from the March 9, 2009 high of 1.3063 to the July 26, 2011 low of 0.9403--in the weeks ahead.
        Write to Jerry Tan at jerry.tan@wsj.com
        This is a financial news and information service. It is provided in general terms and does not take account of or address any individual user's position. To the extent that this article includes suggestions as to various possible investment strategies which users might consider, it does so in only general terms without reference to the personal factors which should determine any user's investment decisions. Nothing contained in this service constitutes personalized investment advice. Dow Jones does not warrant the accuracy, completeness or timeliness of the information in this article, and any errors shall not be made the basis for any claim against Dow Jones. The author does not invest in the instruments or markets cited in this article. This article does not constitute or form part of any invitation or inducement to buy or sell any security.
        (END) Dow Jones Newswires

        December 28, 2014 21:17 ET (02:17 GMT)

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