Forex Daily Analysis 2012-01-04

Wall Street opened the financial year with risings of 1.7% and positive expectations of the investors regarding 2012. Oil, metals and other commodities rose as well, despite the concerns from another recession that will reduce the demands for the commodities.

On the technical aspect, Dow Jones broke the resistance at 12330 and it is moving towards 12500. The S&P 500 is approaching the strong resistance at 1300 and a break-up there might take it to 2011's high at 1370 points. NASDAQ was not left behind the two major indices but it does not look as bullish as the other indices. The technology index is facing the resistance at 2350 points, on its way to the level of 2500 points.

AUD/USD

We analyzed this pair few weeks ago and demonstrated the triangle pattern that appeared in the daily chart. We estimated that a break-down or a break-up was about to occur as the price got closer to the psychological number of 1.0. The pair eventually broke-up last week, and the break-up was as powerful as we figured. The Aussie reached the resistance of the 200 SMA, which it failed to break four times during the 4^th quarter of 2011. A successful break-up might lift the pair up to 1.075, but stochastic levels show that the pair might correct down from this point.

NZD/USD

The triangle pattern appeared also on the Aussie's little brother, the Kiwi. However, the triangle here was ascending and the pressure of the buyers was much obvious. The pair broke through the resistance at 0.78 and it is now moving towards the 200 SMA at 0.80, which is an important level that the Kiwi has to break-through in order to determine that a new bullish trend has begun. As long as the pair keeps the higher-lows pattern that started on the end of November, it will have better chances to continue the current session.

NZD/CHF

The risings of the stocks weakened the USD and the CHF took the opportunity to correct against it. However, the move of the NZD against the USD was relatively stronger than the CHF's and therefore the pair NZD/CHF rose yesterday. In fact, the NZD has been rising against the CHF for 5-6 weeks and it broke an important resistance at 0.73. The pair is now moving towards the next resisting area at 0.755-0.76 and it will stay bullish as long as the price remains above the support of 0.70.

Risk Disclosure

Trading and the execution of transactions in currencies, commodities,CFD  indexes and other financial products with or without using  high financial leverage, is speculative trading of high risk and may cause substantial gain or loss proportional to the size of the collateral, up to the total loss of the collateral sum in a very short period. The fluctuation of the prices and rates in the currency markets, commodities, CFD ,indexes and other  financial derivatives are often volatile and there is no accurate   forecasting as per the size of the change, its direction and the time frame in which it occurs.You must consider carefully and seriously if this type of financial activity fits your needs, your financial resources and personal circumstances. Since the risk of losing some of the invested funds or all the funds in a relative short period is high; it is recommended that you use for that purpose funds which you designated for speculative financial transactions of high risk.

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