Wall Street continued the positive momentum yesterday, in spite the disappointing continuing jobless claims data that showed a growth of 7% in the unemployment.
The ECB kept the European interest rate at 1.0% and the Euro rose after the announcement, thought the ECB press conference did not put a new light regarding the debt problem of the PIIGS countries.
USD/JPY
The USD has been strengthening against some of the major currencies since the beginning of the year, but the Japanese Yen was not impressed by that. Last week, when the pair traded around the support of 76.5, we estimated that it would not break-down and would correct up. The USD did correct against the Yen as we estimated, but now the price is close to the support again.
The bearish pattern of the "head & shoulders" appears on the daily chart and a break-down of the support might take the Yen to the historical level of 75.5. However, even if the JPY eventually breaks-down, the central bank of the Japan might interfere in case the price slides under 76.0 (or even sooner), so any trade-idea on this direction has to consider this option.
AUD/USD
As we estimated, the simultaneous pressure of both buyers and sellers on the pair caused the price to change its direction several times in a short period. The level of 1.02 is still the pivot level of the triangle pattern, and the price goes back to this level each time it touches one of the triangle's edges. Yesterday, the Aussie tried to break-out the upper hedge but left the tail above and slid under the edge right after the break-out. This does not mean that the attempt for rising has failed and if the Aussie rises above yesterday's high and above the 200 SMA at 1.04-1.0410, it might signal that the buyers won the battle against the sellers and the price might continue to 1.07.
NZD/USD
Unlike the Aussie, the Kiwi has already broken-out the triangle pattern on the daily chart. Before the break-up occurred, we mentioned few elements that suggested that the NZD was about to break-up. The most powerful signal that we analyzed was the fact that the pair started the "higher-lows" pattern, which is an important technical sign when you look for a bullish trend. The pair is approaching the target we set at the 200 SMA and it might correct down from this level. However, a break-up of the 200 SMA might launch the price to the next resistance at 0.825.
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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