FOREX Daily Analysis 2012-02-23

The US stock markets closed a negative trading day in spite of the approval of additional 130 billion Euros for Greece, as part of the bailout plan. However, other geo-political threats are affecting the markets, as the commodities such as oil and metals keep rising.

GBP/USD

Since the pound failed in breaking the 200 SMA earlier this month, it keeps loosing points against the USD. The pair fell to the support at 1.565 and rose from this level but made a lower-highs pattern that indicates of a bearish momentum in the pair. The price reached this support yesterday and a strong break-down might take the GBP down to the level of 1.55. If the stock markets continue the bearish momentum, it will help the USD and weaken the other major currencies, including the GBP. However, the support might pull back the buyers and lift the GBP higher.

GBP/CHF

The CHF is not making any significant movement against the USD these days, and it traded around 0.91, as many short position players are waiting for a strong break-up there. However, the SNB might interfere in case the CHF gains power again and this should be a warning for those who are waiting for the strengthening of the Swiss Franc.

The pair GBP/CHF broke an important support on the daily chart, at 1.435 and many sellers that enter the market during this break-down caused sharp declines. The pair is approaching the 4-months low as the current support is at 1.427, and strong break-up there might slide to 1.415.

EUR/CAD

The EUR did not lose points against the USD yesterday, unlike the other major currencies that weakened against the American dollar. The "Cup & Handle" pattern, which we analyzed in the daily chart, is still valid, so stay alert for a break-up.

The USD has corrected against the CAD in the recent three trading days, and therefore the EUR/CAD is rising. The pair has moved between the support at 1.30 and the resistance at 1.325 for several weeks and it is now trying to break-through the resistance. If it succeeds, the pair might jump to 1.34. However, if the current pattern remain, the pair should turn over from this point and slide downwards to 1.30-1.31.

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.

 You acknowledge and fully understand that there may be more and other risks which are not detailed or not cotained above