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<Back to Latest Research
TECHNICAL UPDATE – Key levels & charts to watch

Updated Feb 20, 2013 6:35:00 PM By Chris Tevere, CMT

FX MAJORS:

  • EUR/USD failed yet again into the 13-day sma overnight and traded sharply lower throughout the day (forming a bearish engulfing candlestick in the process). The break below 1.3310/00 – which saw the convergence of the 50-day sma, 38.2% retracement of the rally from November 2012 as well as the December 2012 highs, opens the door to further potential downside. Should the previous lows from mid-January near 1.3265/55 give way then we could see a test of trendline support (drawn from the 2012 low) around 1.3220/10 initially, which also sees the top of the daily Ichimoku cloud, followed by 1.3170/65 (September 2012 highs) thereafter.
  • USD/JPY continues to find difficulty into the long-term 38.2% retracement (of the 2007 to 2011 decline) around 94.00 as well as the previous 2010 highs near 95.00 that we noted a few weeks ago – See TECHNICAL UPDATE. That being said, pullbacks have been rather limited as 92.25/15 has proved to be staunch support over the past few weeks. Interestingly, USD/JPY sees a positive reversal with daily RSI, whereby price made a higher low but RSI made a lower low, and this produces a measured target of 94.40, which is just pips shy of the current 2013 high
  • GBP/USD continues to get hit hard after taking out long-term trendline support around 1.5635/30 last week – See “THE POUNDING CONTINUES…”. Furthermore, it achieved two of the levels noted: 1.5350, which was the measured move objective from 1.63 Double Top and 1.5270/35 which saw the June & January 2012 lows. This leaves very little in the way of technical support ahead of the psychological 1.50 level, whereby it could find bids as it is likely to find option/barrier related interest.
  • NZD/USD took out the psychological 0.8500 level last week, however it was unable to overcome the longer-term 78.6% retracement (of the 2011 decline) around 0.8530, and still remained below the prior August 2011 high near 0.8570 – See TECHNICAL UPDATE. That said, it presently remains just above the top of the daily Ichimoku Cloud and trendline support, drawn from the 2012 low, which both reside at 0.8245 and furthermore has been making a series of higher highs & higher lows since the turn of year (definition of an uptrend). Accordingly, while it remains above this level it will maintain its bullish bias, however should the Kiwi take out the 0.8295/65 area – Convergence of the 1/28 & 2/7 lows, 100-day sma & bottom of Ichimoku Cloud, this could meaningfully alter its technical landscape over the ensuing days/weeks.
  • USD/CAD has continued to rally after bouncing off the daily 144 & 169 EMA’s/top of the daily Ichimoku Cloud around 0.9940. The break above 1.0100 at the start of the week now brings our noted 1.0215 level into focus, which sees the convergence of channel resistance, 2 Fibonacci extensions, the 200-week sma as well as the top of the weekly Ichimoku Cloud – See TECHNICAL UPDATE.

COMMODITIES & EQUITIES:

  • US Oil (WTI)1 failed twice over the past month into the 61.8% retracement, of the 2012 decline, around $97.90/00 and formed a double top in the process – Furthermore, this was coincided by a daily RSI bearish divergence. Today’s break below $95.00 (the low between the highs) confirms the double top pattern and projects a measures move objective of $92.00.
  • XAU/USD (Gold) took out the key $1630/25 level, which saw the convergence of the previous 2013 low & 61.8% retracement of the May to October 2012 rally, last week. The ensuing sell-off has been rather sharp and swift, especially after it took out the psychological $1600 level earlier today. Presently there is very little remaining in the way of technical support ahead of the 2012 lows between $1527/22.
  • XAG/USD (Silver) has been getting hit after taking out long-term trendline support drawn from the 2008 low around $29.30/20 – See Friday’s CHART TO WATCH. Should the highs from July & August 2012 ($28.45/35) give way, it could lead to a further decline towards $26.45/15 thereafter, which is a confluence of multiple lows from 2011 & 2012.
  • S&P5001 formed a massive bearish engulfing candlestick today, consuming the previous 6 daily candle’s in the process – Furthermore, this was coincided by a daily RSI bearish divergence. With RSI (14) already breaking below its previous low, it puts great emphasis on the S&P500’s February low around 1495.

1 Reference is for informational purposes only and is not offered to US clients

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Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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