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FX Majors Technical Outlook 20/8/2012

Last updated 8/19/2012 10:14 PM EST (GMT -5) 0 Comments - Add your comment

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Vito Henjoto

Technical Analyst, GFT

AUD/USD

The Aussie broke support @ 1.0440, technically breaking out of the range of the past 3 weeks between 1.0600 – 1.0440. The next immediate support level for the pair is located @1.0400 psychological round handle.

 Intraday, we could see the pair come back and retest several key levels. The pair is currently testing 1.0440, the previous support for the range, which also coincides with the 23.6% Fibonacci retracement from (A)-(B). Further resistances are located @1.0455(38.2% Fib retracement and 15 ^th August low) followed by 1.4693 (50% Fib Retracement).

The likely scenario is for the pair to retrace towards 38.2% or 50% Fibonacci retracement level, before looking for an opportunity to short the pair.

GBP/USD

Cable is a little unclear this morning, with the pair breaking out of the upper range on Thursday, and hanging on to 1.5700 handle on Friday. The pair is currently trading below the 1.5700 but as long as there is no hourly close below 1.5675, the pair could regain supremacy over the 1.5700 level.

Key level to watch out for intraday is the 1.5675 support, a close below this on the hourly chart signals a break of the psychological level 1.5700 to the downside.  On the other hand the pair needs to close above 1.5750 as confirmation the move to the upside is likely to continue.

One thing I would like to bring to attention here is the formation of a rising wedge, a rather flat wedge but nevertheless something to keep in mind. A rising wedge is normally a reversal pattern if the pair breaks below the support of the wedge.

EUR/USD

No new development on the EUR/USD, the pair is still within the Symmetrical triangle I have reviewed on Thursday and Friday. A breakout is still expected to occur either today or tomorrow.

Key Levels to watch out for beyond the triangle trendlines are the psychological resistance level @ 1.2400 – 1.2425 area. Support is located @1.2240 and 1.2200 psychological levels.

USD/CHF

Similarly with the EUR/USD, USD/CHF is still within a symmetrical triangle. The pair did stage a few tries to break out of the triangle (Circled), with no valid retest however and eventually moving back within the triangle. Notice that 0.9700 acts as a support for the pair during the breakout attempt. This solidifies the level as a strong support for the pair.

Key levels to watch out for are 0.9750 and 0.9800 as resistance and 0.9700 as support.

USD/JPY

The pair is currently trending up strongly, after breaking out of the channel last Wednesday (channel is highlighted by dotted trendlines). The next resistance for the pair is @80.00 psychological levels. It’s likely for USD/JPY to retrace once this level is reached. Support levels for the pair is currently located @ 79.25 (61.8% Fib retracement (A)-(B)) and 79.00, a round handle as well as the 50% Fib retracement level.  Should there be a rejection @80.00 it is likely for the pair to be traded within 79.00 and 80.00 ranges during the retracement period.

A break above 80.00 will open up the way for the pair to test June 2012 high as well as the 161.8% Fibonacci Extension (A)-(B) around the 80.60 area.

Follow me on Twitter @VHenjoto_GFT for up to date key levels in the market. 

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About The Author

Vito Henjoto started as his career in 2007 as a Market Analyst with FX Instructor and then Chief Technical Strategist at Forex CT, before joining GFT in 2011 as a Technical Analyst, focusing on the Asia Pacific region. Preparing daily technical analysis reports and keeping a close eye on the markets’ daily movements has given Vito an appreciation for the seemingly unpredictable volatility that traders both love and hate. As a Technical Analyst, Vito is well versed in a variety of technical indicators, but favours Ichimoku Kinko Hyo as his style of analysis and trading. Vito has run trading workshops in Australia and Asia throughout his trading career.