EUR/GBP, Downward Continuation December 29, 2010 (Daily Strategy)
EUR/GBP
The Euro – British Pound pair had risen to a new local level, pricking the major 0.8567 resistance level, but eventually closing deep under it. The low close at the end of the trading day had left a long tail creating the bearish key reversal pattern, signaling of a possible trend reversal.
A light negative deviation in the MACD indicator supports the expectations for a beginning of a downwards movement towards the support area that had succeeded in braking the pair in the previous two lows, around the 0.8370 level – our goal on the sell position.
Performed by Gerardo Porras Palomino, Analytical expert
InstaForex Companies Group © 2007-2010
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Fundamental Analysis, December 29, 2010
Asian trading continue this morning on a mixed trend as well, with a tendency for index declines, with the Tokyo stock exchange having dropped 0.5%, the Hong Kong exchange having dropped 0.8%, the Taiwan exchange having dived by 1.3%, whereas the Seoul exchange climbed by 0.8%. In the Asian macroeconomic sphere, the Tokyo Ministry of Commerce announced yesterday that industrial production in Japan had climbed by 1% in November, while the Japanese consumer price index had dropped at an annualized rate of 0.5%, as predicted by analysts.
In the American macroeconomic sphere, the consumer confidence index was published yesterday in the United States, recording an unexpected decline in December due to concerns over the state of the labor market. The index had declined to a level of 52.5 points in December, despite economists' predictions that it would climb to a level of 56.9. The consumer expectations index dropped to a level of 71.9 in December, as compared to a level of 73.6 in November.
Furthermore in the macroeconomic sphere, disappointing data had been published in the United States real estate market. The Case-Shiller home price index for the 20 largest cities in the United States has shown that the home prices in these cities had declined in October at a sharper rate than expected, another sign that the United States labor market is still slow to recover.
In Europe, the central statistics bureau in France had reported that the country's GDP grew slower than expected in the third quarter. The French economy grew by 0.3% in the third quarter, as compared to a 0.4% growth in the past month. The trade in Europe's stock markets had locked on a mixed trend yesterday, with the Frankfurt stock exchange having grown 0.02%, the Paris exchange having declined by 0.1%, and the Madrid exchange having climbed by 0.1%.
Performed by Gerardo Porras Palomino, Analytical expert
InstaForex Companies Group © 2007-2010
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The EUR/USD wave analysis for December 29, 2010
Yesterday’s quite volatile EUR/USD trading allowed the price to drop from yesterday’s highs to a level below the 31 figure. Thus, the euro has still been within the horizontal corridor, that currently has signs of triangular shape. If so, yesterday’s maximum 1.3278 can be apex of this triangle, or its part. In this case, after the d wave is completed we can expect a new turn of euro growth in the direction of the levels located near the 32 figure.
Performed by Alexander Dneprovskiy, Analytical expert
InstaForex Companies Group © 2007-2010
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The USD/JPY wave analysis for December 29, 2010
The USD/JPY pair collapse and testing of correction level 61.8%, calculated according to the November-December uptrend, supposes that the 3rd (or c) wave has formed within the downside section after December 15. As a result, the price might start advancing in favor of the dollar either from current levels, or after another attempt to test the 81.85 level.
Performed by Alexander Dneprovskiy, Analytical expert
InstaForex Companies Group © 2007-2010
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The EUR/USD technical analysis and trading recommendations for December 29, 2010
4-hour timeframe
Overview:
Euro has been demonstrating uncertain holiday movement, thus it is recommended to refrain from trading. The sell signal has been cancelled, instead a new buy signal with target level 1.3397 has been formed. The formed signal already became stronger and weakened back. In general the Ishimoku and the Bollinger Bands are indicating that highly volatile sideways movement has begun, which is extremely dangerous for trading. The Chinkou Span fixed above the price graph, which confirms the current buy signal and shows bullish sentiment. The Bollinger bands show sideways movement, the lines are not diverging and directed sideways. The MACD is descending, thus pointing to the current downside movement.
Trading recommendations:
Currently it is not recommended to trade until the pair stabilizes or until the beginning of trend movement, which is to be indicated by the Bollinger Bands.
In addition to technical image, one should take into account the fundamental data and the time of their release.
The chart annotation:
Ichimoku indicator:
Tenkan-sen — red line
Kijun-Sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator:
3 yellow lines
MACD indicator:
The red line and the histogram with white bars in the indicators window.
Performed by Stanislav Polyanskiy, Analytical expert
InstaForex Companies Group © 2007-2010
[URL=http://"http://instaforex.com/articles/"]More analysis - at
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