The Daily Forecaster: GBPUSD

Price: 1.6527

Bias: I look for a dip to the 1.6358-87 area before seeing the next leg higher Daily Bullish Yesterday's gains were quite impressive. However, I feel they may well have completed this part of the correction at 1.6585. However, I can't say the correction has been too deep and we should therefore be aware of the risk of the possibility of a minor new high. However, I feel the risk of reversal is probably too high and would prefer to sell into any rally rather than ride any move up. If we move above 1.6567 the chances of a new high become stronger but I'd still expect the 1.6585-1.6621 area to cap. Thus, only a break above 1.6621 would see a spike up to 1.6653-87 before lower again. Medium Term Bullish 9th September: The rally has been developing as suggested and we have only completed two sections of the correction. Thus while 1.6350-00 supports I still look for a final rally (probably by next week) above 1.6621 but then we'll have to watch resistance at 1.6687 and 1.6732. Daily Bearish I prefer a scenario calling for the current strength we are seeing this morning to be a correction higher and thus it shouldn't move above the 1.6567-85 area. However, wait for a bearish reversal pattern to confirm as there is a minor risk we could see a small extension into the 1.6585-1.6621 area. Thus, at all stages be aware of the risk of a bearish reversal pattern developing. Assuming the high is below 1.6585 I feel we should quickly move down to the 1.6482 low seen thus far and then watch supports at 1.6430-37 and more likely somewhere between 1.6358-87. Medium Term Bearish 9th September: Another leg higher has been seen and it looks like we'll get a better selling opportunity above 1.6621 - most likely around 1.6653-87 or as high as 1.6732. Only an earlier break below 1.6322-58 would send price lower directly.

Resistance 1.6534 1.6567 1.6585 1.6621 1.6653-87 1.6732 Support 1.6482 1.6462 1.6430-37 1.6387-00 1.6358 1.6322

Ian Copsey
FX-Forecaster

Daily Technical Analysis

EURUSD Outlook

As you can see on h4 chart below, after trapped in range area for two weeks, the EURUSD finally breakout from the range area, topped at 1.4534 (the highest level in 2009) and closed at 1.4493 yesterday. For me this is nothing but a bullish confirmation targeting 1.4719 (December 18 high) in longer term. The bias is bullish in nearest term targeting 1.4590 area. However, CCI in overbought area and heading down on h4 chart so watch out for potential downside rebound testing 1.4446 support area (former resistance). Break below that area should lead us into no trading zone as the direction would become unclear

GBPUSD Outlook

The GBPUSD had a significant bullish momentum yesterday. On h4 chart below we can see that the pair break convincingly above the trendline resistance (yellow, now become support), topped at 1.6586 but closed lower at 1.6500. The new bullish channel (blue) indicating a bullish scenario. The bias is bullish in nearest term targeting 1.6640 area. However CCI in overbought area and heading down on h4 chart so watch out for potential downside pullback testing 1.6480/30 area. Break below that area should lead us into no trading zone.

USDJPY Outlook

The USDJPY bullish correction was stopped yesterday as the pair hit daily low at 92.02 and closed at 92.28. The inverse H&S failed to make further bullish correction and we are now seem to ready to continue the bearish scenario. However, we have a good support around 91.80 area. Break below that area should trigger further weakness for the Dollar testing 90.70 area. Immediate resistance is seen at 92.40/60 area. Break above that area should lead us into no trading zone.

USDCHF Outlook

Finally we have a break from the range area. As you can see on h1 chart below, the pair break below support 1.0527, bottomed at 1.0431 and closed at 1.0464. This breakdown should lead us to further bearish scenario at least targeting 1.0390 and 1.0325 in nearest term. However, CCI just cross the -100 line up on h1 chart so watch out for potential upside rebound testing 1.0490 - 1.0527 resistance area. Break above that area should lead us into no trading zone.

EURJPY Outlook

The EURJPY had a moderate bullish momentum yesterday. On h4 chart below we can see that the bearish channel (red) has been violated to the upside indicating bearish failure while the bullish channel (blue) give us a bullish view. The bias is bullish in nearest term targeting 134.50 and 135.30 but we seem to have good resistance around 133.85 area. Break above that area should trigger further bullish momentum. Immediate support is seen at 133.40. Break below that area should lead us into no trading zone as the direction would become unclear.

GBPJPY Outlook

The GBPJPY made indecisive movement yesterday. The pair attempted to push lower, bottomed at 151.32 but closed higher at 152.27. A look at h4 chart below reveals that the pair is actually in bullish correction phase, making a new bullish channel, struggling around 23.6 Fibo retracement of 163.05 - 149.02. As long as the bullish channel hold, expect further bullish correction towards 154.35 (38.2% Fibo retracement of 163.05 - 149.02). The bias is neutral in nearest term. Immediate support is seen at 151.15

AUDUSD Outlook

The AUDUSD continue it's bullish momentum yesterday, topped at 0.8657 and closed at 0.8617. On h1 chart below we can see how triangles formation can be very useful to spot a bullish momentum every time the triangle made a breakout. We are no in triangle number 3, moving in bullish channel indicating potential bullish momentum if we have another triangle breakout targeting 0.8730 area. Immediate support at 0.8600 - 0.8570. Break below that area should lead us into no trading zone.

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PRECIOUS METALS RECAP

December Gold closed up 3.1 at 999.8. This was 4.7 up from the low and 9.9 off the high.

December Silver finished up 0.225 at 16.51, 0.285 off the high and 0.125 up from the low.

Technical Outlook

COMEX SILVER (DEC) 09/09/2009: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's short-term rend is positive on the close above the 9-day moving average. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside objective is at 1717.3. The market is becoming omewhat overbought now that the RSI is over 70. The next area of resistance is around 1679.2 and 1717.3, while 1st support hits today at 1609.8 and below there at 1578.4.

COMEX GOLD (DEC) 09/09/2009: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside target is 1015.4. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 1004.0 and 1015.4, while 1st support hits today at 987.0 and below there at 981.3.

CURRENCY MARKET RECAP

September US Dollar closed down 0.825 at 77.340. This was 0.275 up from the low and 0.830 off the high.

September Euro closed up 1.81 at 144.9. This was 1.87 up from the low and 0.46 off the high.

September Japanese Yen finished up 0.78 at 108.29, 0.37 off the high and 1.1 up from the low.

September Swiss finished up 1.23 at 95.54, 0.32 off the high and 1.26 up from the low.

September Canadian Dollar finished up 0.51 at 92.61, 1.09 off the high and 0.63 up from the low.

September British Pound closed up 0.92 at 164.9. This was 1.68 up from the low and 0.99 off the high.

Technical Outlook

JAPANESE YEN (SEP) 09/09/2009: Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The close above the 9-day moving average is a positive short-term indicator for trend. The daily closing price reversal up is a positive indicator that could support higher prices. With the close over the 1st swing resistance number, the market is in a moderately positive position. The next downside objective is now at 106.66. The next area of resistance is around 109.05 and 109.59, while 1st support hits today at 107.59 and below there at 106.66.

EURO (SEP) 09/09/2009: Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside objective is at 146.87. The next area of resistance is around 146.06 and 146.87, while 1st support hits today at 143.74 and below there at 142.22.

STOCK INDICES RECAP

September S&P closed up 11.1 at 1025. This was 5.8 up from the low and 0.7 off the high. September S&P E-Mini finished up 11 at 1025, 2 off the high and 6.5 up from the low.

September Dow finished up 81 at 9498, 7 off the high and 48 up from the low.

Technical Outlook

S&P 500 (SEP) 09/09/2009: Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The market's close above the 9-day moving average suggests the short-term trend remains positive. The close over the pivot swing is a somewhat positive setup. The next upside objective is 1031.92. The next area of resistance is around 1029.05 and 1031.92, while 1st support hits today at 1020.95 and below there at 1015.73.

S&P E-MINI (SEP) 09/09/2009: Positive momentum studies in the neutral zone will tend to reinforce higher price action. The market's short-term trend is positive on the close above the 9-day moving average. Market positioning is positive with the close over the 1st swing resistance. The next upside objective is 1032.37. The next area of resistance is around 1029.25 and 1032.37, while 1st support hits today at 1020.75 and below there at 1015.38.

NASDAQ (SEP) 09/09/2009: Momentum studies are trending higher from mid-range,
which should support a move higher if resistance levels are penetrated. The market's short-term trend is positive on the close above the 9-day moving average. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside objective is at 1665.62. The next area of resistance is around 1661.75 and 1665.62, while 1st support hits today at 1648.25 and below there at 1638.63.

DOW (SEP) 09/09/2009: The daily stochastics have crossed over up which is a bullish
indication. Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. A positive signal for trend short-term was given on a close over the 9-bar moving average. There could be more upside follow through since the market closed above the 2nd swing resistance. The next upside target is 9569. The next area of resistance is around 9537 and 9569, while 1st support hits today at 9463 and below there at 9420

ENERGY MARKET RECAP

October Crude Oil closed up 3.29 at 71.31. This was 3.77 up from the low and 0.48 off the high.

October Heating Oil closed up 6.33 at 178.38. This was 7.54 up from the low and 2.60 off the high.

October RBOB Gasoline finished up 5.79 at 183.42, 2.73 off the high and 8.13 up from the low.

October Natural Gas finished up 0.11 at 2.84, 0.05 off the high and 0.22 up from the low.


Technical Outlook

CRUDE OIL (OCT) 09/09/2009: The major trend could be turning up with the close back above the 60-day moving average. Declining momentum studies in the neutral zone will tend to reinforce lower price action. The intermediate trend could be turning up with the close back above the 18-day moving average. The market's close above the 2nd swing resistance number is a bullish indication. The next downside target is 66.24. The next area of resistance is around 73.43 and 74.73, while 1st support hits today at 69.19 and below there at 66.24.

RBOB GAS (OCT) 09/09/2009: The major trend could be turning up with the close back above the 60-day moving average. Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market setup is supportive for early gains with the close over the 1st swing resistance. The next downside target is 171.18. The next area of resistance is around 188.78 and 192.89, while 1st support hits today at 177.92 and below there at 171.18.

HEATING OIL (OCT) 09/09/2009: Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. There could be more upside follow through since the market closed above the 2nd swing resistance. The next downside target is 167.01. The next area of resistance is around 183.45 and 187.28, while 1st support hits today at 173.31 and below there at 167.01.

BOND MARKET RECAP

December Bonds finished down 0-150 at 118-190, 0-250 off the high and 0-040 up from the low.

December 10 Yr Treasury Notes closed down 0-005 at 117-005. This was 0-045 up from the low and 0-110 off the high.

Technical Outlook

BONDS (SEP) 09/09/2009: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The close under the 18-day moving average indicates the intermediate-term trend could be turning down. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is 119-040. The next area of resistance is around 120-100 and 120-310, while 1st support hits today at 119-130 and below there at 119-040.10

YR TREASURY NOTES (SEP) 09/09/2009: Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. The market's close below the 9-day moving average is an indication the short-term trend remains negative. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is now at 117-305. The next area of resistance is around 118-185 and 118-290, while 1st support hits today at 118-035 and below there at 117-305.