Currency Technical Report

EUR/USD

Resistance :1,4840-50/ 1,4880/ 1,4910-30/ 1,4960/ 1,5000
Support : 1,4770/ 1,4740/ 1,4700-10/ 1,4675-80/ 1,4650/ 1,4610-20/ 1,4570

Comment : Euro was expected to move to new tops after Monday's daily close and the market's reaction at 1,4620-40 support levels. Important technical resistance emerges at 1,4860-4920 area and a correction is likely to be formed from these levels. However the rise could be resumed after this correction. As we had mentioned in previous analysis, the outlook in the weekly chart and the extensions from the sideways formation since summer, allow a move resumption towards 1,5100-50 or 1,5250-00, where important resistance is found. In the end of today's analysis you can see chart of Dow Jones, DAX 30, crude oil and gold. The high correlation level between EUR/USD and commodities and equities is known. As you can see in these charts, stock indices have higher targets and their rise is likely to be resumed. Gold and crude oil are testing important resistance levels and if they are breached, their price could reach new highs. If the technical outlook is confirmed, EUR/USD will continue its rise and higher targets will be achieved…

First important resistance emerges at 1,4900 area, and a retracement from these levels is possible. However, the trend remains bullish until we see reversal signs or the break of important support levels.

First intraday support emerges at 1,4740-70, which should not be breached in order to see an immediate rise resumption. Next support should be found at 1,4700, but the most important are will be 1,4650 area. A move below Monday's lows (1,4610), could lead to a wider correction or a sideways formation. In that case, all scenarios will be open…

STRATEGY

Fed's interest rate announcement is expected to cause high volatility in the markets and it would be wise to stay out of the market at this time.

During the European session, we could try buy orders at a possible correction towards 1,4770, adding positions at 1,4740, and placing stops below 1,4700. Our target will be at 1,4840-60 or even 1,4900 area.

Sell orders could be tried at 1,4900-30 with stops above 1,4970 and target at 1,4800-20.

The above mentioned strategy refers to orders that we may follow for personal accounts, depending on the market analysis and the potential reach of resistance and support levels. We do not encourage buy or sell orders, as its effective use is based on correct risk management and the ability of position readjustment depending on current conditions

FX Greece

Mizuho Corporate Bank strategy

EURUSD

Comment: A mess around midnight London time took the Euro to a new high for this year at 1.4843 (Kiwi leading the way higher). The 9-day moving average limited the downside yesterday and will hopefully do so again today. Note that we are witnessing generalised US dollar weakness rather than Euro gains.

Strategy: Buy at 1.4800, adding to 1.4700; stop below 1.4600. Add to longs on a break above 1.4875 for 1.5000 medium term and more long term

Direction of Trade: →

Chart Levels:

Support	Resistance
1.4784 "	1.4843/1.4863*
1.475	1.4925
1.47	1.4956/1.4968*
1.4677	1.5
1.4600*	1.5085

GBPUSD

Comment: Very difficult as we bounce once again from trendline support, hovering nastily either side of 1.6350, yet still facing a potential 'head-and-shoulders' top. Be very careful, keeping in mind that open interest has collapsed.

Strategy: Possibly attempt tiny longs at 1.6390; stop below 1.6100. First target 1.6400, then 1.6600.

Direction of Trade: →

Chart Levels:

Support	Resistance
1.6357 "	1.6415
1.6275	1.6454
1.62	1.65
1.6134/1.6100*	1.66
1.5985	1.6664

USDJPY

Comment: Dropping towards 90.00 again, as expected, with nasty moves around 00:30 GMT. While below 92.00, which neatly capped the Lagging Span, and the nine-day average at 91.34 today downside pressure is maintained for a re-test of very important very long term support at 87.10. Note that the US dollar is not oversold.

Strategy: Attempt shorts at 90.75, adding to 91.25; stop well above 91.65. Short term target 90.35/90.00 and then scarily lower still.

Direction of Trade: →

Chart Levels:

Support	Resistance
90.65 "	91
90.47	91.19/91.34
90.18/90.00*	91.65
89.7	92.03
88.50*	92.55*

EURJPY

Comment: Taking a back seat as the US dollar gets hammered. Yen crosses are mixed with NZD/JPY hitting a new high for the year while this one retreats from the upper edge of the daily Ichimoku 'cloud'. Lets see if it will drop towards the moving averages at the end of this week.

Strategy: Attempt small shorts at 134.30/134.85; stop above 135.55. Add to shorts below 133.70 for 132.80 and then 131.00.

Direction of Trade: →

Chart Levels:

Support	Resistance
134.00 "	134.6
133.7	134.88
133.55	135.35
133.4	135.5
132.46	136.09

Mizuho Corporate Bank

Technical Analysis for Major Currencies

EURO

The Euro versus Dollar pair surged to the upside to near our initial target for the intraday uptrend at 1.4875. We see in the above image that trading is within a bullish channel continuing the intraday uptrend with targets at 1.4960 yet with possibility of a slight downside correction to 1.4755 before rebounding back to the upside. The incline remains as far as 1.4665 is intact.

The trading range for today is among the key support at 1.4470 and the key resistance at 1.5135

The general trend is to the upside as far as 1.4135 remains intact with targets at 1.6000

Support: 1.4755, 1.4665, 1.4630, 1.4565, 1.4515
Resistance: 1.4875, 1.4900, 1.4965, 1.5000, 1.5075

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.4755 to 1.4875 and stop loss below 1.4665 might be appropriate.

GBP

The Cable was able to breach the 1.6355 resistance level and maintain trading above it gradually nearing the next resistance at 1.6425. The intraday and short term trends are to the upside where we expect the pair to face some difficulties due to the different resistance levels between 1.6410 and 1.6425 alongside the overbought signals on the stochastic indicator which may result in a downside correction to 1.6355 before rebounding back to the upside today targeting 1.6500 and 1.6635 respectively. The uptrend remains as far as 1.6180 is intact.

The trading range for today is among the key support at 1.6000 and the key resistance at 1.6740

The general trend is to the upside as far as 1.4840 remains intact with targets at 1.7100

Support: 1.6355, 1.6275, 1.6240, 1.6175, 1.6155
Resistance: 1.6410, 1.6500, 1.6595, 1.6635, 1.6660

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.6355 to 1.6500 and stop loss below 1.6275 might be appropriate

JPY

The USD/JPY pair is attempting to breach the support level pointed out yesterday which has shifted to 90.70 as it may result in a decline today if the pair manages to close below the level on the four hour charts. The stochastic indicator is providing bullish signs which may delay the breach yet a successful breakout will open the way towards 88.70 and 88.20 as far as 91.75 remains intact.

The trading range for today is among the key support at 88.20 and the key resistance at 94.70

The general trend is to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60

Support: 90.70, 90.15, 89.35, 88.70, 88.20
Resistance: 91.25, 91.50, 91.75, 92.10, 92.55

Recommendation: Based on the charts and explanations above, our opinion is selling the pair with the breach of 90.70 to 89.70 and stop loss above 91.50 might be appropriate.

CHF

The Dollar versus Swissy pair is trading around the key support for the minor downside channel at 1.0225 in an attempt to breach it yet the positive pressure seen on momentum indicators is delaying the decline. The breach will be confirmed with a four hour closing below the mentioned level to open the way towards 1.0000 where we expect the pair is to decline on the intraday basis as far as 1.0345 is intact.

The trading range for today is among the key support at 1.000 and the key resistance at 1.0550

The general trend is to the downside as far as 1.1225 remains intact with targets at 0.9600

Support: 1.0205, 1.0135, 1.0080, 1.0000, 0.9935
Resistance: 1.0225, 1.0285, 1.0345, 1.0385, 1.0425

Recommendation: Based on the charts and explanations above, our opinion is selling the pair from 1.0225 to 1.0135 and stop loss above 1.0285 might be appropriate.

CAD

Trading maintained levels below the previously breached key support at 1.0715 yesterday where we see a support level at 1.0655 representing the neckline of a bearish technical pattern as seen in the above image. From here we expect the pair to decline on the intraday basis today confirmed with a four hour closing below the neckline with technical targets for the pattern at 1.0465. The stochastic indicator is showing the pair being oversold which may result in volatile trading around the neckline yet the short term trend remains to the downside as far as 1.0820 is intact.

The trading range for today is among the key support at 1.0425 and the key resistance at 1.0900

The general trend is to the downside as far as 1.1870 remains intact with targets at 1.0300

Support: 1.0655, 1.0625, 1.0565, 1.0500, 1.0420
Resistance: 1.0715, 1.0750, 1.0795, 1.0845, 1.0885

Recommendation: Based on the charts and explanations above, our opinion is selling the pair with the breach of 1.0655 to 1.0500 and stop loss above 1.0750 might be appropriate.

Ecpulse

Weekly Technical Commentary

USD/JPY

Chart Levels:

Support 91.00..90.12..88.00..87.10.
Resistance 92.30..93.00..93.55..94.65

This week: →
This month: ↘

Bouncing from 78.6% Fibonacci retracement support, quickly correcting the oversold situation. Hopefully the rally will run out of steam here, first resistance around 92.00. However, holiday-thin conditions this week mean we cannot rule out a fairly large 'extension' higher. Worryingly, at-the-money implied volatility has not increased, holding around the average since April at 14.00%, this despite the US dollar trading close to the lowest levels against the Yen in post-war history. Some time over the coming month we continue to favour a series of cautious downside tests of key support between 87.00 and 1995's 85.00 (below which it spiked to a low 79.75 over a three month period).

EUR/USD

Chart Levels:

Support 1.4600..1.4500..1.4400..1.4290.
Resistance 1.4700..1.4768..1.4815..1.4900.

This week: →
This month: ↗

A weekly close above Fibonacci retracement of 61.8% of last year's losses should add a little more bullish momentum. On the ECB's Effective Exchange Rate it has retreated slightly from an all-time high and looks set to consolidate at current levels. One-month at-the-money implied volatility is still trying to base against the 10.00% level, and should eventually pick up towards 16.00% over the coming month or two. December 2008's high was 1.4720, last week's 1.4768 and November 2007's 1.4700 so a weekly close clearly above these is the next step in the series of generalised US dollar weakness. With G20 leaders busy blaming bankers they have yet to wake to the implications of recent currency moves.

GBP/USD

Chart Levels:

Support 1.6100..1.6000..1.5800..1.5700.
Resistance 1.6400..1.6600..1.6745..1.7045.

This week: →
This month: ↗

Dreary, messy and increasingly top-heavy as the pound lost ground against all major currencies last week. While below the flat top of a massive weekly Ichimoku 'cloud' we shall have to allow for a lot more consolidation inside it. While trendline support has limited declines for many weeks, the formation since June looks increasingly like an irregular 'head-and-shoulders' top. Therefore there is a strong chance first support will yield in thin markets this week setting off a sudden sharp drop to the 1.5575 area, and no lower than 1.5275. The drop should end suddenly, probably with a 'spike low'. One-month at-the-money implied volatility should hold above 10.65% for quite some time to come.

EUR/GBP

Chart Levels:

Support 0.8900..0.8750..0.8635..0.8400.
Resistance 0.9085..0.9130..0.9340..0.9500.

This week: →
This month: →

Losing over three pence last week courtesy of bankers' comments. Bursting above the top of a good-sized Ichimoku weekly 'cloud' and moving averages in the biggest weekly rally since March 2009. Not what we had expected, forcing us to review Sterling generally. There is a small chance that the top of the downward-sloping 'channel' will now limit this most recent rally. More worryingly the whole of the formation since October 2008 might be seen as a huge 'flag' –which is usually a continuation pattern. The implications are too awful to contemplate as a conservative measured target would be 1.0300 and a squeeze to 1.1000 a possibility. The authorities had better be very careful indeed for what they wish for.

EUR/JPY

Chart Levels:

Support 132.00..131.00..129.00..128.00.
Resistance 135.25..136.00..137.40..138.75

This week: →
This month: ↘

Yen crosses did not see the downside follow-through we had predicted for last week and instead bounced fairly strongly from recent lows. Hopefully the rallies will fizzle out imminently and late this month and in October we will resume the cautious downside testing we still favour, with the 128.00 area pivotal. Surprisingly one-month at-the-money implied volatility has dropped to 12.75% (considerably lower than September 2008) suggesting option sellers are at their most aggressive in a while. The low for volatility was 9.00% in August 2008 and 5.00% in November 2006. Note that longer term prices are expected to trade broadly sideways for another six months, picking interim highs and lows a thankless task.

GBP/JPY

Chart Levels:

Support 148.00..146.70..143.00..139.00.
Resistance 151.75..153.25..156.00..157.50.

This week: →
This month: ↘

Dropping a little lower, unlike most Yen crosses, as the UK authorities giving sterling a pounding. Though weekly moving averages have been suggesting a long position since May, we view price action since June as a 'double top' which will be completed by a weekly close below July's low at 146.70. A break below the bottom of the very large Ichimoku 'cloud' (144.65) would add bearish momentum leading to a drop to our measured target at 130.00. Below 129.00 on a first attempt is considered highly unlikely, though note that moves below here are expected to be complex and very sharp. One-month at-the-money implied volatility is at its lowest in just over a year (14.25%), suggesting aggressive selling by market makers.

Mizuho Corporate Bank

ENERGY MARKET RECAP

October Crude Oil closed up 1.84 at 71.55. This was 1.94 up from the low and 0.30 off the high.

October Heating Oil closed up 5.88 at 181.05. This was 5.57 up from the low and 0.88 off the high.

October RBOB Gasoline finished up 3.36 at 178.50, 1.45 off the high and 3.35 up from the low.

October Natural Gas finished up 0.08 at 3.66, 0.07 off the high and 0.15 up from the low.

Technical Outlook
CRUDE OIL (OCT) 09/23/2009: The cross over and close above the 40-day moving average is an indication the longer-term trend has turned positive. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The intermediate trend could be turning up with the close back above the 18-day moving average. A positive setup occurred with the close over the 1st swing resistance. The near-term upside target is at 73.38. The next area of resistance is around 72.67 and 73.38, while 1st support hits today at 70.43 and below there at 68.90.

RBOB GAS (OCT) 09/23/2009: Momentum studies are trending higher from mid-range,
which should support a move higher if resistance levels are penetrated. The close below the 9-day moving average is a negative short-term indicator for trend. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 182.82. The next area of resistance is around 180.90 and 182.82, while 1st support hits today at 176.10 and below there at 173.23.

HEATING OIL (OCT) 09/23/2009: Momentum studies are rising from mid-range, which
could accelerate a move higher if resistance levels are penetrated. The market now above the 18-day moving average suggests the intermediate-term trend has turned up. With the close over the 1st swing resistance number, the market is in a moderately positive position. The next upside target is 186.31. The next area of resistance is around 184.24 and 186.31, while 1st support hits today at 177.80 and below there at 173.42.

PRECIOUS METALS RECAP

December Gold closed up 10.6 at 1015.5. This was 1 up from the low and 6 off the high.

December Silver finished up 0.235 at 17.115, 0.21 off the high and 0.015 up from the low.

Technical Outlook
COMEX SILVER (DEC) 09/23/2009: Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is enetrated. 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 downside target is 1660.9. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1741.7 and 1763.8, while 1st support hits today at 1690.3 and below there at 1660.9.

COMEX GOLD (DEC) 09/23/2009: Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. 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 downside objective is now at 997.4. The next area of resistance is around 1025.0 and 1031.9, while 1st support hits today at 1007.8 and below there at 997.4.

CURRENCY MARKET RECAP

December US Dollar closed down 0.695 at 76.305. This was 0.085 up from the low and 0.650 off the high.

December Euro closed up 1.19 at 147.96. This was 1.21 up from the low and 0.26 off the high.

December Japanese Yen finished up 1.19 at 109.79, 0.25 off the high and 1.12 up from the low.

December Swiss finished up 0.85 at 97.76, 0.2 off the high and 0.85 up from the low.

December Canadian Dollar finished up 0.75 at 93.52, 0.31 off the high and 0.83 up from the low.

December British Pound closed up 1.65 at 163.57. This was 1.54 up from the low and 0.38 off the high.

Technical Outlook
JAPANESE YEN (DEC) 09/23/2009: 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. A positive setup occurred with the close over the 1st swing resistance. The next downside objective is 108.20. The next area of resistance is around 110.46 and 110.93, while 1st support hits today at 109.10 and below there at 108.20.

EURO (DEC) 09/23/2009: The daily stochastics gave a bullish indicator with a crossover up. Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close above the 9-day moving average. The market's close above the 2nd swing resistance number is a bullish indication. The next upside target is 149.20. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 148.71 and 149.20, while 1st support hits today at 147.25 and below there at 146.27.

STOCK INDICES RECAP

December S&P closed up 7 at 1067.4. This was 5.9 up from the low and 1.8 off the high. December S&P E-Mini finished up 7 at 1067.5, 1.75 off the high and 8 up from the low.

December Dow finished up 55 at 9773, 7 off the high and 58 up from the low.

Technical Outlook
S&P 500 (DEC) 09/23/2009: Rising stochastics at overbought levels warrant some caution for bulls. 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 near-term upside target is at 1075.62. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 1072.34 and 1075.62, while 1st support hits today at 1062.65 and below there at 1056.23.

S&P E-MINI (DEC) 09/23/2009: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. Market positioning is positive with the close over the 1st swing resistance. The near-term upside objective is at 1075.68. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1072.37 and 1075.68, while 1st support hits today at 1062.63 and below there at 1056.19.

NASDAQ (DEC) 09/23/2009: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. 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 near-term upside target is at 1748.50. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1742.00 and 1748.50, while 1st support hits today at 1727.00 and below there at 1718.50.

DOW (DEC) 09/23/2009: A new contract high was made on the rally. Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. Market positioning is positive with the close over the 1st swing resistance. The next upside objective is 9839. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 9804 and 9839, while 1st support hits today at 9722 and below there at 9674.

BOND MARKET RECAP

December Bonds finished up 0-040 at 119-050, 0-080 off the high and 0-180 up from the low.

December 10 Yr Treasury Notes closed up 0-070 at 117-010. This was 0-130 up from the low and 0-055 off the high.

Technical Outlook
BONDS (DEC) 09/23/2009: The moving average crossover up (9 above 18) indicates a possible developing short-term uptrend. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The upside closing price reversal on the daily chart is somewhat bullish. The close over the pivot swing is a somewhat positive setup. The next downside objective is 118-120. The next area of resistance is around 119-230 and 119-310, while 1st support hits today at 118-300 and below there at 118-120.

10 YR TREASURY NOTES (DEC) 09/23/2009: Momentum studies trending lower at id-range should accelerate a move lower if support levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. The daily closing price reversal up is a positive indicator that could support higher prices. The close over the pivot swing is a somewhat positive setup. The next downside target is 116-130. The next area of resistance is around 117-130 and 117-195, while 1st support hits today at 116-260 and below there at 116-130.