Forex Trading

Markets activity has quieted down into the final few hours of trading in the Forex. We will have a weekend report for you tomorrow with a preview of next weeks opportunities.

Today also the final day for the 8% funding bonus at FXDD. You can all of the details at www.fxdd.com if you are looking to open an account today. Greg Michalowski will return on Monday.

The GBP/USD has been in an upward trend for much of the past two days. Looking at the 5 min chart, we can see that the pair has worked its way higher inside of a channel. The bottom side of the channel has been supported with 3 tests. The pair broke above the channel this afternoon and then failed to break above resistance at 1.5215. This will be the key level traders will be watching. Above this, there is good room for a short term trader on the way to major resistance at the 50% retracement level from the daily chart at 1.5272.

The USD/JPY hit hard resistance at 91.07 and fell quickly back to trendline support at 90.96. The pair has held the 100 Hour moving average for over a week with only one break below, early in today’s session. The pair has climbed almost 300 pips since March 4th. Support will be found at the 100 Hour MA at 90.30 and then down at the 200 Hour MA (89.74) On the top side if the pair can break 01.07, resistance will be found at 91.87 which is the 200 Day MA on the daily chart.

The AUD/USD appears to be having challenges breaking above the 0.9193 as a double top forms. The pair has been in a bullish trend since late February, 2010. The pair has only been below the 200 Hour moving average once in that entire time so the bias remains bullish for the time being, however, the pair may move to test the 100 Hour moving average in the near term (blue line 0.9134). Below that the 200 Hour MA (green line) comes into focus at 0.9087.

Key resistance levels on the top side are seen at 0.9250, 0.9326 and then at the 2009 high of 0.9405.

The EUR/USD moveed higher after breaking above the trendline near 1.3680, and climbed into major resistance at 1.3799. This is the 50% retracement level from the move seen on the daily chart. The pair is likely to have challenges with getting above this key level.

Good Morning:

The USD lost ground overnight as speculation that the Fed will keep interest rates low reduced demand for USD dominated assets.  In other news, Janet Yellen will most probably be selected as vice chairman of the Fed.  Ms Yellen is currently President of the San Francisco Fed, and has been a staunch supporter of lower interest rates to combat the global recession.

Overnight and into the start of the US session, the GBP/USD has broken the top side of the pennant formation (1.5050.) The pair is now holding above the 100 Hour & 200 Hour MA’s, against the the 38.2% retracement level near 1.5176. The Fibonacci is calculated from the high on Feb 17th, 2010 (1.5814) to the low on March 1, 2010 (1.4782.)

Gbp/Usd broke above the 61.8 Fibo (1.5070) earlier in the session and thus far has not looked back. The pair found some resistance at the 1.5165-70 level which is an historical level of hourly highs. This is just in front of March 8th high of 1.5194. A break above this level should bring the pair up to 1.5230-35. If the pair reverses course 1.5115-20 should show some support.

The following comments from the BOJ against the Yen have helped push the USD/JPY pair higher even as the USD remains under some pressure. In addition to comments from Morgan Stanley earlier that ‘Japan is increasingly likely to sell Yen and that Yen could weaken to 109 per dollar at year-end.’

The EUR/USD is again has tested the descending trendline resistance we examined yesterday on the 4-hr chart, with the 4-200hr moving average directly above that line and the 1.37 handle.  The trendline had held yesterday and the pair is continuing to test it early in the Asian session. The signals on this chart might suggest a break through as the moves lower from the last few hits have been less significant than the ones before.

However on the daily chart we this is the 10 daily attempt at the trendline with some bearish signals as the 100 day moving average is about to move below the 200 day mavg.