30 Day Technical Outlook(ACFX.COM)

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USDCHF

The monthly range based upon the most recent Average True Range readings is 635 pips. This implies that USDCHF could potentially trade between 0.8410 and 0.9680. Monthly support is 0.7064 and resistance 0.9595 and 1.1730.

USDCHF has been in a strong down trend since October 2000. Since August 2011 USDCHF has experienced a pullback into previous support of 0.9679. This support subsequently has now become strong resistance. The close for February 2012 was beneath the low for January which indicates a possible rotation and reversion back to the down trend. This coincides with the Stochastic approaching the overbought area combined with a stochastic hidden divergence.

The current technical view is short with targets at the lower envelope line and support of 0.7064.

The alternative scenario is a failure swing of the current move down and a break of resistance at 0.9679

All these scenarios are hypothetical and we are market neutral.

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GBPUSD

 

The monthly range based upon the most recent Average True Range readings is 608 pips. This implies that GBPUSD could potentially trade between 1.53117 and 1.65277. Monthly support is 1.5230 and resistance 1.6750.

The price action has been confined in a symmetrical triangle since January 2009. This price pattern which has now entered its fourth year should find resolution no later than January 2014, this being a potential price pattern of some 61 candles. If resolution of this pattern happens as suggested by classical technical analysis we then expect a projected pattern break out by candle 41. This places the break out occurring in May 2012.

The current technical view is long up to down trend line that forms the upper boundary of the symmetrical triangle. If a break of the upper boundary occurs, one could wait for a pull back to before deciding to participate in any market move. A failure to break the upper boundary may offer the opportunity to short GBPUSD down to the upward sloping trend line which forms the lower boundary of the price pattern.

The alternative scenario is a down break of price pattern. Once again it may be best to wait for a pull back before entering any trade. A failure to break the lower boundary may present alternative opportunity for a long entry.

All these scenarios are hypothetical and we are market neutral.

It should be noted that a break of this pattern could project GBPUSD either side of the vertical length of the current price pattern

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EURUSD

The monthly range based upon the most recent Average True Range readings is 700 pips. This implies that EURUSD could potentially trade between 1.24375 and 1.37375.

An attempt to touch the July 2001 trend line fell short by some 100 pips. Although the possibility for attempt to touch this trend line should not ruled out the January monthly candle is potentially bullish. The bullish pattern will be confirmed if the February candle can close higher than the January candle. Furthermore the oversold reading in the Stochastic Oscillator and price holding above the 78.6% Fibonacci level points to a potential bullish reversal into March.

The initial price target being 1.3600.However with the possibility of the bad Euro zone news diminishing or being discounted the potential for a major upside break is high.

The alternative scenario is a break of the upward sloping trend line followed by a break of support at 1.2600 and 1.2400 levels with a target of the lower envelope at 1.1950.

At the moment, due to considerable market news, we are market neutral with a small technical bias to the long side. However, our proprietary technical tools allow us to take much shorter term technical views and participation either side of the short term technical trend.

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