I decided on Thursday of last week, that I only trade 3 pairs a day (unless necessary of course) and those pairs are: GBP/USD EUR/USD USD/JPY
Here's what happened with them yesterday thanks to my friends at DailyFX.com
EUR/USD - EUR/USD fell yesterday after gaining for the past 6 days and 11 of the last 13. The pair did trade to 1.2688 but ended up closing below the 50% fibo of 1.3666-1.1640 at 1.2652. This fibo resistance combined with yesterday’s long upper wick on the daily candle at the upper Bollinger band (daily) looks to have established a short term top. Support stems from the 23.6% fibo of 1.2068-1.2688 at 1.2543. A break below targets the confluence of the 10 day SMA / 38.2% fibo at 1.2452/60. Meanwhile, long term bullish signals continue to accumulate as the 100 day SMA now sits just above the 200 day SMA. This is the first 100, 200 day positive cross since 10/27/2004. Resistance remains the 50% fibo of the 1.3666-1.1640 bear wave at 1.2652 followed by yesterday’s high at 1.2688.
GBP/USD – Cable looks very similar to EUR/USD in that both formed bearish daily candles and both closed below their respective 50% fibos of the mostly 2005 dollar rally (GBP/USD was 1.9540-1.7046). Ultimately, it was the 6/8/2005 high at 1.8401 that held up as resistance. Negative divergence is still obvious with oscillators on the dealer chart. This combined with the fibo resistance at 1.8294 hints at a corrective move. Support is at the 5/1 low of 1.8203 with a break below exposing the 23.6% fibo of 1.7249-1.8413 at 1.8139. A break above yesterday’s 1.8413 high could facilitate a move to the 9/5/05 high of 1.8501.
USD/JPY – USD/JPY also looks poised for a contra move. After trading below support posed by the 50% fibo of 104.18-121.38 at 112.75, the pair formed a hammer on the daily and closed above the mentioned support. RSI on the daily is sloping up and just below the oversold barrier of 30, favoring yesterday’s low as a short term bottom. Yesterday’s comment that “Positive divergence on the dealer charts along with the pair hugging the lower Bollinger band on the daily leaves possibility for a contra move” did indeed proved accurate. Resistance comes in at the 4/24 low of 114.23 with additional strength targeting the 38.2% fibo of 118.82-112.32 at 114.80. The 50% fibo of the rally from 104.18 to 121.38 at 112.75 remains initial support with yesterday’s low at 112.33 as additional support.
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