Morning technical analysis – 13 February 2014 | Alpari Newsroom …
Morning technical analysis – 13 February 2014
February 13, 2014
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EURUSD
In Tuesday’s morning’s technical analysis, I mentioned that despite the pair looking a little more bullish, we needed to see a close above the previous high, of 1.3739, before I become bullish. Not only have we not seen that, the pair bounced quite aggressively off the 50 fib level, 27 December highs to 3 February lows, on Tuesday to close below the 50-day SMA, quite a bearish move. That’s not to say that this bullish push is over, but with a lower high now being made, around such a key resistance level, things are looking much more bearish again. Adding to the bearishness here is the evening star formation that was completed yesterday. The pair is edging higher today but as long as it doesn’t close above yesterday’s open, 1.3637, this will just be viewed as a correction. Even more bearish would be a failure to close above the mid-point of the body of yesterday’s candle, around 1.3615. As it stands, the pair appears to have run into resistance already around 1.3636, the 61.8% retracement of the move from Tuesday’s high to yesterday’s low. It could well be down hill from here. It also looks like we have a head and shoulders in the making on the 4-hour chart, with the neckline around 1.3580. A break of this would give a conservative target of 1.2525, previous support and resistance, and an aggressive target of 1.3475, in line with this month’s lows. Both of these are based on the size of the head and shoulders formation, with the conservative target being the size of the move from the shoulder to the neckline, repeated again, and the aggressive one being the size of the move from the head to the neckline, also repeated again.
GBPUSD
Sterling is looking much more bullish following yesterday’s aggressive push higher during BoE Governor Mark Carney’s press conference. The pair has continued the push this morning and if we can see it break through January’s highs of 1.6667, it would suggest that the rally is not over and the recent sell-off was just a minor blip in an otherwise strong uptrend. The pair has now broken back above both ascending trend lines that it fell below in recent week’s which adds a further bullish tone to it. It is worth noting that the rally in the last 24 hours, in particular, has been very aggressive so we should prepare for some kind of correction, or consolidation at the very least, before the pair continues its ascent.
USDJPY
We’re seeing a bit of a pull back in the pair this morning after it broke above yet another descending trend line, which dates back to 23 January, on Tuesday. The retracement may be quite shallow though with the pair currently finding strong support around 101.95, where the descending trend line that it recently broke above crosses the 38.2 fib level, 4 February lows to 11 February highs. Just below here we also have the 50-period SMA on the 4-hour chart which should provide additional support. Assuming the correction is over, the next target for the pair will be to make new higher highs, breaking above Tuesday’s high of 102.69, which would confirm the resumption of the uptrend on the daily chart, having made both higher highs and higher lows. This would also take it above the 20-day SMA, which has been quite a reliable level of support and resistance in the past, and would therefore be a bullish signal. Above here the next target would be 103.44, a previous level of resistance, where the 50-day SMA could prove to be a brief stumbling block.
Author: Craig Erlam
Tagged EUR/USD, Fibonacci, foreign exchange trading, forex, forex uk, FX, GBP/USD, Metatrader 4, Moving Averages, MT4, MT5, Technical analysis, USD/JPY
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Morning technical analysis – 13 February 2014 | Alpari Newsroom …
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