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Clarence shares his views on the majors with all TNT and non TNT students,

US Dollar Index

The major trend of the US Dollar Index is still down. On Monday, the index went to a high of 78.17 before settling at 77.96, which is up by 0.59 compared to last Friday. The low of the week is 77.08. Immediate resistance to the Index is 79.29 (13-Week Moving Average Line), followed by 80.00.

Currently the RSI is pointing upward at 33.86%, indicating that the index is gaining its upward momentum to undergo its major “upward” retracement, resulting a strengthening US Dollar. There is still room for the RSI to go up to the 43% level.

General Market Commentary (October 22, 2007) by MG Financial Group:

The Dollar dropped initially against the Yen and the Euro after the G7 statement released late last Friday. The Dollar tumbled to a fresh low at 1.4348 against the Euro.

There was no change in the language regarding the currencies. The G7 just repeated that excess volatility in foreign exchange is undesirable. Apart from urging China to allow its currency appreciate more rapidly, G7 finance ministers and central bankers did not mention any other currencies including the weak Yen and Dollar and the strong Euro.

Besides, the G7 indicated that record oil prices and US housing and credit sector slump will impede economic growth. This prompted investors to cut back risk appetite and reduce carry trades. The Yen rallied sharply against high yielding currencies. The Yen rallied to session low at 113.26 against the Dollar, and strengthened to 230.35 versus the Sterling and 160.48 versus the Euro.

With no key data releasing till Wednesday, the foreign exchange market will continue to focus on carry trades and equity market.

EUR/USD

From the weekly chart, the pair is on a major “upward” move, as indicated by the Long MACD and the Moving Average Lines. This week’s price candle appears bearish and almost wipes away all of last week’s gain, indicating that the pair is making another strong attempt to undergo its major “downward” retracement. Immediate support is 1.4084, with next support at 1.4022 which is the upper band of the upward channel. Immediate weekly resistance is at 1.4343, which is the pair’s historically high. Weekly Stochastic is seen crossing downward at the 82% level, indicating that the pair’s upside is still limited.

From the daily chart, Monday’s price candle indicates a drop of more than 150 pips, signaling a possible attempt for the pair to undergo its major downward” retracement. Its immediate daily resistance is at 1.4343, while daily support is at 1.4154, followed by 1.4065 and 1.4000. The Default MACD is showing a down-trend while the two pairs of Moving Average Lines are still indicating an up-trend. Daily Stochastic is seen crossing downward at the 71% level, indicating a possible downward move over the next few trading days. We are expecting the pair to undergo a major “downward” retracement, as its upside is limited.

From the hourly chart, the pair is seen supported at 1.4120, with immediate intra-day resistance at 1.4187.

We are bearish towards the pair, as the pair’s upside is limited. If the pair continues to undergo its major “downward” retracement, we look forward to sell on rebound.

GBP/USD

From the weekly chart, the pair is on a major “upward” move, as indicated by the Long MACD and the Moving Average Lines. On Monday the price candle appears bearish as it wipes away all the gains of the previous week. Its immediate weekly resistance is at 2.0398. Its immediate weekly support is at 2.0273 (13-Week Moving Average Line), followed by 2.0140. Weekly Stochastic is seen crossing downward at the 79% level, indicating a limited upside.

From the daily chart, Monday’s price candle appears bearish, indicating a drop of more than 250 pips, signaling a possible attempt for the pair to undergo its major “downward” retracement. Its immediate daily resistance is at 2.0360, followed by 2.0401 (10-Day Moving Average Line) 2.0480, while its immediate daily support is at 2.0312 (40-Day Moving Average Line), followed by 2.0200 and  2.0155 (Daily 23.6% Fibo Level).The pair’s short-term moving average lines (10 and 40-Day) are still indicating an uptrend. Daily Stochastic is seen crossing downward at the 69 level, indicating that the pair is making another attempt to undergo its major “downward” retracement. We are still expecting the pair to make another attempt to undergo major downward retracement as its upside is limited.

From the hourly chart, the pair reached the low of  2.0255 and then rebounded above the Intra-day 23.6% level.

We are still bearish towards the pair. If the pair continues to undergo its major “downward” retracement, we will go short on the pair when it rebounds.

USD/CHF

From the weekly chart, the pair is on a major “downward” move, as indicated by the Long MACD and the Moving Average Lines. This week’s candle appears bullish and rose by more than 150 pips. Its immediate weekly resistance is at 1.1848, followed by 1.1904 and 1.1985, while its immediate weekly support is at 1.1772 (Weekly 23.6% Fibo Level), followed by 1.1642. Weekly Stochastic is still pointing upward at the 41% level, indicating a possible major “upward” retracement is on the way.

From the daily chart, Monday’s bull candle is indicating another attempt for the pair to undergo a major “upward” retracement. Immediate daily resistance is at 1.1809 (40-Day Moving Average Line), followed by 1.1824, while its immediate daily support is at 1.1744 (10-Day Moving Average Line), followed by 1.1607. The default MACD is showing a downtrend while the short-term moving average lines (10-Day and 40-Day Moving Average Lines) are still indicating that the pair is on its major “down” trend. The Daily Stochastic is seen moving upward at the 26% level, indicating the pair is undergoing a possible major “upward” retracement.

From the hourly chart, the pair reached its Intra-day 23.6% Fibo Level at 1.1776. A break above 1.1800 will indicate a continuation of its uptrend.

The pair is undergoing its major “upward” retracement and we are watching to go long on the pair on pull-backs.

USD/JPY

From the weekly chart, this week the candle appears to be bullish, showing a rise of more than 100 pips. This may be its another attempt to crawl back to its upward channel. Both the Long MACD and the Moving Average Lines are still indicating a down-trend. Its immediate weekly resistance is at 115.21, followed by 115.61 (Weekly 38.2% Fibo Level) and 116.41.Its immediate weekly support is at 114.15, followed by 113.00 (Weekly 50% Fibo Level) and 112.58. Weekly Stochastic is seen crossing downward at 50% level, indicating a possible beginning of a major downward move in the next few trading days.

From the daily chart, the pair met a support at 113.65 and rebounded, which may be a secondary “upward” retracement. The pair is seen moving towards its immediate daily resistance at 114.85 (Daily 61.8% Fibo Level), followed by 115.18. Its short-term (10-Day and 40-Day) moving average lines have crossed downward again indicating a downward move. Default MACD is also indicating a downtrend. Daily Stochastic is seen crossing upward at 12% level, indicating a possible rebound this week before resuming its downward move.

From the hourly chart, the pair is seen moving upward towards the 114.67 intra-day resistance.

The pair looks like undergoing a possible secondary “upward” retracement. We  may go long  for small profits, otherwise wait for it to resume its major “downward” retracement and go short on it.

EUR/JPY

On the weekly chart, this week’s candle appears bearish, showing a drop of more than 200 pips before recovering with a rebound above the lower band of its upward channel. Its immediate weekly support is at 161.53 (the lower band of the upward channel), followed by 160.00 and 158.93 (52-Week Moving Average Line). Its immediate weekly resistance is at 163.63, followed by 168.08 (upper band of the upward channel). Weekly Stochastic is seen moving downward at 67% level. The pair maybe undergoing a possible major “downward” retracement.

On the daily chart, the pair met strong support below 162.07 (Daily 38.2% Fibo Level). Its immediate daily resistance is at 163.31 (40-Days Moving Average Line). Default MACD is indicating a downtrend. Daily Stochastic is seen crosiing upward at the 16% level, indicating a possible rebound this week before resuming its downward move.

On the hourly chart, the pair is seen supported at 161.35, with next intra-day support at 160.63.

The pair may undergo a secondary “upward” retracement this week. We are watching to buy on pull-back for small profits.
TNT students, please use the updated TNT charting templates that was sent to you on October 20. Any resistance or support levels not found in the charts, please manually update them yourself as we will be sending you the next updated charting templates this coming Sunday.
The above analysis can also be used by our non-TNT students as a guide to their own trading. We welcome feedback from our non-TNT students regarding the effectiveness of this Daily TNT Market Analysis for your trading.

Have a great trading day ahead!

Cheers,

Clarence

Admin of The Forex Club

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