Forex Technical Update 8-17-2007

[B]London Commentary:[/B] After making a spike double bottom at 1.3367 the EURUSD appears to have stabilized and now look sto be making a retrace rally. The pair however faces a series of resistance points in its climb higher needing to clear 1.3577, 1.3621, 1.3659 and 1.3701 in order to restablish a bulish bias
[B]New York Update:[/B] Breaking through topside resistance at the 1.3437 ceiling noted yesterday, the EURUSD has briefly touched upon the 1.3538 38.2% fib from the 1.3825-1.3359 corrective bear wave. Consolidating just above the 1.3474 Aug 15th hourly low, a slight retracement can be expected at the current time, with momentum indicators confirming the idea. Initial targets are set for 1.3445 support.
[B]Strategy:[/B] A retrace rally is in the making but beware of resistance overhead

[B]London Commentary:[/B] USDJPY is grossly oversold having stretched itself more than 500 points from the 200 period SMA but massive volatiliy in the pair creates very wide ranging bars. Still the near term bias appears to the upside as price may want to retrace bacl to the moving average before retetsting the lows
[B]New York Update:[/B] USDJPY bidding is having a difficult time cracking the 114.68 38.2% fib from the recent 119.82-111.57 bear move. Should the pair take out current resistance, it would open up scope for targets at the 115.50 psychological resistance level. However, given the trading pattern into the level, we would not be surprised on an initial pullback to 113.50 round figure support before a move higher.
[B]Strategy:[/B] Long but cautious of massive volatility

[B]London Commentary:[/B] Pound has made on of the more unique chart patterns carving out a spike bottom on the hourly time frame. The power of the reversal move has pushed the pair thropugh the initial resitance level of 1.9863 but it still faces multiple tests in its climb to higher ground.
[B]New York Update:[/B] Pound sterling also seems to be having a difficult time cracking the fib resistance at 1.9935 in the NY session. As such, the GBPUSD pair is conforming to the 2.0257-1.9898 declining channel trendline in the short term, with momentum indications coinciding with stiff resistance just below the 1.9850 round figure resistance. This leads us to believe a move lower is favored heading into the close before any attempts are made to the upside in the near term.
[B]Strategy:[/B] Move to flat (previously bearish), looking for a retrace to 1.9958 to get bearish again

[B]London Commentary:[/B] USDCHF presents one of the more inetersting patterns today having found support at the 200 SMA level making a higher low which suggest that the bullish bias persists in the pair. However 1.2200 remains a key objective to overcome if the pair is to sustain any upside momentum
[B]New York Update:[/B] The corrective decline is underway, as per our assessment yesterday. Buying momentum was absent in the overnight session, keeping the price action under the stated resistance at 1.2179 and lending to the imminent downside break of the pair. Seemingly bottoming out at the 1.2050 figure, the key test now resides in the 1.2076 38.2% fib from the 1.2214-1.1939 bear wave. A subsequent break higher above the level would put 1.2103 50% fib in play.
[B]Strategy:[/B] Longs but mindful of the 1.1950 support level

[B]London Commentary:[/B] The USDCAD has staged a massive reversal breaking multiple supports along the way. The price asuggests further downside action to come as bears clearly have taken control of the pair. Only a shapr retrace above the 1.0750 level invalidates the down move anf for now the target could move well within the 1.0500 range
[B]New York Update:[/B] The pair failed to break above the previously mentioned 1.0800 psychological resistance, coming in as close as 1.0796 before falling back to the 1.0550 support. Incidentally, with the session high intact, the bearish momentum accelerated on a failure to hold 1.0750. As a result, the pullback presents great opportunities to fall in line with previous bullish forecasts, with sights set on the 1.1000.
[B]Strategy:[/B] Flat

[B]London Commentary:[/B] Kiwi imuch like the Aussie has staged a rally off the lows. However the price action in the kiwi looks to be more constructive as the pair appears to have made a bottom at 6639 and now looks to 6900 an dthen further 7000 as next levels of resistance.

[B]New York Update:[/B] A similar situation is arising in the NZDUSD as the pair remains under pressure by the 0.6962 38.2% fib from 0.7482-0.6641 bear wave. Momentum osciallators are confirming the notion as downside looks highly favored in the pair. As a result, initial targets are set for 0.6815 August 17th hourly low.
[B]Strategy:[/B] Flat