EUR/USD" title="EUR/USD" width="625" height="475">EUR/USD:
1.2957
Short-Term Trend: downtrend
Outlook:
Several weeks ago we favored a short position in the 1.34/1.35 area with a target at 1.2870. The 1.2870 target was reached in the last week of 2011, so we are now flat. The daily downtrend remains strong as so far there is no evidence of a major bottom. But we believe that a low will be found soon either near the 1.2870 level or near 1.2670 level. Then, a rally back twd 1.3520 will be expected but only to be followed by another decline. We captured a big move down, so from a trading perspective it is wise now to step aside for a week or two.
Strategy: The previous shorts from 1.34/1.35 hit our target at 1.2870. I am now flat.
GBP/USD:
GBP/USD" title="GBP/USD" width="625" height="458">
GBP/USD: 1.5511
Short-Term Trend: weak downtrend
Outlook:
The downmove has become quite choppy and the confidence in the presented wave count has diminished. Everything started off nicely last week as the pair moved exactly as we expected. We favored a short position in the 1.5620/30 area against 1.5780 level. The initial rally was capped at the 1.5680 Fibo level and GBP then declined sharply. However, in the last trading day of 2011 it rallied again and the downtrend weakened. Righ now, we still like the downside but only if the pair resumes its decline immediately. So, lowering the stop to 1.5600 makes sense now....
Strategy: Holding short from 1.5620/30 is favored against 1.5600. Target=1.5000.
USD/JPY:
USD/JPY:" title="USD/JPY:" width="625" height="435">
USD/JPY: 76.95
Short-Term Trend: downtrend
Outlook:
The sharp decline in the last trading day of 2011 signals the Short-Term and Medium-Term downtrend has resumed here. A decline below 76.60/50 will confirm and will likely bring the expected weakness twd 74.50/40 1st and then to 68.70 eventually.
On the upside, only a move abv 78.20 will negate this view and will risk one more rise twd 79.00 before down. With this in mind, lowering the stops to 78.20/30 makes sense to me.
Strategy: Holding short from 77.80 is favored. Stop=78.30. The downside target is near 69.00 eventually.