Currencies Daily Outlook: August 6, 2012

1.2368

Very Short-Term Trend: Uptrend

Outlook:
EUR has moved abv the 1.2345 Fibonacci level and that by itself is a positive sign. As long as the prices stay abv this level, the hourly chart looks bullish and gains twd 1.2440 and possibily higher are expected. But then we will most likely see another move lower to re-test the 1.2067 low.

From a trading perspective, the long side is favorable, but this is not the kind of moves that the confidence is high. So, I personally prefer to be neutral.

Strategy: Stand aside.

GBP/USD: 1.5599

Very Short-Term Trend: Sideways

Outlook:
The hourly trend remains sideways between roughly 1.55 and 1.5750. Right now we are in the middle of this range and the hourly oscillators are pointing lower. That means we can expect a move lower today but the downside is likely to be limited and another move higher will be expected either later today or tomorrow. Overall, the trading range is likely to persists for some time, but eventually I expect a move lower.

Strategy: Stand aside.

USD/JPY: 78.35

Very Short-Term Trend: Sideways

Outlook:
What do you think when you see a chart like this? - This is a clear sideways pattern: the prices have been in this tight range for more than 2 weeks now. On Friday there was a move higher (abv 78.50) but the prices then retreated and returned below that 78.50 again. So, the hourly chart remains sideways. And with this conditions I do not see anything compelling from a trading standpoint. It is only a waste of time to try to trade in such market. That of course, is my opinion only.

Strategy: Stand aside.

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