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Short-Term Currency Outlook: December 10, 2012

Published 12/09/2012, 11:57 PM
Updated 05/14/2017, 06:45 AM
EUR/USD
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GBP/USD
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USD/JPY
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EUR/USD
EURUSD
EUR/USD:

1.2926

Short-Term Trend: Weak uptrend.

Outlook: EUR was stronger for most of last week but then declined sharply on Tuesday and Friday. Overall, the outlook remains unchanged from the last week. The sideways consolidation from the September top is believed to be a pause with the uptrend form the July 2012 low. And if that's the case, very soon we should see a rally above the 1.3195 level. Such a move higher will confirm the presented bullish view and will suggest gains toward 1.3520 and 1.3720.

On the downside, the key support is at 1.2670 - break below there will negate the afore-said bullish view....

Strategy: Longs favored at 1.2870. Stop=1.2670. Target=1.35000

GBP/USD
<span class=GBP/USD" title="GBP/USD" width="713" height="522">
GBP/USD: 1.6037

Short-Term Trend: Sideways

Outlook: No change here. GBP/USD continues to trade with a very narrow range which is untypical for this market. But this market has been stuck in a trading range for more than a year now. Short-Term, I continue to expect a move toward 1.6300 followed by a strong move lower. I see no trading opportunities now on this time frame, but our analysis shows that the recent prolong trading range will soon give way to a powerful move (our expectations are for a sharp decline in 2013).

Strategy: Stand aside

USD/JPY
<span class=USD/JPY " title="USD/JPY " width="713" height="522">
USD/JPY: 82.47

Short-Term Trend: Uptrend

Outlook: USD/JPY is practially unchanged from a week ago. This market has spent almost two weeks now in small sideways consolidation between 81.70 and 82.80. And the question is which way this consolidation is going to break out. Based on current strong uptrend on the daily chart and wave count presented above, I expect to see an upside breakout. A solid move above 82.80 will confirm this view and should lead to a test on the key 83.80/84.14 area.

On the downside, a decline below 81.70 will be negative and will suggest weakness toward 80.60 key support level...

Strategy: Holding long from 81.30 is favored. Stop=81.60.

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