EUR/USD" title="EUR/USD" width="631" height="365">EUR/USD:
1.3067
Short-Term Trend: Weak uptrend
Outlook: EUR failed last week at 1.3300 resistance and declined sharply. While there is still a pattern of higher highs and higher lows from the Nov 2012 low, the techinical picture has deteorated significantly. The current uptrend is considered weak and as the daily oscillators point down, lower prices are expected in the next week or two.
That leads me to believe that wave B on the chart above is still unfinished, unfortunately the wave structure of wave B is unclear a this point. Ideally the market will find support either at 1.2870 level or at 1.2670 level and will turn back up again. If the technical picture improves again, I may favor another long position later this month.
Strategy: The hypothetical long from 1.3150 was stopped out at 1.3150. Stand aside.
GBP/USD
GBP/USD" title="GBP/USD" width="631" height="365">
GBP/USD: 1.6067
Short-Term Trend: Sideways
Outlook: GBP was extremely volatile last week. It first rose to 1.6339 but then declined sharply. Thus, the bearish idea has been actually re-inforced. Now, we need a move below 1.5820 by the mid February to confirm a major trend reversal. That's plenty of time and if the market has indeed reversed, it will not be difficult to meet this requirement. If that happens, I will expect weakness toward the key 1.5260 level eventually. On the upside, the key resistance remains in the 1.6300/1.6380 zone...
Strategy: Holding short from 1.6170 is favored. Stop=1.6350.
USD/JPY
USD/JPY" title="USD/JPY" width="631" height="365">
USD/JPY: 88.14
Short-Term Trend: Uptrend
Outlook: USD/JPY is moving higher even faster than expected. As you know I turned bullish on weekly chart back in March of 2012. Then on daily chart I turned bullish when the pair moved above 79.65 level. And I expected this market to really start moving up after it broke above the key 83.80 resistance level. And sure it did.
Now, the daily uptrend is very strong but the market is also heavily overbought. While in strong uptrend overbought conditions do not matter a lot, so we can continue to favor the long side. But my guess is that if the prices return below 86.70 level, a short-term correction will start. So, it makes sense to protect the longs with a stop at 86.70 level....
Strategy: Holding long from 81.30 is favored. Stop=86.70