Technical Outlook 

EUR USD cleared new highs yesterday. As a result, the 1.2500/2600 area turns into a strong S for the pair. 1.30 is the only available R thanks to another Fibo confluence (38.2% Fibo from the 76 - 85 bear wave & 50% Fibo from the 79 - 85 bear wave). Intraday R at 2850/80 might inspire some reversal players thanks to the higher intraday BB, the hammer on the dailies and the overbought oscillators. Intermediate S is to be found at 1.2650/70 thanks this time to the lower intraday BB. Once again, the only serious S will be entire 2500/2600 zone. This might induce a pause in the Euro rally. USD JPY did not do anything all day and still sits on the key 105.60/106 area where the 150% Fib extension from the 01 - 02 bull wave and Lower Bollinger band are present. The area should generate some sort of rally if yesterday's doji is confirmed. 106.80, the 10 SMA and the triangle S now R should be the first R. Cable stopped its daily rally at 8279 slightly above the 8250 level (123.6% extension from the 98 - 01 bear wave). The 8250/8300 area is now intermediate R but the area to watch is 1.7850/7900 (23.6% Fibo from the 84 - 93 bull wave and upper BB). The area should now be a decent S for further upside. Higher, nothing much since no R seems serious before the 8650 area. USD CHF made new lows once again and fell short of our 2215 S. The daily doji on the lower BB ahead of the 23.6% Fibo from the 93 - 95 bear wave is a little worrisome for the bears and as such a break of the 2360/2400 intermediate R (ST Trend and 10 SMA) would confirm our daily doji and would probably lead to a retracement in the pair. 1.2700 would then be to watch. 



TECHNICAL OVERVIEW 



EUR CAD daily 

Comment from 12/02
On 11/07 EUR CAD broke the 5200 level to end up on the 11/11 low of 5007, 193 pts lower (slightly below our 5150/70 area). The pair then rallied to yesterday's high at 5668, 661pts higher. Today, the market is reaching a key R area currency trading news will hold the key to the breakouts. MT Bears will certainly try to use both the 5710/40 area and 5500 area (on a break) to try new positions. 5710/40 is in fact the 200 SMA, MT Trend R and upper BB while the 5500 area is the 10 SMA and 61.8% Fibo from the Oct - Nov bear wave. Inverse Head & Shoulder breakout bulls will wait for a breakout/retracement type formation above the 5710/40 while dip buyers will concentrate on the 5330/60 zone where the 38.2% Fibo from the Oct - Nov bear wave provide decent S.




01/07
EUR CAD burst through the MT Trend R and did not stop its rally before Jan 03 High at 6638. Today, the outlook is slightly bullish as long as the 6130/50 area holds. Bulls will certainly consider the area thanks to the 20EMA and the strong Fibo confluence present in the area (23.6% Fibo from the Nov - Dec bull wave & 76.4% Fibo from the 03 bear wave). If the area breaks S will become R and 5900 will be the first target. Above, 6450/70 will be an aggressive range play but last May's High and the 150% Fib projection from the Sep - Oct bull wave should provide some reaction. A more conservative entry for the bearish crowd will be 6660/6690 thanks to the 61.8% Fibo from the 98 - 01 bear wave, High BB and 03 High. If this forex rate area breaks on strong price action, it would open the door to the 1.6870 and 1.7100 level.

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