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27/02/2014: Trading outlook for today


After the initial weakness the major forex pairs have settled down a bit now so we are able to begin to assess the options. Gold and silver have also found support today and retrace some of yesterday’s losses, whilst it would appear that indices are playing catch up on yesterday’s moves.

EUR/USD outlook has changed significantly in the past 24 hours. The top completed below $1.3685 implies a move towards $1.3600 with the next key support not until $1.3560. The pullback rally overnight failed around the neckline resistance and the downside pressure is growing. I am looking to sell this chart now, with any bounce into the 21 pip resistance band $1.3674/$1.3695.

GBP/USD is less clear cut than Euro/Dollar, but the rate seems to be on the drift back towards $1.6603 once more. With some lower highs in place over the past couple of days (the latest at $1.6682), the intraday moving averages are rolling over to reflect a deteriorating outlook. I am looking for any bounce into the band of resistance $1.6657/$1.6677 as a chance to sell for the move back towards the 38.2% Fibonacci retracement of $1.6250/$1.6822.

USD/JPY has broken some key supports in today’s early trading. The 102 pivot level has been broken, as has the intraday uptrend in place since 6th Feb. This now opens the next key low of 101.65 and possibly 101.37. Hourly RSI is oversold now and it is very rare for this not to induce a near term technical rally. Anything back towards the resistance now around 102 could be seen as a chance to sell.

Gold and Silver have both rallied nicely today. The moves above $1331.10 and $21.35 respectively is a bullish reaction to the sell-off both saw yesterday. Both metals need to now formed support back above these levels and if this can be seen then the bulls will have quickly regained control again.

FTSE 100  is now under pressure for a correction. Having fallen sharply below the support band around 6800, the outlook is corrective near term. The 38.2% Fibonacci retracement of the 6416/6866 move comes in at 6694 which is around the support band 6693/6708. There is now resistance in the band 6760/6785 which to hold back any recovery. Below the 6732 reaction low would continue the decline.

DAX is eyeing a test of the key reaction low at 6504 and if this breaks (along with the support at 9480), a top pattern would complete and the outlook would become corrective once more.


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