Key Currency Pairs 21 April 2013

Forex Update Highlighting Japanese Pairs

by Mike Ber, Forex Alerts

Cross posted with Zentrader.ca and ForexAlerts.ca.

The following is a special weekend report from ForexAlerts.ca recapping the major pairs they cover, how they traded them this past week, and what they look forward next week. They recently launched their service and are offering a 50% discount for a limited time. To learn more about currencies and take advantage of this offer click here.

USD/JPY – Weekly close @ 99.53

Bias: Bullish-Neutral

USD/JPY – 4 hour chart

Levels to watch at the beginning of the week:

Upside: 99.785

Range: 97.404 – 99.785

Downside: 97.404

Commentary:

USD/JPY is trading within the 97.404 – 99.785 range.

Our bias is Bullish-Neutral. The pair has very strong daily and weekly charts, but future outlook remains unclear, due to important upside barrier.

We entered a long position on April 14th @97.71 and April 15th @96.67. Our target was 99.359, and we closed our long positions @99.32 on April 19th.

We see one of two scenarios unfolding for USD/JPY. There are many sellers at 100, but if the magic number is broken the pair will probably extend its run to 102-103, 107, and beyond.

We favor the second scenario with USD/JPY unable to break the figure of 100 this next attempt. We see the possibility for a significant retracement to 95 and 90 next. The recent inability for the pair to break through 100, led to a drop to 95.90 level. This time we may see a more serious reaction if the mood changes. During the next week general markets may determine the fate of the pair. The yen is typically seen as a safe-haven currency, and tends to benefit at times of market instability.

Our USD/JPY trades in April:

April 1st, 2013 – Entered long @92.65.

April 3rd, 2013 – Took some profits – 50% @94.22 (Twitter update) PL: +157 pips profit

April 4th, 2013 – Closed position @96.212 – 50% (Twitter update) PL: +347 pips profit

April 14th, 2013 – Entered long @97.71 (Twitter update)

April 15th, 2013 – Added to long position @96.67 (level from the daily report) (average price 97.19)

April 19th, 2013 – Closed long position @99.32 (level from the daily report) PL: +213 pips profit

No positions

EUR/USD – Weekly close @ 1.3050

Bias: Neutral

EUR/USD – Daily chart

Levels to watch at the beginning of the week:

Upside: 1.31174

Range: 1.30308-1.31174

Downside: 1.30308

Commentary:

We switched recently our bias to Neutral from Bullish-Neutral. We are not offering any levels to buy or short at this point. There is no edge either way.

The pair is in a downtrend (mid-term), and in the uptrend (short-term).

We are aware of the large head and shoulders pattern developing, that can lead to bearish consequences for EUR/USD pair. However, lately head and shoulders patterns seem to be less reliable, simply because they are so obvious. If the move to the downside doesn’t play out the upward momentum may be explosive. That’s another strong reason for us to stay on the sidelines for now, and simply monitor until we see more clarity in the charts.

Our trades EUR/USD in April:

April 4th, 2013 – Opened small short @ 1.28983

April 5th, 2013 – Added to existing short @ 1.3034

April 10th, 2013 – Added to existing short position @ 1.3118

April 15th, 2013 – Closed all the positions @ 1.3072 (updated via Twitter) P/L: -30 pips loss

No positions

USD/CAD – Weekly close @ 1.0262

Bias: Neutral

USD/CAD – 4 hour chart

Levels to watch at the beginning of the week:

Upside: 1.02935

Range: 1.02143 – 1.02935

Downside: 1.00874

Commentary:

USD/CAD is trading within the 1.02143 – 1.02935 range with 1.02935 being strong resistance. We think that if 1.02935 breaks, the pair has potential to go much higher.

We mentioned in previous reports that there are bullish signals shaping up. We continue to monitor this pair, and we might change our bias to Bullish-Neutral in the near future.

Our USD/CAD trades in April:

April 1st, 2013 – Entered Long @1.0137.

April 5th, 2013 – Took some profits @ 1.0195 (50%), targeting 1.02688 with the rest (Twitter update) PL: +58 pips profit

April 11th, 2013 – Stopped out @ 1.0105 PL: -32 pips loss

No positions

GBP/USD – Weekly close @ 1.5226

Bias: Bearish-Neutral

GBP/USD – Daily chart

Levels to watch at the beginning of the week:

Upside: 1.5397

Range: 1.50828 – 1.5397

Downside: 1.50828

Commentary:

No change in bias or outlook. The bias is still Bearish – Neutral.

The pair is trading within the 1.50828 – 1.5397 range.

Fitch has downgraded the UK’s rating to AA+ from AAA on Friday, saying it reflects the country’s weaker economic and fiscal outlook. We still hold 1/3 of our short position to target 1.5082.

Our GBP/USD trades in April:

April 1st, 2013 – Entered Short @ 1.5250

April 3rd, 2013 – Took profits @ 1.5075, (75%) still staying short with a small position, target 1.49089. PL: +175 pips profit

April 5th, 2013 – Added to short @ 1.5350 (average 1.53)

April 17th, 2013 – Closed 2/3 of our position @ 1.52481 (mentioned this level in the report, no Twitter update required) PL: +52 pips profit

We still hold 1/3 of the short position

EUR/JPY – Weekly close @ 129.92

Bias: Neutral

EUR/JPY – Daily chart

Levels to watch at the beginning of the week:

Upside: 130.321

Range: 126.125 – 130.321

Downside: 126.125

Commentary:

Our bias is Neutral. We are waiting on the sidelines until the next trend develops. We mentioned in previous reports, that if you are still in this trade we will recommend closing positions or cutting exposure @130.21. EUR/JPY is waiting for the resolution on USD/JPY’s ability to challenge the barrier of 100. We think that if USD/JPY is unable to break 100, EUR/JPY may retreat to 113-115.

We closed our long positions last week. We may have done it prematurely, but Euro’s situation was very unclear and trading was very volatile. We held positions in both EUR/JPY and USD/JPY, and at the time USD/JPY looked stronger. We’ve made a decision to sell EUR/JPY.

Our EUR/JPY trades in April:

April 15th, 2013 – Entered long @ 127.17 (level on the charts, no Twitter update required)

April 15th, 2013 – Added to long @ 125.63 (level on the charts, no Twitter update required) (average 126.40)

April 17th, 2013 – Closed all positions @ 127.15 (update via Twitter) PL: +75 pips profit

No positions