USD/CHF – 0.9047

Most recent candlesticks pattern    : N/A
Trend                                    : Near term up

Tenkan-Sen level                       :0.9039
Kijun-Sen level                         :0.9004
Ichimoku cloud top                     :0.8982
Ichimoku cloud bottom                 :0.8958

Original strategy : 

Buy at 0.8970, Target: 0.9100, Stop: 0.8935

Position: –
Target:  –
Stop:-

New strategy  :  

Buy at 0.8970, Target: 0.9100, Stop: 0.8935

Position: –
Target:  –
Stop:-

Dollar’s intra-day rally to 0.9086 after breaking previous resistance at 0.9022 suggests the decline from 0.9183 top has possibly ended at 0.8918 and consolidation with upside bias is seen for further gain to 0.9100 would be seen, however, it is necessary to see a breach of previous resistance at 0.9144 to retain bullishness and signal early upmove has resumed for eventual retest of 0.9183.

In view of this, we are still looking to buy dollar on pullback as 0.8958-65 (current level of the Ichimoku cloud bottom and previous support) should limit downside. Only below said support at 0.8918 would extend the decline from 0.9183 towards previous support at 0.8886 before prospect of another rebound later.

EUR/JPY – 102.98

Recent wave: wave (i) of 3 ended at 105.44 and wave (ii) has ended at 123.33

Trend: Down

New strategy :

Sell at 104.50, Target: 102.50, Stop: 105.15

Position: –
Target:  –
Stop:-

Despite intra-day resumption of recent decline to 101.95 (lowest since 2001), the subsequent quick rebound from there suggests a minor low is formed and retracement to intra-day high of 103.80 cannot be ruled out, however, upside should be limited to 104.45-50 (50% Fibonacci retracement of 107.00 – 101.95) and bring another decline later. A break of said support would extend recent downtrend to 101.41 (50% projection of 107.00-102.22 measuring from 103.80), however, reckon downside would be limited to 100.85 (61.8% projection).

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with diagonal (1) ended at 108.01, followed by wave (2) at 111.93 and wave (3) is unfolding for weakness to 101.00 but psychological support at 100.00 should remain intact.

On the downside, indicated downside target at 101.98 (1.618 times projection of 114.16-108.01 measuring from 111.93) has already been met and further subsequent weakness to 100.85 would be seen. In view of this, would be prudent to wait for such recovery and sell at a higher level. Only above 105.07 (61.8% Fibonacci retracement of 107.00 to 101.95) would signal a temporary low is formed and risk test of resistance at 105.40.

Our preferred count is that the decline from 139.26 is wave C and is sub-divided into (a): 127.00, (b) 138.49 and wave (c) has commenced from there with a diagonal wave 1 (i: 126.95, ii: 134.37, iii: 120.70, iv: 125.24 and then wave v at 119.66). The rebound from 119.66 to 127.95 was an a-b-c wave 2 and wave 3 is taking place from 127.95 with minor wave (i) ended at 105.44. The wave (ii) correction commenced from 105.44 and has ended a 123.33 as a complex correction ABC-X-ABC, so wave (iii) should extend towards psychological support at 100.00.

On the bigger picture, we are treating the rally to 169.97 as end of wave A, then selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), hence, wave (C) has commended from there with minor wave 1 ended at 119.66 and wave 2 at 127.95. This wave (C) of B should be limited to psychological support at 100.00 and reckon 95.00 would remain intact.

Weekly

• Last Candlesticks pattern: Hammer
• Time of formation: 12 July 2011
• Trend bias: Sideways

Daily           

• Last Candlesticks pattern: Shooting star
• Time of formation: 19 Aug 2011
• Trend bias: Near term up

GBP/USD – 1.5703

The British pound opened lower again this week and adding credence to our bearish view that the major decline from this year’s high of 1.6747 to retracement of medium term uptrend and indicated target at 1.5750 and 1.5650/55 (100% projection of 1.6747-1.5781 measuring from 1.6618) had been met. As price is still trading well below all Tenkan-Sen, Kijun-Sen and Ichimoku cloud, bearishness remains for further fall towards 1.5550/60, however, near term oversold condition should prevent sharp fall below 1.5488 (50% Fibonacci retracement of 1.4228-1.6747) and risk from there has increased for a corrective rebound later.

On the upside, whilst recovery back to 1.5800 cannot be ruled out, reckon 1.5858-69 (current level of the Tenkan-Sen and previous resistance) would limit upside and bring such decline to aforesaid downside targets. Only a daily close above 1.5900 would suggest a minor low is in place and risk retracement to psychological resistance at 1.6000 but reckon resistance at 1.6084 would limit upside and 1.6126-28 (current level of the Kijun-Sen and Ichimoku cloud bottom) would limit upside, bring another selloff.

Recommendation: Sell at 1.5800 for 1.5550 with stop above 1.5900

On the weekly chart, a series of windows were formed since the decline began from 1.6618 and as price has clearly traded inside the Ichimoku cloud area (indicated downside target at 1.5650/55 – 100% projection of 1.6747-1.5781 measuring from 1.6618 had been met last week), bearishness remains for further fall to 1.5550 and possibly towards 1.5488 (50% Fibonacci retracement of 1.4228-1.6747). Having said that, near term oversold condition should limit downside to previous support at 1.5345 and the Ichimoku cloud bottom (now at 1.5317) should hold from here.

On the upside, expect recovery to be limited to last week’s high of 1.5869 and bring such a decline. Only above 1.5920 would suggest a minor low is formed and risk test of the Ichimoku cloud top (now at 1.5975) and then towards resistance at 1.6084, however, upside should be limited to the Tenkan-Sen (now at 1.6126) and the Kijun-Sen (now at 1.6190) should remain intact, bring another decline later.

USD/CHF – 0.8828

Most recent candlesticks pattern    : N/A
Trend                                    : Near term up

Tenkan-Sen level                       :0.8821
Kijun-Sen level                         :0.8819
Ichimoku cloud top                     :0.8839
Ichimoku cloud bottom                 :0.8817

Original strategy : 

Buy at 0.8710, Target: 0.8850, Stop: 0.8675

Position: –
Target:  –
Stop:-

New strategy  :  

Buy at 0.8710, Target: 0.8850, Stop: 0.8675

Position: –
Target:  –
Stop:-

Although the greenback has rebounded after yesterday’s fall to 0.8758, a sustained break of indicated resistance at 0.8880/85 is needed to signal the pullback from 0.8927 has ended there and bring retest of this level, above there would extend upmove from record low of 0.7068 to 0.8950 and possibly 0.8970, however, reckon upside would be limited to psychological resistance at 0.9000, bring correction.

If said resistance continues to hold, then further consolidation would be seen and another corrective fall cannot be ruled out. A break of 0.8758 would bring retracement to 0.8730 but reckon 0.8706 (previous support) would attract renewed buying interest and bring another rise later.

In view of this, we would look to buy dollar on next corrective fall. Only below 0.8688 (61.8% Fibonacci retracement of 0.8540-0.8927) would abort and signal a temporary top is formed, then stronger correction to 0.8630 (previous resistance) would follow.

USD/CHF – 0.8595

Most recent candlesticks pattern    : N/A
Trend                                    : Near term up

Tenkan-Sen level                       :0.8593
Kijun-Sen level                         :0.8576
Ichimoku cloud top                     :0.8413
Ichimoku cloud bottom                 :0.8224

Original strategy : 

Buy at 0.8440, Target: 0.8600, Stop: 0.8405

Position: –
Target:  –
Stop:-

New strategy  :  

Buy at 0.8440, Target: 0.8600, Stop: 0.8405

Position: –
Target:  –
Stop:-

Despite yesterday’s rebound from 0.8540, the greenback needs to penetrate this week’s high of 0.8630 to confirm recent upmove from record low of 0.7068 has resumed and extend gain to 0.8650, however, near term overbought condition should limit upside to 0.8700 and reckon 0.8750 would hold from here, risk from there has increased for a correction to take place later.

In view of this, we are still looking to buy dollar on subsequent pullback as renewed buying interest should emerge around 0.8435/40, bring such rise. Below 0.8400/05 would defer and risk retracement to 0.8360/70 but reckon 0.8320/25 (38.2% Fibonacci retracement of 0.7822 to 0.8630) would limit downside and bring another rise later.

USD/CHF – 0.7961

Most recent candlesticks pattern    : N/A
Trend                                    : Near term up

Tenkan-Sen level                       :0.8019
Kijun-Sen level                         :0.8022
Ichimoku cloud top                     :0.8117
Ichimoku cloud bottom                 :0.8097

Original strategy : 

Buy at 0.7950, Target: 0.8080, Stop: 0.7915

Position: –
Target:  –
Stop:-

New strategy  :  

Buy at 0.7900, Target: 0.8050, Stop: 0.7865

Position: –
Target:  –
Stop:-

Although the greenback has fallen again after intra-day brief bounce which faltered below the Kijun-Sen and decline from 0.8240 top may bring a stronger retracement of recent upmove to 0.7935/40 (61.8% projection of 0.8240-0.7994 measuring from 0.8089), reckon previous support at 0.7892 would limit downside and bring rebound later. Having said that, a break of the Kijun-Sen (now at 0.8022) is needed to suggest low is possibly formed but only above resistance at 0.8089 would add credence to this view and then stronger rebound to previous support at 0.8121 would follow.

In view of this, we are inclined to buy dollar on next fall. Below previous support at 0.7875 would risk one more fall to 0.7850 before prospect of another rebound probably tomorrow.

USD/CHF – 0.8073

Most recent candlesticks pattern    : N/A
Trend                                    : Near term up

Tenkan-Sen level                       :0.8026
Kijun-Sen level                         :0.8026
Ichimoku cloud top                     :0.7938
Ichimoku cloud bottom                 :0.7925

Original strategy : 

Bought at 0.7905, met target: 0.8010

Position: – Long at 0.7905
Target:  – 0.8010
Stop:-

New strategy  :  

Buy again at 0.8000, Target: 0.8120, Stop: 0.7965

Position: –
Target:  –
Stop:-

The greenback finally resumed recent rise from record low of 0.7068 in line with our expectation, our long position entered at 0.7905 met indicated target at 0.8010 (with 105 points profit), however, as price has retreated from 0.8158, suggesting consolidation below there would take place and pullback to the Tenkan-Sen (now at 0.8026) is likely. Having said that, renewed buying interest should emerge above 0.7990-95 (61.8% Fibonacci retracement of 0.7892-0.8158) and bring another rise. A break of said resistance would extend the aforesaid upmove towards 0.8201 but minor resistance at 0.8247 should limit upside and 0.8278 should remain intact due to near term overbought condition.

As we have taken profit on our long position, we would look to buy dollar again on pullback. Only below 0.7960 would suggest top is possibly formed and risk weakness to 0.7920/25 but intra-day low at 0.7892 should hold from here.

USD/CHF – 0.7893

Most recent candlesticks pattern    : N/A
Trend                                    : Near term up

Tenkan-Sen level                       :0.7919
Kijun-Sen level                         :0.7923
Ichimoku cloud top                     :0.7908
Ichimoku cloud bottom                 :0.7894

Original strategy : 

Sold at 0.7965, Target: 0.7830, Stop: 0.8000

New strategy  :  

Hold short at 0.7965, Target: 0.7830, Stop: 0.7975

Remark: No update tomorrow, next Candlesticks and Ichimoku Trade Idea update will be made on Monday 22 Aug.

Despite intra-day rebound to 0.7991, as the greenback has retreated after faltering below indicated level at 0.8000, retaining our view that a temporary top has been formed at 0.8020 and consolidation with mild downside bias remains for another corrective fall to yesterday’s low at 0.7825. Looking ahead, only breach of this level would add credence to our view and bring correction of recent rally to 0.7770 (previous support).

In view of this, we are holding on to our short position entered at 0.7965. Only above 0.8000 would risk a retest of 0.8020 but break there is needed to signal upmove has once again resumed for gain to 0.8050.

GBP/USD – 1.6286

Most recent candlesticks pattern : N/A
Trend                                    : Up

Tenkan-Sen level                       :1.6240
Kijun-Sen level                        :1.6240
Ichimoku cloud top                     :1.6251
Ichimoku cloud bottom                 :1.6175

New strategy  : 

Buy at 1.6200, Target: 1.6330, Stop: 1.6165

Cable’s intra-day rebound to 1.6313 suggests the fall from 1.6478 has possibly ended at 1.6111 and consolidation with upside bias is seen for test of 1.6336-38 (previous resistance and 61.8% Fibonacci retracement of 1.6478-1.6111), however, break there is needed to confirm this view and bring a stronger rebound to 1.6390/00 but resistance at 1.6411 should cap upside.

Would not chase this move here and would be prudent to buy cable on pullback. Below 1.6168 support would signal top is formed and bring weakness to 1.6150 but support at 1.6111 should remain intact.

USD/CHF – 0.7575

Most recent candlesticks pattern    : N/A
Trend                                    : Down

Tenkan-Sen level                       :0.7596
Kijun-Sen level                         :0.7612
Ichimoku cloud top                     :0.7709
Ichimoku cloud bottom                 :0.7693

Original strategy : 

Buy at 0.7545, Target: 0.7645, Stop: 0.7510

New strategy  :  

Buy at 0.7525, Target: 0.7645, Stop: 0.7490

As intra-day resistance at 0.7653 has continued to hold and the greenback has retreated in New York morning, suggesting consolidation with mild downside bias would be seen, however, if our view that a minor low formed at 0.7480 is correct, downside should be limited to 0.7520/25 and bring another rebound later. A break of said resistance would add credence to this view and bring retracement to the Ichimoku cloud (now at 0.7693-09), however, Friday’s high of 0.7740 should limit upside and resistance at 0.7801 should remain intact.

In view of this, we are looking to buy dollar on dips for such move but one must book profit on such rebound. Below 0.7480 would abort and signal downtrend has once again resumed and extend weakness to 0.7450 before prospect of another corrective bounce.