End of Day – 12 May 2015

Posted On 12 May 2015
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End of Day Technical Analysis Report for:

EURUSD, GBPUSD, AUDUSD, USDJPY, USDCAD, NZDUSD

GOLD and SP500 



DUE TO BUSINESS TRAVEL COMMITMENTS DIRECTOR OF TECHNICAL ANALYSIS AND AUTHOR OF THE DAILY REPORT, STEFANO BRESCHI WAS AWAY LAST WEEK. THE DAILY THEREFORE TOOK A SLIGHTLY DIFFERENT LOOK AT THE MARKETS. YOU WILL BE HAPPY TO KNOW THAT NORMAL SERVICE RESUMES TOMORROW.
► EUR/USD: A strong day for the Euro but a close of the high. It feels indecisive, but that is a feel only. We cannot therefore change our recommendation at this stage as this pair could move either way before breaking out. Fundamentally we believe it will be to the upside as shorts still populate this pair but any Greek negativity could move it lower.
Our stance remains unaltered. As per last commentary you should remain partially Long. Use a trailing Stop.”
Technical Recommendation: Should still be partially Long. If flat look to buy on a retracement.
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GBP/USD: The relentless honeymoon post the general election continues for the GBP. This pair is ripe and due for a correction and it will come. The honeymoon will end as we realise the UK does not live and trade in isolation.
From a technical picture it looks that further upside may be on the cards. Fundamentally however the election honeymoon will come to an end so profit taking would be wise.
Technical Recommendation: Take some profit and/or use a trailing Stop.
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► AUD/USD: Short term weakness ended today however not very convincingly. We will a few more trading sessions like today to confirm a sustainable uptrend. Both fundamentally and technically we are looking to re-enter our old long positions.
Technical Recommendation: Looking to re-enter Long.
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► USD/JPY: From a fundamental point of view this pair is the most important. A clean break lower will strongly suggest that ‘risk on’ is history and commodities can begin their next leg higher.
Today was a good beginning as a reach higher was quickly aborted and the pair closed near the lows.
Stand aside and wait for a better selling opportunity higher up.
Technical Recommendation: Stand aside.
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► USD/CAD: Very similar price action to the Yen. Bodes ill for risk and positive for commodities.
We like our current position.
Nothing has changed.
Technical Recommendation: We are Short. Position ca 145 pips in profit.
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NZD/USDNot as convincing as the CAD and more in tune with the AUD not surprisingly.
This pair is trading near a two month low and has every possibility of surprising on the upside.
Our view remains as is.

Technical Recommendation: Stand aside.

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► GOLD: The 1180 level continues to hold for now.
The range we wrote about yesterday has tightened to 1187-1197 where gold has traded for the last two weeks.
This inertia will not continue and the formed wedge will be broken.
From a fundamental point of view we believe this will be to the upside as 1180 has repeatedly been tested intra day and held.
A break above 1922 could result in a quick move to the 1250 area before the next big decision

Technical Recommendation: Neutral.

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SP500: On the face of it a weak close. However on closer inspection a close well of the lows.

the market has been trading between 2075-2015 for the best part of three weeks.
From a fundamental point of view the path of least resistance would seem to be down but we are happy to let the trend assert itself before changing our recommendation.

Stand aside.

Technical Recommendation: Re-assessing.
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