Forecast for February 1st, 2012
Dollar Index fell much lower than we expected. However, the RSI indicator was supported by the trend’s rising line, we should expect it to rebound from the line and start moving upwards with the target in the area of 84.40. If the price breaks the trend’s line at the RSI, this case scenario will be cancelled.
Yesterday the EUR/USD currency pair tested the broken neckline, one can consider selling Euro at the current prices. The target of the fall is the area of 1.10. The test of the trend’s descending line at the RSI is an additional signal to sell Euro, we should expect the indicator to fall down, at least, into the area of 30. In order to enter the market one should take a look at the shorter timeframes.
At the H4 chart of the pair we have “head & shoulders” reversal pattern forming with the target in the area of 1.2919. Currently the price is forming “right shoulder”, one can consider aggressive sales with the stop above 1.3205 and increase the amount of short positions only after the price breaks the level of 1.3060. If the price breaks the local maximum, this case scenario will be cancelled.
In case of Pound we should also expect the price to fall down, to the support level in the area of 1.5650. The test of the trend’s descending line at the RSI is a good signal to sell the pair. We recommend you to increase the amount of short positions only after the price breaks the channel’s lower border.
Franc also continues falling down inside the descending channel, at the moment one can consider buying the pair with the tight stop. The broken trend line at the RSI is a signal to buy the pair. The target of the growth is the channel’s upper border in the area of 0.9272. If the price continues falling down, this case scenario will be cancelled.