Trade outlooks 10th October 2011

The Euro is once again,as always under pressure with the Greece repayment on Friday and the downgrades by Fitch of Spain and Italy last week that saw the currency drop lower against most pairs.The market however does not expect the Greece to default even though the meeting on the 13th of October of finance ministers that was expected to discuss the next tranche of aid to the troubled economy was canceled. Euro -Zone leaders are ready to fight any defaults to avoid contagion to other bond markets such as Italy and Spain .On the technical side of the equation,the Eur/Usd formed a bearish pin bar on the daily off the 20 moving average and seems to be poised for more bearish momentum this coming week in continuation with the trend.

The Eur/Gbp  also rallied massively on Friday loosing most of its gains. I will be watching for further bearish momentum on Monday with its bearish pattern formation from Friday for a touch of the trend line from August 2010 to date.

The Eur/Jpy has also formed a similar pattern with expectation that the pair may be moving lower this coming week to earlier lows. The Cad/Yen has formed a very bearish pattern  with risk aversion setting in and a flight to safety for investors on Friday after the down grades by Fitch may send the pair much lower this coming week.The Loonie may have gained some ground with the NFP news of a positive increase of 103k jobs but was out weighed by the downgrades which we may continue to see this coming trading week.The pair went as far as 75 level off the 20 moving average but fell back to form a bearish candle that may signal a bearish
continuation.

The Usd/Cad has also formed a bullish pin bar from an area of support and the 21 day moving average which signals a bullish move on the pair from Friday's positive NFP release.

Gbp/Cad and Gbp/Nzd formed a bullish pattern that may be a continuation of the longer term trend from the minor correction.The Gbp/Cad bounced off the 50% fib area and the two 20 and 50 day moving averages to close above the 6150 area signaling further bullish momentum. A target of 6378 highs area should be expected if all technicals remain constant.

Gbp/Nzd has also bounced off the 38.2% fib level and the 20 day moving average and is headed for the 2.05830 area which are the highs on the 10th of April this year.

The Antipodes have formed a major bullish pin bar on the weekly charts which may signal a bullish correction this coming week.However on the daily's they tell a whole different story with the fundamentals supporting a bearish momentum on these currency pairs.The Aussie has a major pin bar off the 50% fib on the weekly chart and a bullish divergence on the RSI.However the daily has a bearish twist to it with a minor pin bar off the 21 day moving average and a bearish momentum from early September.

The Nzd/Usd and the Nzd/Jpy which seem to be positively correlated have also formed a bullish correction candle on the weeklies with RSI showing bullish divergence especially with the Nzd/Usd coming off near the 61.8% fib and from the lows on the 23rd of May to the highs on the 31st of July this year.

Wish you the best trading this week and make sure you do your own analysis.