Forex Technical Analysis | Mid-term Forex Outlook

Midterm Forex Majors Outlook

EUR/USD


02 June 2008 - 1.5506 The currency pair is in a long-term uptrend from the 1.1640 bottom (15 November 2005). Technical indicators are still downtrending on daily basis from the 1.5901 peak and trading is situated between 50- and 200-day SMA, currently projected at 1.5664 and 1.4838. The consolidation phase after the 1.5901 local top (17 March 2008) appeared to be larger than previously expected and our time-adjusted target turned out to be only an inner reversal point of the whole corrective construction. Having in mind the unchanged situation on the higher time-frames, we will keep our bullish outlook for renewing of the general uptrend beyond the psychological 1.60+, en route to 1.6566. In our opinion the recent peak at 1.6019 was an inner part of the "irregular correction", that took place since 17 March 2008. From a closer point of view, the slide from 1.5818 is not yet completed as it has a potential targets at 1.5283 and 1.5211 before reversal and a rise towards 1.6019. During the first decade of the month we will expect the pair to finalize its downward movement from 1.5818, by setting a reliable bottom around 1.5211, as from these levels an uptrend should emerge, aiming at 1.6019. Potential target of the forthcoming rise is 1.6566, but it is important to have in mind, that above 1.6019 there are no market resistances, so any level beyond the mentioned 1.6019 can only have a projection importance. Confirmation of our view will be breaking above 1.5818 in an impulsive mode. Crucial is 1.4967, as a steady break below the important weekly support base will turn our bullish outlook to neutral.
Resistance	Support
1.5818 1.6019 1.6341 1.6566	1.5283 1.5211 1.50+ 1.4439

USD/JPY


02 June 2008 - 104.71 A clear downtrend is on the run from the midterm top at 124.14 and it has broken below the important dynamic support projected at 107.21-60, reaching low at 95.75. Technical indicators are neutral on daily basis and trading is situated between the 50- and 200-day SMA, currently projected at 103.13 and 108.66. The pair is still in the weekly ranging mode since the short-term bottom at 95.75 and we will keep our expectations, based on the higher time-frames, that the overall downtrend from 124.14 is still intact and new lows lie ahead. More closely speaking, trends on the lower frames are clearly ascending with a potential target at 106.68 and crucial support at 102.63. We hold on to our previous view for continuation of the bear market in the US markets and we think, that DJIA is already in a downtrend for a break below 11 640, towards 11 192. Even during the first two weeks of the month we will expect the pair to finalize its uptrend from 102.63, respectively the whole raising from 95.75, by setting a high around 106.68 and a sell-off to follow for a break below the important support at 102.63, en route to 95.75. Crucial for the bearish outlook will be a steady break above the 200-day SMA at 108.66 or in particular a weekly "close" above 106.68.
Resistance	Support
106.68 108.66 114.68	102.63 100.82 95.75 90.20

GBP/USD


02 June 2008 - 1.9611 The currency pair is still in the corrective phase in relation with the downtrend from the 2.1160 long-term top. Technical indicators are rising on daily basis and trading is situated below the 50- and 200-day SMA. currently projected at 1.9755 and 2.0032. As expected the pair has tested the important support at 1.9338-67 and as the test failed, the rebound reached high at 1.9851. In our opinion one more upmove towards 2.0397 and probably 2.06222 is needed before finalizing the consolidation since the 1.9338 midterm bottom (22.01.2008) and before setting the stage for the next big downtrend towards 1.80+. From a short-term point of view the accent is clearly positive and the pair will brake through the 1.9851 resistance, targeting 2.0225. During current month we expect the pair to continue upwards beyond 1.9851, towards 2.0397, but rather choppy than in an impulse and probably a significant top will be set at the end of the period, around 2.0522. Crucial for our bullish outlook is 1.9338, as a break below that level will confirm, that the general downtrend is on the run, towards 1.80+.
Resistance	Support
1.9851 2.0225 2.0397 2.0622	1.9534 1.9338 1.9190 1.90 - sentiment

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These analyses are for information purposes only. They do not post a buy or sell recommendation for any of the financial instruments herein analyzed. The information is obtained from generally accessible data sources.
The forecasts made are based on technical analysis. However, Deltastock's Analyst Department also takes into consideration a number of fundamental and macroeconomic factors, which we believe may impact the price moves of the observed instruments.
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