Forex Weekly Technical Analysis – 18/12/10

EUR is getting weaker each passing day. The markets have witnessed various announcements, summits and meetings in this year. EUR/USD climbed on these hope injection events but each move became shorter and as we can see investors are losing their confidence.
This week we expect the trading range will be between 1.3280 and 1.2900. If the pair can pass 1.3280 resistance, it may reach to 1.3450. If the bears push hard enough to penetrate 1.2900 barrier then 1.2740 is the next major support line.

The latest Commitments of Traders report chart shows that speculators are still increasing their short positions.
Net short EUR contracts reached an all time record, which means that the big pockets have never been more bearish on the Europe’s common currency.
Even though we are bearish on this pair, we can see some retracement before it breaks 1.2900 support.

GBP/USD Technical Analysis
Last week the price action showed that the bearish action on the cable may end temporarily. 1.5450 and 1.5580 may be the trading range for the first couple of days this week. Even though USD has been gaining against other major currencies, GBP/USD is falling slowly.
Bearish EUR/GBP is affecting GBP/USD for sure. Anyway, we are waiting for a breakout to see where we are heading. If the pair can pass 1.5580 resistance, we can see 1.5700 level next. However if GBP/USD fails to pass these levels, it would fall back to 1.5450 and 1.5340 (or maybe 1.5100) levels.

As you can see on our latest CoT chart, the speculators are still keeping their short positions.

AUD/USD Technical Analysis
The economic figures coming out of China are getting weaker and this situation has been affecting AUD. Generally speaking, we expect AUD/USD go lower slowly as the interest rate differential will still work in its favor. It seems that the pair is going to touch 0.9815 next week but we may see an upside movement before it happens. Resistance levels will be 1.0000, 1.0104 and 1.0212. If the pair moves below 0.9900, 0.9815 will be the first support zone.