Forecast for December 21st, 2011
Despite our expectations, the EUR/USD currency pair started the correction. Currently at the daily chart of the pair the closest resistance line is the broken neckline. One can consider selling the pair from the level of 1.3165 during the test of the neckline.
At the H4 chart of the pair the price continues forming the descending pattern, but with new targets in the area of 1.2555. The area of sales is the one of 1.3207. If the price breaks the channel’s upper border, this case scenario will be cancelled. The test of the trend’s descending line at the RSI is a signal to sell the pair, one can try to do it at the current prices.
At the weekly chart of Dollar Index the price has formed “head & shoulders” reversal pattern with the target in the area of 89.33. Currently the price is testing the broken neckline, we should expect it to rebound from the line and start moving upwards. If Index breaks the level of 77.65, this case scenario will be cancelled.
At the H4 chart of Index the RSI indicator was supported by the trend’s rising line. We shouldn’t exclude the possibility that Dollar may grow against other currency pairs from the current levels.
Franc also fell down. At the moment the price is testing the rising channel’s lower border, one can consider buying the pair with the tight stop. The closest target of the growth is the area of 0.9700. If the price breaks the level of 0.9255, this case scenario will be cancelled. One should consider increasing the amount of long positions only after the price breaks the level of 0.9340.
At the daily chart of the USD/CAD currency pair we can see the formation of “triangle” pattern. The RSI indicator is supported by the trend’s rising line. There is a strong possibility that the price may break the pattern upwards. The closest target of the growth is the area of 1.1185.