Daily Observations: September 27, 2012

DailyFX

Current Positions:

- Long AUDUSD from net 1.0422 (1.0525, 1.0455, 1.0421, 1.0435, 1.0390), Stop at daily close

- Long EURCHF from 1.2018, Stop at 1.1990, Target 1 at 1.2500, Target 2 at 1.2750

Pending Positions:

- Pending Long USDJPY daily close >80.65

- AUDUSD: The 61.8% Fibo retracement (September 6 low to the September 14 high) coupled with the 200-DMA at 1.033/40 held as support yesterday, allowing for a rebound today. It is worth noting that a Falling Wedge has formed on the 4-hour charts off of the high, with a close above 1.0420/30 suggesting a breakout back towards the highs. Interim resistance comes in at 1.0415/25 (20-EMA, mid-August swing lows), and 1.0480/85. Near-term support comes in at 1.0370/85 (descending trendline off of the August 9 and August 23 highs, 50-EMA), 1.0335/40, and 1.0270/80. Bias: bullish above 1.0250/70.

- EURUSD: An Inside Day today has kept our levels from yesterday intact: “With the pair closing below the 61.8% Fibo retracement (February 2012 high to the July 2012 low) at 1.2934 [on Tuesday], a move towards the next level of support in the mid-1.2800s was to be expected. Interim support comes in at 1.2825/40 (20-EMA, 200-DMA, late-April swing high). Near-term resistance lies at 1.2905/10 (5-EMA), 1.2930/35, 1.3000, 1.3145, and 1.3165/75 (September high).” Bias: bullish above 1.2935.

- GBPUSD: The GBPUSD rebound today comes as no surprise considering that it had held up remarkably well amid a flight to safety the past week or so. Price has rebounded ahead of the key 1.6120/40 level, leaving the door open for a move towards 1.6400 by the end of the month. “The former April swing highs at 1.6260 (by close), 1.6300 (by high) are in focus, now that the descending trendline off of the April 2011 and August 2011 highs broke last week. Below 1.6120/40 support comes in at 1.6095/1.6100 (20-EMA), 1.5970 (ascending trendline off of August 2 and August 31 lows, former channel resistance off of June 20 and August 23 highs), and 1.5770/85 (late-August swing lows). Bias: bullish above 1.6140.

- USDJPY: Price hovers near the key 77.65/70 level, a major level of support considering it was the June 1 swing low that held for three-months. A daily close above this level eyes resistance at 77.90, 78.10/20, 78.60, 78.90/95 (100-DMA, descending trendline off of the April 20 and June 25 highs), and 79.20/30 (200-DMA, September high). Should price close at or below 77.65/70, support comes in at 77.45/50, and 77.10/15 (September low). Bias: bearish.

Any other trade ideas and general macroeconomic musings can be found in the Real Time Newsfeed, or by following me on twitter @CVecchioFX.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

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