Market Forecast for 05-21-12

We recommended a number of trades over the last month or two that provided some huge potential profits to committed traders. We hope you enjoyed them!

AUDUSD: continues lower from our last sell signal.

The Aussie-Dollar pair is oversold on the daily charts (see below) and likely ready for a quick pop up once the GAP is filled at .9775 to .9750 area. After that, expect further eventual downside to the Andrew's Median Line around .9630, .9500 area where our medium-term price target is, or to the lower Median Line at .9300. Final targets for this intermediate bear move is the .9000-price area, where the trend-lines converge. At that point, a more significant reversal up move for weeks should commence.

ACTION: Look for intra-day reversal POP-up opportunities at .9750  for 100-150 pips, then watch 60-minute trend to turn south again for sell opportunities (weekly and daily charts below).

weekly aussie dollar chart with analysis

audusd daily

EURUSD continues lower from our last major sell signal. The last time I said we would see the Euro drop anther 500 points. We go close in one week!

The daily chart is oversold and we are seeing a short pop up in price. Another few hours down followed by 12-36 hour rally afterwards would likely set it up for a juicy sell signal that takes it to the targets on the weekly charts of around 1.2530-1.2500. Keep in mind that lately, several targets in other markets have been handily exceeded. 

ACTION: Until otherwise decided, we will continue to recommend selling EURUSD on intra-day and daily rallies as long as the respective trends are heading lower. See the weekly/daily Euro charts below:

eurusd weekly chart

eurusd daily

GBPJPY: This currency pair is oversold on the daily charts (see below) and likely ready for a quick pop up, yet we expect one more move lower to around the 123.65 area before a more substantial rally takes hold.

ACTION: Short-term traders look for hours of upside then a rollover short with targets into the 123.65 to 123.20 area for a reversal up.

daily pound-yen chart

USDJPY was stopped out at break even.

USDCHF: Looks like it had a temporary top of this wave. We are looking for an ABC correction, and it looks like Wave A is complete.

ACTION: If we get a 24-48 hour rally and 60-min trend turn lower, we would then look to sell it into the .9350 area before a likely buy wave sets up for new highs (see analysis on chart below).

usdchf daily chart

GOLD broke out of its tightly coiled range as expected and quickly headed lower. We expected support between 1560 and 1503, with 1525 holding for a nice bounce to 1598 thus far. Now a 24-36-hour sell off is likely.

ACTION: Look for short trade opportunity here for a pull back to around 1565 area, where buyers may try to take it higher. That rally will then determine if gold is actually in a bigger bear move or in a large corrective wedge pattern with still one more move up remaining to finish its 8-year cycle top that was due in late 2011 to 2012. Since seasonals top in Feb to March, we have to be cautious for a while (see daily XAUUSD chart below).

daily xauusd chart

STOCK Indexes: The DJI had a very nice sell off into May 20th time zone, as we have been expecting for the past 3 to 4 weeks, slightly exceeding is initial pattern price target. We are now cautious in this area as some support has been reached, yet computer-generated market forecasts show that lower price targets are still available (see weekly Dow chart below). 

ACTION: Look for a quick bounce and a potential retest of lows, with the possibility for further weakness into early to mid June, where an interest rate cycle may give stocks one last push for the election. However, a "crash watch" is still in effect. Be open to both sides now until the pattern assures us that these lows will hold for a while, or if a full blown crash will take hold. Either way, the crash is coming…

weekly us stock market chart

Please give us your take on this report in the comments section below and +1 our post if you find it helpful for your trading.

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3 Responses to Market Forecast for 05-21-12

  1. Bernardo Guevara says:

    i like this page, but i think i need training about forex trading

    • forexdaytrading says:

      I’m glad you found these market reports useful Bernardo. You are right. You need a certain level of experience to really use these reports in your trading. These reports assume that you already know the basics.

      Soon we will be providing a set of training tools (both hands-on and mental) for both beginning and advanced traders. Please keep checking our blog and free training sections regularly for more information.

  2. forexdaytrading says:

    Update on post. Price target of 1.2500 on EURUSD short exceeded by another 200 pips over the course of the week. See our comment on our Google+ page.

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