Hey traders,

It's Michael Johnson from FXTakeover with your update for July 12, 2010. Wow, over half of the year has come and gone already. It's funny how time tends to pass you by when you're focused on achieving your life's goals and/or dreams. Anyway, let's get to the good stuff.

I am not planning on initiating any positions today. I'm analyzing the markets here and looking at all of the different currency pairs and I'm not seeing a whole lot that is of any interest to me. The Federal Reserve Chairman, Ben Bernanke, is speaking today which tends to rattle the markets and they seemingly lose all sense of direction. Then, markets and traders need a day just to digest what the Chairman actually said.

On the other hand, I did find a few pairs that appear to be providing us with some decent set ups. These pairs include AUDJPY, GBPUSD, USDJPY, and NZDUSD. GBPUSD seems to be the most compelling out of the previously mentioned pairs. However, I will give you the levels I am watching for all of these pairs. After all, I can't afford to let my reputation as a good Samaritan go down in flames. (That was supposed to be funny.)

First, let's take a look at AUDJPY. I put together several Fibonacci ranges on a four hour chart and discovered a solid confluence (resistance) zone which resides between 77.70 and 78.20. I was also captivated by this pair because of the strong daily trend line resistance that descends through the middle confluence zone. Unfortunately, there is one factor that gives me pause. The 200 EMA (4 HR Chart) is currently acting as support and resistance for price action right around the 77.30 level. So, with all of that being said, I'm going to look for AUDJPY to break down below the 76.50 level before I take any trades on the short side.

Now let's take a look at GBPUSD. Cable has official broken through daily channel and trend line support. The trend line has now turned to resistance at the 1.5100 level and coincides with the 8 EMA (Daily Chart). Cable also faces significant falling trend line resistance from 11/17/2009 and the falling 200 EMA which should cap any move back toward the upside. Therefore, I am under the opinion that Cable will continue to move lower over the upcoming sessions and will look to initiate a short position on a daily close below the 21 and or 50 EMA.

The next pair on the docket is NZDUSD. I have been tracking and, for the most part, profiting from Kiwi over the last few weeks. Sometimes a certain pair will stick out and seem to show you exactly what its intentions are. Kiwi is currently hovering around daily trend line resistance at the .7100 level. I would not be shocked to see this pair move higher if the second quarter corporate earnings in the USA are upbeat. If price does move higher, look for resistance into the .7150 level and the .7240 level.

At last we come to USDJPY. This pair has seen a rather aggressive move down over the last month (500+ pips) with virtually no retracement to be had. Therefore, I am looking for a push higher into the 90 level. If you are feeling adventurous I would bid for USDJPY at the market (88.65) with a stop around 88.10 and a target up at the 90 level.

Well traders, that sums it up for today. Thanks for stopping by to read my daily update. Have a good and profitable trading day/evening.

Michael Johnson

Founder -http://www.fxtakeover.com