EUR/USD last week rejected the 78.6% Fibonacci retracement at 1.4732, and sold off. We view this as the market charting an interim top at 1.4697 and consider the short term risk has now shifted to the downside. We look for a sustained break below cloud support at 1.4322 to trigger another slide to the 1.4010/1.3968 support, which represents recent low and 200 week ma.
USD/CHF at the end of last week started to recover. The market has seen a rebound from its .8351 8 year channel support. Key support is the .8328 recent low and while above here we would allow for recovery very near term to the .8554 May low.
GBP/USD spent much of last week contained by the short term downtrend at 1.6465, selling off below its 55 day ma on Friday. It starts this week on the defensive and the outlook remains negative. Initial target is the December-to-June uptrend line at 1.6152 and then the 1.6058/54 support zone (May low and 50% retracement of the move higher seen this year). This is the break point to the 1.5999/200 day ma then the 1.5799/55 WEEK ma.
USD/JPY no change – the market is attempting to bounce from the 79.79/57 support (61.8% Fibonacci retracement of the March-to-April advance and May low). This needs to hold for a recovery towards the 2 month resistance line at 80.91 to remain viable.
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