At a glance: Inconclusive
While risk markets are treading water at or below internal 38.2 % retracement’s without providing new evidence where to head next, market participants are still scratching their heads in terms of how to evaluate the French-German summit or the SNB’s decision not to peg the CHF, but to extend their interventions via currency swaps. The latter seems to work at least in the short-run as CHF started to lose ground again in the 2nd half of yesterday’s trading session and given the current chart pictures there still seems to be room to extend the latest rebound in EUR/CHF to 1.1892 (pivot/daily trend) or at its extreme to 1.2289 (int. 38.2 %), to 0.8211 and 0.8399 (int. 38.2 %/weekly trend) in USD/CHF or to 1.3622/35 (int. 38.2 % on 2 scales) in GBP/CHF, what would provide a good risk-reward to bet on a potentially missing 5th wave decline. Despite making additional gains in EUR/USD the general situation has not changed at all as the row of lower tops at 1.4537/79 remains unbroken so far, so that the risk of reversing down south persists. To now re-enter negative territory, it would take a break below a support zone between 1.4324/11 (last intra-day low/minor 50 %) and 1.4293 (pivot) though. Cable on the other hand has managed to break above key-resistance at 1.6520/49 (int. 76.4 %/pivot) and needs to stabilize above in order to support a test of the main pivotal resistance at 1.7044/49. A break below 1.6412 (int. 38.2 %) would in this context indicate a failed upside breakout. The breaks above internal 50 % retracement’s at 0.8405 (NZD/USD) and at 1.0505 (AUD/USD) have opened limited upside to internal 76.4 % retracement’s at 0.8637 and at 1.0810 at best.
- Short 2 units EUR/USD from 1.4205 , targets 1.3350 and 1.3120, stop at 1.4600
- Long 2 units USD/CZK from 16.85, add 2 units on a break above 17.65, target 19.02, stop at 16.05
- Short 2 units EUR/INR from avg. 63.30, target 55.50 & 52.00, stop at 68.50
- Short 2 units PLN/HUF from avg. 68.604, target 64.00, stop at 68.600
EUR/USD hourly – Range breakout at 1.4537/79 or at 1.4324/1.4293 required to receive directions
- Another mixed performance yesterday as the market managed to break above previous intra-day tops but failed once more to produce a daily close above the Ichimoku-cloud at 1.4456.
- That said and with the row of lower tops still intact at 1.4537/79 this market remains at risk of accelerating down south, indicated below 1.4324/11 to 1.4293 (pivot/int. 50 %/pivot).
GBP/USD hourly – Break above 1.6520/49 looks constructive as long as 1.6412 is defended
- Having cleared key-resistance at 1.6520/49 (76.4 %/pivot) the upside is theoretically open for a test of the main pivotal resistance at 1.7044/49, but so far the market hasn’t developed any upside momentum, what points towards overshooting only.
- That said, we keep a close eye on 1.6412 (int. 38.2 %) as a break below would confirm it.
EUR/GBP daily – Defense of 0.8703/01 essential to keep the inverted H&S bottoming formation intact
- The latest setback has reached the first T-junction at 0.8703/01 (left shoulder/int. 76.4 %), which has to be defended in order to keep a potential inverted H&S bottoming formation intact.
- A break below the latter and ultimately below neckline support at 0.8649 would end these dreams in favor of a test the next lower T-zone between 0.8528 and 0.8474 (76.4 % on higher scales), which can be seen as the last resort for EUR bulls.
- For them to be on the safe side, it takes a break above 0.8889 (neckline).
EUR/PLN daily – Defense of key-support at 4.1176/4.1048 suggests that one minor new top is missing
- Given the stabilization above the key-support zone between 4.1176/64 and 4.1048, prospects of at least missing one minor new top remain very good, particularly looking at the whole row of higher lows following the last 3.8933 low.
- It is however still questionable whether the next bull-swing will have enough momentum to clear the May 2010 top at 4.2456, what is required to extend the upside towards 4.3323 (pivot) and to 4.3682/4.3770 (Fib.-proj/50 %) next.
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J.P.Morgan
Global FX Strategy
While risk markets are treading water at or below internal 38.2 % retracement’s without providing new evidence where to head next, market participants are still scratching their heads in terms of how to evaluate the French-German summit or the SNB’s decision not to peg the CHF, but to extend their interventions via currency swaps. The latter seems to work at least in the short-run as CHF started to lose ground again in the 2nd half of yesterday’s trading session and given the current chart pictures there still seems to be room to extend the latest rebound in EUR/CHF to 1.1892 (pivot/daily trend) or at its extreme to 1.2289 (int. 38.2 %), to 0.8211 and 0.8399 (int. 38.2 %/weekly trend) in USD/CHF or to 1.3622/35 (int. 38.2 % on 2 scales) in GBP/CHF, what would provide a good risk-reward to bet on a potentially missing 5th wave decline. Despite making additional gains in EUR/USD the general situation has not changed at all as the row of lower tops at 1.4537/79 remains unbroken so far, so that the risk of reversing down south persists. To now re-enter negative territory, it would take a break below a support zone between 1.4324/11 (last intra-day low/minor 50 %) and 1.4293 (pivot) though. Cable on the other hand has managed to break above key-resistance at 1.6520/49 (int. 76.4 %/pivot) and needs to stabilize above in order to support a test of the main pivotal resistance at 1.7044/49. A break below 1.6412 (int. 38.2 %) would in this context indicate a failed upside breakout. The breaks above internal 50 % retracement’s at 0.8405 (NZD/USD) and at 1.0505 (AUD/USD) have opened limited upside to internal 76.4 % retracement’s at 0.8637 and at 1.0810 at best.
° Short 2 units EUR/USD from 1.4205 , targets 1.3350 and 1.3120, stop at 1.4600
° Long 2 units USD/CZK from 16.85, add 2 units on a break above 17.65, target 19.02, stop at 16.05
° Short 2 units EUR/INR from avg. 63.30, target 55.50 & 52.00, stop at 68.50
° Short 2 units PLN/HUF from avg. 68.604, target 64.00, stop at 68.600
EUR/USD hourly – Range breakout at 1.4537/79 or at 1.4324/1.4293 required to receive directions
° Another mixed performance yesterday as the market managed to break above previous intra-day tops but failed once more to produce a daily close above the Ichimoku-cloud at 1.4456.
° That said and with the row of lower tops still intact at 1.4537/79 this market remains at risk of accelerating down south, indicated below 1.4324/11 to 1.4293 (pivot/int. 50 %/pivot).
°
° GBP/USD hourly – Break above 1.6520/49 looks constructive as long as 1.6412 is defended
°
°° Having cleared key-resistance at 1.6520/49 (76.4 %/pivot) the upside is theoretically open for a test of the main pivotal resistance at 1.7044/49, but so far the market hasn’t developed any upside momentum, what points towards overshooting only.
° That said, we keep a close eye on 1.6412 (int. 38.2 %) as a break below would confirm it.
°
° EUR/GBP daily – Defense of 0.8703/01 essential to keep the inverted H&S bottoming formation intact
°
°° The latest setback has reached the first T-junction at 0.8703/01 (left shoulder/int. 76.4 %), which has to be defended in order to keep a potential inverted H&S bottoming formation intact.
°° A break below the latter and ultimately below neckline support at 0.8649 would end these dreams in favor of a test the next lower T-zone between 0.8528 and 0.8474 (76.4 % on higher scales), which can be seen as the last resort for EUR bulls.
° For them to be on the safe side, it takes a break above 0.8889 (neckline).
°
° EUR/PLN daily – Defense of key-support at 4.1176/4.1048 suggests that one minor new top is missing
°
°° Given the stabilization above the key-support zone between 4.1176/64 and 4.1048, prospects of at least missing one minor new top remain very good, particularly looking at the whole row of higher lows following the last 3.8933 low.
°° It is however still questionable whether the next bull-swing will have enough momentum to clear the May 2010 top at 4.2456, what is required to extend the upside towards 4.3323 (pivot) and to 4.3682/4.3770 (Fib.-proj/50 %) next.