EUR/USD has cleared this years high at 1.3077 and remains upside corrective. The market is poised to encounter the 1.3141/45 resistance, this is the October low and 55 day ma, between here and the 1.3245/50 zone (38.2% retracement of the move down from October) we expect to see failure. However the market will now need to break below 1.2940 to alleviate upside pressure. Below 1.2940 will target the 1.2871/54 zone – the 20 day ma and then 1.2530/88, the August 2010 low and the 78.6% retracement of the move from 2010-2011. We view near term strength as corrective only and our longer term bias
USD/CHF has again retested the .9250/02 support band (38.2% retracement of the move from October). The outside day to the downside leaves .9200 exposed and below 0.9200 targets .9080/66 (the November low), which will ideally hold, however it is possible that we will see a reaction all the way back to the .8897/55 week moving average.
The market will stay offered intraday while capped by .9340/55. Only above here would alleviate downside risk and allow for recovery to the .9595 recent high.
GBP/USD is pushing hard into the 5 month down trend at 1.5681(on a weekly chart). Failure at this resistance band should see attention refocus on to 1.5500 then the key Fibonacci support at 1.5272 (Long term Fibo and the October 2011 low) and 2009-2011 uptrend at 1.5156. This is MAJOR support and we will need to see a close below here in order to confirm the next leg lower is underway. Our longer term target is 1.4260/29. Above 1.5685 will delay our bearish forecast for an extended correction higher. This would target the 1.5760/80 November 2011 high and possibly the 200 day ma at 1.5976.
USD/JPY has failed to overcome 78.24/37 and sold off (December highs and the 200 day ma). We suspect that the 55 day ma and 100 day ma will offer initial support at 77.41/20 and we look for the market to remain under pinned by the 76.703 month uptrend. We are positive, the market has recently eroded the 4 year downtrend, above the 200 day ma targets the 55 week ma at 79.49. This together with the 80.00/25 pivot is extremely tough resistance and is expected to take several attempts to break.
AUD/USD has maintained upside pressure. We are unable to rule out a move towards the 1.0750/65 highs seen in September and October, these are expected to hold and provoke failure. We look for the upside to remain relatively limited, however will need to break below the 1.0262 2 month uptrend on the daily chart to alleviate upside pressure..
Below the 6 week support line at 1.0262 will alleviate upside pressure and initiate a move lower. This would then target 1.0046/00 en route to .9818 and .9664/80.
EUR/JPY is approaching the 102.55/60 resistance. This is the 38.2% retracement of the move down from October 2011 high and the December 2011 high. That this will hold the topside on the initial test and provoke some profit taking. The market will need to regain this level to add weight to the idea that the market has based from a longer term perspective. Interim support lies at 100.16 (near term uptrend ahead of 98.90, only failure here will refocus attention on to the 97.04 January low.
EUR/GBP has rallied to the 0.8395/38.2% retracement of the move down from November and remains capped there. The generally ‘wedge like’ chart pattern developing is negative and we maintain our bearish bias. A close below 0.8308 will complete the wedge. We continue to favour failure, the market has recently registered a weekly close below the 0.8285 2011 low and targets the 0.8067/2010 low and then 0.7750 (long term Fibo). The close below 0.8285 level has seen these downside targets engage. The .8421 end of December high is key resistance and only above here would signal a deeper retracement to the 0.8498 (the 61.8% retracement of the move down from the end of November peak.
EasyForexNews Research Team