EUR/USD has sold off towards the 55 day ma at 1.3067, which together with the 38.2% retracement of the last leg up at 1.3056 appears to be holding the initial test. Rebounds from here should remain tepid – the market has recently severed its short term uptrend, this in conjunction with the divergence of the daily RSI, implies that the market has topped short term at 1.3322. Key nearby support s regarded as 1.3025/00 region and below here will target 1.2891/54 (61.8% retracement of recent leg higher).. While capped by 1.3215/30, the market will remain directly offered. Near term resistance at 1.3322 (the recent high) ahead of 1.3436, the 50% retracement of the move down from the October peak.
GBP/USD remains on the defensive following recent failure at the 200 day ma, at 1.5925 currently. The market has eroded the 1.5730 low charted last week and attention is on 1.5660, the 38.2% retracement and the 55 day ma at 1.5601. We would expect to see the market consolidate around here. Below 1.5580 will trigger losses to sub 1.5300 once more, but our favoured view is that we are likely to see some consolidation around 1.5600. Rallies will find interim resistance at 1.5830/50 ahead of the 1.5925/200 day ma.
EUR/GBP continues to sit just below the 0.8400 resistance and remains below key short term resistance at 0.8420/25, the December high and the 23.6% retracement of the move down from July 2011. Only above here will confirm short term reversal and introduce scope for a deeper retracement to 0.8550, the 50% retracement of the move down from the June peak. It could be a potential base, but while capped 0.8420/25 risk will remain on the downside. Near term support lies at 0.8330 ahead of 0.8260 (the 78.6% retracement), ahead of the 0.8221 January low.
USD/CHF is attempting to stabilise at support at 0.9080/66 (this is the 50% retracement of the move up from October). We suspect that the market is attempting to base – note the divergence of the daily RSI, which depicts a loss of downside momentum. We would allow for further consolidation today. Recovery over .9250/63 will see the .9316 55 day ma re-challenged, this is the barrier to the .9595 recent high. Failure at .9080/66 (not favoured) will trigger a slide to .8960, the 61.8% retracement and introduce potential to 0.8785, the 0.786 retracement (of the move up from the October low). We also find here the 200 day ma at 0.8757.
USD/JPY has eroded its 200 day moving average – this is the first time it has traded above this level since April 2011. The market has also cleared 78.29 (the high we have seen since the end of November 2011). Beyond some minor consolidation today we look for a move initially the 55 week ma at 79.17, then the 79.55 intervention high en route to the 80.00/25 pivot. Longer term we are bullish. We have seen the market trade through and register a weekly close above its 4 year downtrend last week. The market remains directly bid above 77.35. This guards 76.50 and the 76.00 recent low.
AUD/USD another relatively tight range leaves our immediate outlook unchanged. The near term risk is on the downside as the recent high was coupled with a diverging RSI and this implies that upside pressure is waning. Attention remains on channel support at 1.0616, below here lies the 2 month uptrend at 1.0450. We will need a close below here to negate the upmove. Bearing in mind that we consider the 1.1080 high from last year as significant, we suspect that the market may have already topped at 1.0845. Only above 1.0845 will negate the current correction lower and restore the upmove to 1.10+.
EUR/JPY is consolidating very near term, while dips are contained by trend line support at 101.11, we will maintain a bullish stance. This support is reinforced by the 20 day ma at 101.05. Last week the market eroded key short term resistance at 102.55/60 (38.2% retracement of the move down from the October peak) and in doing so introduced scope to 104.30, the 50% retracement of the move down from November. There is room for a move now to the 200 day ,a at 107.52. Provided dips back from here are contained by the 20 day ma at 101.11, the market will remain well placed to break higher. Below here targets 99.25, the February low.
EasyForexNews Research Team