EUR/USD remains under pressure and we look for 1.3000 to be eroded soon. This will leave the market directly offered and on course for 1.2891/54 (61.8% retracement of recent leg higher) then the 1.2624 January low. Key medium term support is 1.2588/30, and this is expected to act as the break down point to 1.2080 longer term. Longer term we are negative and we would highlight the death crossover of the 55 and 200 week moving averages. We have a minor time zone gap to 1.3053 and it is likely that this will be filed ahead of further losses. Intraday players might like to attempt new shorts here. Rallies should find resistance at 1.3080/1.3200 and will remain directly offered below here.
GBP/USD charted an inside day yesterday but remains under pressure following recent failure at the 200 day ma, at 1.5921 currently. The market remains on course for 1.5603/1.5580, the 55 day ma and the 50% retracement of the move up from January. We would expect to see the market consolidate around here but then look for a break lower. Below 1.5580 will trigger losses to sub 1.5300 once more. Rallies will find interim resistance at 1.5740/1.5830 ahead of the 1.5921/200 day ma.
EUR/GBP repeated failure at 0.8400 finally took its toll and the market has sold off back into its range, our interpretation of this price action is that it is very bearish. The market has executed a ‘return to point of break out’ from its 2008-2011 trendline and failed ahead of key resistance at 0.8420/25, the December high and the 23.6% retracement of the move down from July 2011. Near term support at 0.8330 has been eroded targeting 0.8260 (the 78.6% retracement), ahead of the 0.8221 January low Our longer term target is 0.8067 the 2010 low.
USD/CHF has eroded resistance at .9250/63. It has recently stabilised 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. We look for the .9318 55 day ma to be re-challenged, this is the barrier to the .9595 recent high. Intraday dips should now find support at .9204/.9160 ahead of .9080/66 (which now expected to hold.
USD/JPY after an extensive rally the market is looking a little over-stretched intraday and we would allow for some consolidation ahead of further gains. It has recently eroded its 200 day moving average and this is now expected to act as support at 78.04.. Beyond some minor consolidation 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 charted another relatively tight range, which leaves our immediate outlook unchanged. The near term risk is on the downside as the recent high was coupled with a diverging RSI and we believe upside pressure is waning. Attention remains on channel support at 1.0633, below here lies the 2 month uptrend at 1.0463. 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 continues to consolidate very near term, while dips are contained by trend line support at 101.30, we will maintain a bullish stance. This support is reinforced by the 20 day ma at 101.27. 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