EUR/USD as expected is struggling at the 1.3300/22 area (last weeks high). Failure here should provoke a sell off back to the 50% retracement at 1.2974, this remains our favoured scenario. Below 1.2974 should trigger losses to 1.2891/54, then 1.2775 en route to the 1.2626 recent low. Very near term we find the 20 day ma at 1.3170 and below here we should see the market come under pressure intraday. Above 1.3322 would delay our outlook for a deeper retracement to 1.3435 and possibly 1.3628 prior to another leg lower. Note that we view short term strength as corrective only and remain longer term bearish.
GBP/USD has started to falter ahead of the 200 day ma at 1.5913. Our favoured scenario is that we will see failure up here and slide back to 1.5645, last weeks low and then 1.5580, the 50% retracement. We have a support line, which cuts in today at 1.5727 and below here would add weight to our idea that the market is set to fail. Slightly longer term, a break below 1.5580 is needed to trigger a move down to sub 1.5300. Rallies will find interim resistance at 1.5881/83 ahead of the 1.5913/200 day ma. Above here lies the 1.5994 2007-2012 resistance line and the 200 week ma at 1.6130 – upside scope is limited, we favour failure.
USD/CHF has once again tested and held the .9080/66 support. This is the February 2012 low, the November low and 38.2% retracement of the move seen from October 2011. It is key short term support, which should ideally hold the downside. Failure here would initiate a slide too .8960 then .8787/67 (200 day ma). Key short term resistance is the 0.9314/31 pivot (October high, November high and the 55 day ma) – the market failed just ahead of this zone last week and we would allow for some more consolidation. We regard this as the barrier to the .9595 recent high.
USD/JPY has started to erode the 79.93/80.25 pivot. This is the 23.6% retracement of the move down from the 2010 peak, the November 2010 low, and of course the 1995 low. It is showing extreme resilience at these levels and little sign of a retracement and we have today attached the 60 minute chart with a Ichimoku cloud as this has underpinned the entire move since the beginning of February and offers support at 79.63/43 currently. Longer term we are bullish. We target 86.85, the 23.6% Retracement of the move down from 2007. Although 82.80 (Fibo) and 85.53 (2011 high) are likely to offer some resting places en route. The market remains directly bid above 78.29/24 and we have a confirmed buy signal on the daily DMI.
AUD/USD continues to falter at the 1.0825 resistance line and has eroded channel support and last weeks low of 1.0629. The market looks increasingly negative and we look for a slide back to the 2 month uptrend at 1.0517 – a break below here is required to negate the upmove. We look for rallies to now struggle 1.0800/25. We are biased toward failure here. Only above 1.0845 will put resistance at 1.1030/80 back on the cards.
EUR/JPY is pushing hard into the 106.02/61.8% retracement of the move down from October. Directly overhead lies a band of resistance which contains the 23.6% retracement of the move down from 2009, the March 2011 low and the 2nd December 2011 high. This is a LOT of resistance and we are wary of profit taking here. Provided dips lower hold over trend line support at 102.01 we will maintain a bullish bias. We note that the cloud support on the 60 minute chart offers support at 105.41/104.81 and we will assume while above here the market is directly bid intraday. Above 106.80 would target the 200 day ma at 107.25 then the 55 week ma at 109.64 en route to 111.32/57 (the intervention high).
EUR/GBP remains bid in its range and has rechallenged the .8400/05 highs seen from last week, we continue to favour failure. This market is somewhat range bound – support lies at 0.8260 (Fibo) and resistance extends 0.8400/31. We maintain a negative bias – the market has seen repeated failure at 0.8400. We believe it has recently 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. We look for losses to extend to 0.8260 (the 78.6% retracement), which is the last defence for the 0.8221 January low Our longer term target is 0.8067 the 2010 low.
EasyForexNews Research Team