EUR/USD is sidelined and 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. Loss of the 20 day ma at 1.3177 intraday would alleviate immediate upside pressure.
EUR/GBP: We are clearly wrong on this market, it has broken above key resistance and based near term, using this base as an approximate measurement higher implies a move towards the 0.8552/38.2% retracement of the move down from the June peak and then the 200 day ma at .8632. This has clearly altered the chart picture short term as we must allow for higher prices. The market will now remain directly bid above 0.8400 and should remain contained by 0.8370, the 50% retracement of the last leg higher.
GBP/USD has at last sold off, its has breached the short term support line and sits on 1.5645, last weeks low. We look for this to be eroded for losses to 1.5615 (55 day ma) and then 1.5580, the 50% retracement. 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 1.5765 and key resistance remains the 200 day ma at 1.5911.
AUD/USD continues to weigh on the downside. The market looks increasingly negative and we look for a slide back to 1.0603 then the 2 month uptrend at 1.0531 – 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, we note the daily RSI and slow stochastics remain negative. Only above 1.0845 will put resistance at 1.1030/80 back on the cards.
USD/CHF is weighing on 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 .8787/68 (200 day ma). Key short term resistance is the 0.9311/31 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 is eroding the 79.93/80.25 pivot. It has reached the 80.41/50% retracement of the move seen in 2011. It remains immediately bid while above the 60 minute chart with a Ichimoku cloud will remain and is well supported by 79.63/76 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. In the short term, the market remains directly bid above 78.29/40 (see daily chart) and we have a confirmed buy signal on the daily DMI.
EUR/JPY continues to push higher. Directly overhead lies a tough band of resistance up to 106.80, 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 102.20 we will maintain a bullish bias. We note that the cloud support on the 60 minute chart offers support at 105.33/59 and we will assume while above here the market is directly bid intraday. Above 106.80 would target the 200 day ma at 107.20 then the 55 week ma at 109.64 en route to 111.32/57 (the intervention high).
EasyForexNews Research Team