EUR/USD rallied towards and again failed just ahead of the 1.3291/1.3325 region (9th February high), we look for this to provoke failure. The market will need to erode intraday support at 1.3140 to further alleviate upside pressure and initiate a slide back to the 55 day ma at 1.3112 en route to the recent low at 1.3004. Key near term support remains 1.2974/54, the February low, and a break below here will trigger the slide to the 1.2624 January low. We continue to view the 1.3487 recent high as an interim ceiling for the market. While trading below here, the outlook will remain bearish.
AUD/USD is under pressure following its recent failure at the 50% retracement at 1.0640 and interim resistance at 1.0670. It is eroding the 1.0402 200 day ma and this should trigger a slide to the 1.0382/40. This is the December 2011 high and the measurement down from its small top. This is a minimum target and beyond 1.0340 will look for losses to extend to 1.0260 then 1.0120. The market will stay directly offered below 1.0670.
GBP/USD rally halted yesterday just ahead of the 1.5927 level (8th Feb high), we favour failure now. We continue to view the 1.5992 recent high as an interim ceiling for the market and expect failure ahead of here.
Initial support lies at 1.5760/45, and below here attention should revert to underlying support at 1.5643/1.5599. Prices will need to close below 1.5643 to trigger another leg lower and this should leave the focus on the 1.5235 January low.
USD/CHF has sold off towards but is recovering ahead of key short term support at .9066. This is the November 2011 low. We look for this to hold and provoke recovery. While we note that yesterdays price action was a ‘doji’, marking indecision here, we would like to see more of a bounce to suggest the low at .9066 is ‘safe’. Near term rallies will need to regain .9206/11 (20 day m.a.) in order to refocus attention on to the resistance offered by the .9317 October 2011 peak and the .9342/61.8% retracement. This is considered to be key resistance. Rallies will need to close above the .9317 pivot to initiate further upside buying interest towards the .9595 January peak. Below .9066 would see an extension to the support line at .8998.
USD/JPY has headed into cloud support on the 240 minute chart, this currently offers support at 83.38/82.38. Key short term support is the 82.23 May 2011 peak. We view this as a consolidation ahead of resumption of the bull move. We look for the retracement to be contained by the base of the cloud on the 240 minute chart at 82.38 currently. While this holds, the bull move is fully entrenched and targets are 85.53, the April high then 86.80. This is the 23.6% retracement of the move down from 2007.
EUR/JPY we have repeated warning about the likelihood of seeing profit taking ahead of the 111.57 intervention high. The market has charted a key day reversal and with the new high accompanied by a very large divergence of the RSI, this has all the hallmarks of an interim top. We expect to see a pullback to the 6 week uptrend which is located at 108.45 and possibly the 2 month uptrend at 105.89. Above 111.57 (not favoured) would target 113.29, the 61.8% retracement of the move down from the 2011 peak. Note that we consider KEY support to be 102.21/101.79, the 14th February low.
EUR/GBP while we maintain a negative bias to this market, we are somewhat perplexed by the distinct lack of follow through on the downside. This is worrying, it should have been enough to signal the resumption of the down move and target the .8265 February low and then the .8221 January trough, however this lack of movement implies a possible rebound. We assume that the recent peak at .8423 is an interim peak but key resistance remains 0.8505/24 (the recent high and the 8 month downtrend). While capped here our medium term outlook is bearish.
EasyForexNews Research Team