EUR/USD no change – the market will shortly encounter the top of the 7 month channel at 1.3449, this together with the February high at 1.3487 should provoke failure. However a break below 1.3263 (near term uptrend) is needed to alleviate immediate upside pressure. Failure here should be enough to refocus attention onto the 1.3004 recent low and then 1.2974/54, the February low. A break below here will be needed to 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. Above would allow for an extension to the 200 day ma at 1.3597.
GBP/USD has reversed ahead of the 200 week ma at 1.6014 as expected (the market has not traded above here since 2008). The recent high at 1.6001 has also been accompanied by a divergence of the daily RSI and the market is viewed as having topped here. A close below yesterdays low at 1.5842 will confirm. We should see a slide back to 1.5570 (22nd March 2012 low) and the 1.5742 55 day ma en route to underlying support at 1.5643/1.5599. Prices will need to close below 1.5643 to trigger another leg lower. Above 1.6014 will target the 1.6167 October 2011 high.
USD/CHF has sold off to and is attempting to recover from the .9023 4 month support line. The market will need to regain .9066 at the very minimum to alleviate immediate downside pressure. Slow Stochatics have turned higher on the 240 minute chart and we should at least see some consolidation today, we also note yesterdays price action was a ‘doji’ and we favour a near term rebound. A move above the 20 day ma at .9170 would allow attention to re-focus on resistance at .9317/42
AUD/USD has again sold off and remains directly offered while capped 1.0558. We have a down channel at 1.0547 and this resistance is reinforced by the 55 day ma at 1.0602. The outlook is negative, the DMI has a sell signal and the daily RSI continues to point lower. The market is sitting on last weeks low at 1.0340 – this is now exposed and we look for a slide initially towards 1.0260, the 50% retracement of the move up from November 2011. Beyond 1.0260 we look for losses to 1.0120 then 1.00. Above 1.0558 would alleviate immediate downside pressure, however is likely to struggle at the 1.0637/70 highs.
USD/JPY remains under pinned by the 6 week uptrend at 82.34 and while this holds a bullish bias will be maintained. However the market is struggling to overcome the interim resistance offered by the 83.20 cloud on the 240 minute chart. This is seen as the barrier to the recent highs at 84.10/19. Only below 82.34 will leave the market vulnerable to a deeper correction to 81.97 then 81.09 and possibly 80.13, where we would expect price to once again stabilise. Targets remain 85.53, April 2011 high and then 86.80 the 23.6% retracement of the move down from the 2007 peak.
EUR/JPY faces tough overhead resistance offered by the 111.57 Intervention high. We note that the daily RSI is starting to turn lower, and we suspect that the market lacks the impetus to break this resistance at this stage. We also note the 13 count on the TD Combo and the TD perfection set-up, which implies there is a risk of failure here. As a consequence we are alert to initial failure here and a slide back towards the 2 month uptrend at 106.81.Initial supports are the 20 day ma at 109.08 and last weeks low at 108.49. Above 111.57 would target the 113.29 61.8% retracement of the move down from the 2011 peak. Directly above here lies the 113.35 2009-2012 resistance line, we would expect this to hold the initial test..
EUR/GBP has maintained upside pressure and has now reached tougher resistance circa .8400 – where we saw several failures in January and February. Key short term resistance lies at .8414/23 (March high and 5 month resistance line), while capped here we will maintain a downside bias. Target is the .8265 February low and then the .8221 January trough, however there is little to indicate this happening currently.
We assume that the recent peak at .8423 is an interim peak but key resistance remains 0.8505/00 (the recent high and the 8 month downtrend). While capped here our medium term outlook is bearish.
EasyForexNews Research Team