At a glance: Signs of change
The weak market behavior observed on Tuesday intensified yesterday when risk markets broke a couple of trend lines and neckline supports across the board. This is still nothing decisive yet on big scale, but could be interpreted as the early tremors of a bigger setback. The EUR followed as expected but would have to break key-supports at 1.3258 (minor 38.2 %) in EUR/USD and at 109.84 to 109.14 (pivot/minor 76.4 %) in EUR/JPY to confirm an intermediate top in place. Cable seems to be front running once more but would also have to break below a strong support zone between 1.5771/48 (pivots) and 1.5720/1.5697 (daily trend/minor 76.4 %) before the bears would be in full control. High beta currencies have also come under increased pressure so that the expected setbacks in CE3 currencies are finally taking shape. That said, it would only take breaks above the preceding highs at 294.94 in EUR/HUF, at 24.806 in EUR/CZK and at 4.1797 in EUR/PLN to rip the upside wide open for a much broader countertrend rally, which usually retraces 76.4 % of the preceding decline. For EUR/HUF, this projects 315.16, for EUR/CZK 25.728 and for EUR/PLN 4.4781. The final confirmation for such broad upswings would however only be given on breaks above 4.2535 (int. 38.2 % in EUR/PLN) and above 25.014 in EUR/CZK
Short1 unit NZD/JPY from 67.31, target 63.00, stop at 69.20
Short 1 unit GBP/USD from 1.5875, add 1 unit at 1.6120 or at 1.5650 on stop, targets 1.5450/1.4850, stop 1.6250
Short 2 units NZD/CAD from 0.7921 avg., target 0.6500, stop at 0.8501 (2012 outlook trade)
Short 1 units EUR/KRW from 1548, add 1 unit at 1600, target 1300, stop at 1670 (2012 outlook trade)
Short 2 units PLN/HUF from 70.307 avg., targets 58.00 & 52.50, stop at 73.35
Short 2 units EUR/INR from 64.90 avg., targets 58.50 & 55.50, stop at 70.85
Long 2 units EUR/NZD from 1.6091 avg., targets 1.7450 & 1.8100, stop at 1.5650
Long 1 unit EUR/SEK from 8.7845, add 1 unit at 9.0300 on stop, target 9.3500, stop at 8.7650
Long 2 units EUR/CZK from 25.210 avg., targets 28.30 & 29.015, stop at 24.15
Long 2 units USD/CZK from 17.255 avg., target 23.50, stop at 18.25
Long 2 units USD/ZAR from 8.125 avg., target 10.61, stop at 6.80 (2012 trade)
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J.P.Morgan