EUR/USD remains capable of testing the top of the 7 month channel at 1.3442, this together with the February high at 1.3487 should provoke failure. The near term uptrend has been eroded and we should see the market ease back towards the 20 and 55 day ma at 1.3210/1.3174. 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 1.3593.
GBP/USD is expected to fail at the 200 week ma at 1.6014. The market has not traded above here since 2008. The recent high at 1.6001 was not confirmed by the daily RSI and failure is favoured. A close below 1.5770/65 (low 22nd March and 55 day ma) will add weight to this idea. However we acknowledge that price action has been resilient and above 1.6014 will target the 1.6167 October 2011 high (not favoured). Below 1.5770/65, we should then see a slide back to 1.5570 (22nd March 2012 low) and the 1.5765 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.
AUD/USD did not sustain the break of last weeks low and cloud support circa 1.0340 and is expected consolidate today. There is some divergence on the 240 minute chart on the move to this new low and we would allow for a rebound towards the top of the channel at 1.0533, where we would expect failure. Target remains the 1.0260/50% retracement of the move up from November. The market remains directly offered while capped 1.0533/58. 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/CHF continues to weigh on the .9027 4 month support line and .9016 Fibonacci support (78.6% of the move up from February). The market will need to regain .9066 on a closing basis at the very minimum to alleviate immediate downside pressure. A move above the 20 day ma at .9162 would allow attention to re-focus on resistance at .9317/42 (recent high, October 2011 high and the 61.8% retracement – of the move down seen this year). Below .9016 would target the .8931 February low and potentially the 200 day ma at .8850.
USD/JPY failed to regain the cloud resistance on the 240 minute chart and has now eroded its 6 week uptrend. As a consequence the short term risk has shifted to the downside and the market is vulnerable to a deeper correction to 81.08 and possibly 80.11, where we would expect price to once again stabilise. Note that this low 80.00/79.80 region has proved pivotal in the past and we would expect to see signs of reversal down here (low November 2010 and the 1995 low). Once the correction lower has run its course we look for the bull trend to reassert. Targets remain 85.53, April 2011 high and then 86.80 the 23.6% retracement of the move down from the 2007 peak.
EUR/GBP has at last baulked in the face of tougher resistance circa .8400 – this is where we saw several failures in January and February. Key short term resistance lies at .8410/23 (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.
EUR/JPY failed as expected ahead of the 111.57 Intervention high. This was technically well flagged by the diverging daily RSI and the TD perfection set-up, which implied there was a high risk of failure. We look for a slide back towards the 2 month uptrend at 107.00. Initial support is last weeks low at 108.49 and we may well see some consolidation today ahead of here. Intraday rallies are expected to find interim resistance at 110.00/30 and remain capped by the 111.25/57 resistances.
EasyForexNews Research Team