EUR/USD has eroded the 61.8% retracement of the move seen this year so far at 1.2954 and dropped into 4 month lows. The resistance above 1.3081 is prolific and the 5 and 8 month downtrends at 1.3233/50 offer tough resistance for the market. The market has been broadly contained within the 1.3500-1.2950 limits for 4 months and this range is now expected to act as pretty solid resistance. It should be noted that there is considerable divergence on the 240 minute chart and we would allow for a corrective rebound today. This should remain tepid – daily technical indicators remain negative and our target remains the 1.2624 January low. Interim support is 1.2809, the 78.6% retracement.
GBP/USD has sold off to and reversed just ahead of its initial support at 1.6050, this is the 23.6% retracement of the move seen this year (and the 50% retracement of the move up from mid April). While we would allow for gains today, we are sceptical about the markets ability to resume its upmove – but for now – while above 1.5980, the 4 month uptrend, we will give the upside the benefit of the doubt. While above here the market remains on course to challenge 1.6425/the 78.6% retracement of the move down from the 2011 peak. We have minor resistance ahead of here – a one year resistance line at 1.6330. Key support is the 1.5821/1.5768 Fibonacci retracement and the April low.
AUD/USD has continued lower and has sold off to the base of the short term channel at approximately 1.000 today. This is also psychological support and we would allow for profit taking and would like to cover our short positions. Rallies should find resistance at 1.0122 ahead of 1.0200/28, the 23.6% retracement of the move down from February and the April low. Key resistance is the top of the channel at 1.0395. Beyond a rebound, our outlook remains negative and we look for losses to .9950/19, a double Fibonacci retracement. Our long term target is for a slide back to .9407/.9388, this is the 2011 low and the 2009 and April 2010 highs.
USD/JPY eased lower, leaving our outlook unchanged. The market remains dominated by the 80.55 resistance line. We would currently allow for further slippage to 79.15/78.90 (61.8% retracement and the 55 week ma), where we would expect the market to stabilise and recover. We note the complex divergence of the RSI, however while below the downtrend, the risk will remain on the downside. Only a break above the 80.55 resistance line would signal the end of this corrective phase and allow for gains to the 82.34 cloud resistance and 83.31/39 then the 84.19 recent high. The top of the daily cloud is likely to act as resistance en route.
USD/CHF has taken out the April high and inched into 2 month highs. It has maintained upside pressure following its break of the 2012 resistance line, this leaves our view unchanged – the market is well placed for further gains. The 240 minute chart is showing signs of divergence and we would allow for some near term consolidation. Slightly longer term, we view the price action this year as a consolidation, in an overall bull trend. The move above .9184 adds weight to the idea that the bull trend had resumed. Initial upside target is .9317/42, the March peak, pivot and 61.8% retracement of the move seen this year. A close above here will target .9595, this years high.
EUR/JPY has sold off towards 102.54, the 61.8% retracement of the move seen this year and we would allow for some near term consolidation/profit taking at this juncture. Rebounds while capped by the 104.625 (April low) will have very little impact. Failure at 102.50 would introduce scope to 100.12/00, where we would expect the market to attempt to base. The market will find the previous low at 104.625 will offer immediate resistance ahead of the 105.34 base of the cloud – key resistance is the downtrend at 105.75, while capped here the market will remain directly offered.
EUR/GBP has traded through trendline support extending back to 2007 at .8027 (see weekly chart on the next slide) however the market is finding some support at .8000 and we would allow for a small rebound from here. Rallies should find initial resistance at .8096 (time zone gap) ahead of the .8139 resistance line. Key resistance remains.8221, the January low. Below .8000 will target .7795 longer term. This is the 61.8% retracement of the move 2007-2008.
EasyForexNews Research Team