EUR/USD has sold off towards the 1.2624 January low. We would expect to see some profit taking here ahead of a renewed stab lower to the 1.20 region. We note on the 240 minute chart a loss of downside momentum and we would allow for a small corrective rebound. Minor resistance comes in around 1.2823 (first Fibo) ahead of the 9th of May low at 1.2911 and also at the 61.8% Fibonacci retracement at 1.2954. Corrective rebounds should remain tepid, however. While trading below 1.3026/33 (early February and early April lows) our bias will be to the downside. Failure at 1.2624 will signal another leg lower is underway to the 1.2066, the 55 MONTH ma.
GBP/USD has maintained downside pressure following the break below the 2012 uptrend. It has reached the 38.2% retracement at 1.5894 and we may see some minor consolidation here ahead of further losses. Failure here leaves the market more vulnerable to a sell off to the 1.5828/1.5768 region. This is the 200 day ma and the 50% retracement of the move seen this year. Below here will trigger losses to the 1.5599 March low. Rallies should find resistance at 1.6000, 1.6095 and be contained by 1.6200 to maintain immediate downside pressure.
AUD/USD has sold off towards the December low at .9863. The move lower over the past 2 weeks has been very accelerated and we would allow for some consolidation here.
We have an accelerated downtrend at 0.9944 today and a move above here is likely to trigger a small corrective rally higher. We look for rallies to find interim resistance at 1.0103 ahead of 1.0247/50 (this is a double Fibonacci retracement). We would expect this to hold the topside and provoke failure. Our long term target is for a slide back to .9407/.9388. This is where the 2011 low and the 2009 and April 2010 highs can be found.
USD/JPY has recently eroded its short term downtrend – it has closed above here and this should help to confirm the upside break. The daily RSI has recently diverged on the move to a new low and we are inclined to favour the topside. Focus has shifted to the current May high at 80.61 and then the 81.78 mid-April high. Above here lies the top of the daily cloud at 82.18
USD/CHF has reached the 78.6% retracement resistance at 0.9453. The market has stalled here on the initial test, and we would allow for some profit taking ahead of the move higher. Dips lower should remain well supported by the accelerated uptrend at 0.9333, and while above here the market will remain bid. We should see (beyond a dip) an extension to the January peak at .9595. Please note that .9572 is also the 2008 low and we expect this to hold the initial test. We consider the region as pivotal longer term. Above .9600 longer term will target .9950, the 61.8% retracement of the move down from the 2010 peak. Below the trendline, good support below is seen at .9252.
EUR/JPY continues to grind lower, we have some divergence of the 240 minute RSI, just ahead of the mid-February low at 101.79 and it is possible that we will have some minor near term rebound. However at this stage we remain unable to rule out further losses to the 78.6% Fibonacci retracement at 100.12. Here the market could attempt to base, however. Minor resistance apart from last week’s low at 102.76 is seen at the 7th of May 103.24 low and also at the 50% Fibonacci retracement at 104.24. While below here, immediate downside pressure should be maintained.
EUR/GBP – the market has seen quite a reversal from the .7950 low. The close back above the psychological .8000 mark, together with the divergence of the daily RSI does point to a corrective rebound taking hold very near term. Rallies should find initial resistance at .8096 (time zone gap) ahead of the .8098 resistance line. Key resistance remains at .8221, the January low. While below here, the medium term outlook will stay bearish. Below .7950 we look for another down leg towards the 61.8% Fibonacci retracement of the move in 2007-2008 at .7795.
EasyForexNews Research Team