EUR/USD saw a very tepid rebound on Monday. The new low of 1.2495 charted last week has not been confirmed by the daily RSI and this suggests caution here and some near term consolidation. Rallies will find initial resistance at 1.2681 and are expected to struggle at 1.2796/1.2825, this is an interim high and Fibonacci retracement. The 1.2495/90 support remains exposed and is regarded as the last defence for 1.2067, the 55 MONTH ma.
GBP/USD has seen a tiny rebound from the 61.8% retracement of the move seen in 2012. This is located at 1.5643 and in conjunction with the March low at 1.5599 represents a key zone on the daily chart. The 240 minute RSI continues to diverge and we would allow for the possibility of a small shallow corrective rebound. Rallies will find interim resistance at 1.5789/1.5887 and should remain contained by the 1.5966 region. Below the 1.5599 March low sees a slide to the 1.5463 78.6% retracement then the 2009-2012 support line at 1.5335.
AUD/USD has seen a slight rebound from the .9664 November 2011 low. The accelerated downtrend has been severed and we favour some further corrective move higher here ahead of more losses back to .9407/.9388. This is where the 2011 low and the 2009 and April 2010 highs can be found. The market has a 13 count on the Tom de Mark TD Combo on the daily chart, that suggests caution. We also note the triple divergence of the 240 minute RSI and this also raises a red warning flag – we would lighten up short positions or tighten stops. We would allow for a corrective rebound to .9935, .9989/1.00
USD/JPY remains dominated by the down channel at 79.79 today – this still leaves near term risk on the downside. We suspect the market is attempting to stabilise, we note that the daily RSI has not confirmed the recent break to a new low but equally price has not managed to overcome the down channel either and while capped here risks will remain on the downside. While capped here we will assume the risk remains for losses to the 200 day ma at 78.59 and possibly to 77.79 – the 78.6% retracement of the same move.
USD/CHF has seen a very shallow dip back from major resistance at .9572/.9595. This is the 2008 low and the 2012 high.. The daily RSI has diverged and we would allow for a small corrective phase/consolidation this week. Dips lower will find interim support at .9529/.9478 ahead of .9395/35. This represents the March high and the 38.2% retracement. Note cloud support on the 240 minute chart is currently at .9433 and this has underpinned the chart since the beginning of May. The .9572/95 resistance is key longer term, we will need to see this broken clearly. This will introduce scope to the .9950/61.8% retracement of the move down from 2010.
EUR/JPY held steady yesterday for the third day just above 99.25 the February low, which is regarded as the last defense for the January low at 97.04. Rallies will find initial resistance now at 102.13/14, interim high and the 23.6% retracement of the move down from the April peak. Trendline resistance lies at 103.25. While below here, an overall downside bias should be maintained.
EUR/GBP remains on the defensive and we are starting to think that the rebound to .8101 is the only rebound we will see. We remain unable however to rule out a deeper correction however following the recent key week reversal from the base of its channel. However rallies will find interim resistance at .8100/01 and should remain contained by .8221, the January low, we also find here the 23.6% retracement of the move down from the 0.9802 June 2011 peak. 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