EUR/USD has continued to slide and has sold off to the 1.2457 March 2009 low. Despite the fact that the RSI has not confirmed the new low, despite the 13 TD combo count and the 5th of 5th wave count, the market continues to weigh on the downside. Rallies will find initial resistance at 1.2652 and are expected to struggle at 1.2773/1.2825, this is an interim high and Fibonacci retracement. At this stage we assume that the market is on course for 1.2067, the 55 MONTH ma.
GBP/USD has eroded the 61.8% retracement of the move seen in 2012. This was 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 chart has a sell signal on its DMI and Slow Stochastics indicator and we will look for 1.5599 to be eroded for losses to the 1.5463 78.6% retracement then the 2009-2012 support line at 1.5346. Rallies will find interim resistance at 1.5774/1.5875 and should remain contained by the 1.5956 region.
AUD/USD has seen a very small rebound from the .9664 November 2011 low. The accelerated downtrend has been severed and we remain unable to rule out further consolidation 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. However the 240 minute Slow Stochastics and DMI continue to register sell signals and we suspect today the risk is on the downside Corrective rallies will find resistance at .9935, .9989/1.00
USD/JPY continues to chart very tight ranges and remains dominated by the down channel at 79.70 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 eroded major resistance at .9572/.9595. This was the 2008 low and the 2012 high. The daily RSI has not confirmed the new high (diverged) and we have a 13 count on the TD combo – caution is warranted, but for now will just go with the break higher. Target is the .9950/61.8% retracement of the move down from 2010. Dips lower will find interim support at .9529/00 ahead of .9368/35. This represents the March high and the 21st May low. Note cloud support on the 240 minute chart is currently at .9478 and this has underpinned the chart since the beginning of May.
EUR/JPY has started to erode 99.25 the February low, which was regarded as the last defense for the January low at 97.04. Rallies will find initial resistance now at 100.34, 102.13/14, interim highs and the 23.6% retracement of the move down from the April peak. Trendline resistance lies at 103.06. 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 .8055, .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 base of the channel at .7915 then the 61.8% Fibonacci retracement of the move in 2007-2008 at .7795.
EasyForexNews Research Team