EUR/USD: The break out of Monday’s inside day in the EUR/USD should determine the trend for the next few days. Since the break has been to the upside, the 1.3550 December high is now being targeted. Between it and the next higher 61.8% Fibonacci retracement of the October-to-January descent at 1.3628 the recent upside momentum is likely to diminish, however. The current acceleration higher is being viewed as a deeper corrective phase within an overall bear trend. Support comes in around the 50% retracement of the October-to-January decline at 1.3436. and then only at the 1.3322 early February high. Unexpected failure here will eye the 1.3293 21st of February high. Below it lies the 1.3199 late December high. Today’s trade: Buy at market (1.3485) and place stops below 1.3390 with a target at 1.3600.
AUD/USD has probed the 20th of February high at 1.0815 and seven month resistance line at 1.0820 on Wednesday morning. While this caps on a daily New York closing basis, we will maintain our toppish scenario. We have to allow for a brief spike above it, though. Should the 1.0815/45 resistance area be breached and a daily New York close above it be made, the 1.1000 region will be back in play. Key support can be seen between last week’s low at 1.0598 and the three month uptrend line at 1.0581. Failure here will push the 55- and 200-day moving averages at 1.0463/08 to the fore.
GBP/USD: The 1.5898/1.5927 resistance area, which includes all the February highs and the 200 day moving average, capped GBP/USD in the past few days but finally gave way on Wednesday morning. The psychological 1.6000 region is thus in focus. Further up lurks the 1.6092/1.6129 resistance zone, made up of the mid-November highs and the 61.8% Fibonacci retracement of the August-to-January decline. Above it lies the October peak at 1.6167 which should offer strong resistance, though. We will maintain this short term bullish view while support at 1.5650/43 holds (late January and February lows). The current advance should be viewed as nothing else than a correction within a longer term downtrend.
USD/CHF: The break out of Monday’s USD/CHF inside day to the downside has led to the .8788/73 support zone being in view. It is where the 78.6% Fibonacci retracement and 200 day moving average come together. Key support below this area sits around the October low at .8568. Minor resistance can be seen at Monday’s .9011 high and at the .9066/88 resistance zone. This is where the late November and mid- February lows are to be found as well as the 50% retracement. While trading below here, the short term outlook will stay bearish.
USD/JPY: On Tuesday USD/JPY retested the minor psychological 80.00 level and bounced off it. Provided that it continues to underpin, together with the 79.55 May low, the 81.49/63 resistance area (July peak and the 61.8% Fibonacci retracement of the April-to-October descent) should be revisited in the days to come. Should this unexpectedly not be the case, the 38.2% Fibonacci retracement of the 2011 decline at 79.21 may be retested. Longer term we remain bullish and have a base measurement to 83.80. Please note that it is our minimum upside target.
EUR/GBP again grinds higher towards the .8531/33 resistance area which contains the September and October lows. This should remain to be the case as long as the December-to-February support line at .8398 acts as good support. Not far above .8531/33 lie the 38.2% Fibonacci retracement of the July-to-February decline at .8550 and the eight month resistance line at .8563. In this region the short term uptrend should struggle, however. Support sits at Monday’s .8442 low and remains to be seen around the .8421 late December high with further support coming in at .8410/05. This is where the late January and early February highs were made.
EUR/JPY has been supported by the 200 day moving average at 1.0701 for the past couple of days. As long as this continues to be the case, the 55 week moving average and July low at 109.51/58 will be back in the picture, together with the 50% retracement of the April- to-January decline at 110.185 which also remains in sight. Between it and the October peak at 111.57 the currency pair should lose upside momentum, however. Support below the 200 day moving average at 107.01 comes in around the 14th of November high at 106.78.
EasyForexNews Research Team