EUR/USD’s key day reversal on Wednesday could mark the end of the recent bullish consolidation phase. Therefore expect to see further weakness in the days to come. The 1.3322 early February high is now being eyed. Once slid through, the 1.3293 21st of February high will be targeted. Below it lies the 1.3199 late December high, the uptrend channel support at 1.3126 and 55 day moving average at 1.3066. Resistance sits at Wednesday’s low at 1.3389, the 50% retracement at 1.3436 and at the 1.3487 February peak. While trading below here, the outlook will remain bearish. Above it lies resistance at the 1.3550 December high and at the 61.8% Fibonacci retracement of the October- to-January descent at 1.3628.
EUR/GBP’s upside corrective phase has almost certainly ended at the February .8505 peak. Within days the 55 day moving average at .8349 is to be reached and also this year’s support line at .8298. Once a drop through it has occurred, the .8265 February low and then the .8221 January low will be back in the picture. Minor bounces should fail in the .8400/21 region which includes all the daily highs from late December to early February. Our medium term forecast will remain bearish while trading below the February peak at .8504.
GBP/USD: The psychological 1.6000 region is expected to cap this week and as long as this is the case, a slip back below the 200 day moving average at 1.5899 is likely to be seen. If fallen through, the February 28th low at 1.5802 could also be revisited. Failure here will have the two month support line at 1.5723 in focus. Support at 1.5650/43 will need to be slipped through, for a medium term reversal lower to be confirmed. This is where the late January and February lows were made. Resistance above 1.6000 remains to be seen at 1.6092/1.6129. This is 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.
AUD/USD only very briefly shot through the 1.0815/45 resistance area and reached 1.0857 before heavily reversing lower. We continue to believe in our false breakout higher and topping scenario while trading below the February 1.0857 high. Minor support at the 1.0651 27th of February low is thus in focus while key support is seen at last week’s low at 1.0598 and the three month uptrend line at 1.0595. Failure here will push the 55- and 200-day moving averages at 1.0477/09 to the fore.
EUR/JPY has been trading above the 200 day moving average at 1.0701 for the past few days but has not yet managed to surpass the 108.75 level which has capped the currency pair in the past couple of days. Once bettered, 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 106.98 is seen around the 14th of November high at 106.78.
USD/CHF seems to have reversed its trend and is now heading back up towards the .9066/88 resistance zone. This is where the late November and mid-February lows as well as the 50% retracement can be found. This will need to be overcome, for a bullish trend reversal to be confirmed. Further up is the downtrend channel resistance line at .9175 and the 38.2% Fibonacci retracement at .9203. We will maintain this, now bullish, view while USD/CHF trades above its February low at .8931. Unexpected failure here will have the .8788/73 support zone in view, though.
USD/JPY is still drawn towards the 81.49/63 resistance area (July peak and the 61.8% Fibonacci retracement of the April-to-October descent) which should be revisited in the days to come. Longer term we remain bullish and have a base measurement to 83.80. Support remains to be seen around the 50% retracement of the 2011 decline at 80.42 and the minor psychological 80.00 level as well as around the 79.55 May low and 38.2% Fibonacci retracement at 79.21.
EasyForexNews Research Team