EUR/USD continued to rally yesterday, the near term rally is viewed as corrective, but we would allow for a return to the 1.3291/1.3325 region (9th February high), however we would again expect that to provoke failure. The market will stay bid intraday above 1.3135. Key near term support remains 1.2974/54, the February low, with a break below here triggering the slide to the 1.2624 January low. We continue to view the 1.3487 recent high as an interim ceiling for the market. While trading below here, the outlook will remain bearish.
GBP/USD extended its rebound through the 200 day ma at 1.5859 and we would allow for further possible gains towards 1.5927 (8th Feb high), however we continue to view the 1.5992 recent high as an interim ceiling for the market and expect failure ahead of here. Initial support lies at 1.5755/45, and the market will stay bid intraday above here. Prices will need to close below 1.5643 to trigger another leg lower and this should leave the focus on the 1.5235 January low.
AUD/USD continues to rebound very near term from the 200 day ma at 1.0404. This rebound has been deeper than we anticipated, however we look for the market to find interim resistance at 1.0670 and remain capped by the 1.0857 February peak. Beyond this rebound we maintain our bearish bias – we view the market as having topped recently and we target 1.0382/40, the December 2011 high and a top measurement to 1.0340.
USD/JPY no change the market remains corrective very near term following its move last week to its initial target of 83.80. We would allow for a slightly deeper retracement towards the 82.23 May 2011 peak. We view this as corrective only – this is not regarded as the end of the move. We look for the retracement to be contained by the base of the cloud on the 240 minute chart. The cloud is currently located at 82.40/81.90. While this holds, the bull move is fully entrenched and targets are 85.53, the April high then 86.80. This is the 23.6% retracement of the move down from 2007.
USD/CHF again sold off yesterday and remains capable of of retesting key short term support at .9066. This is the November 2011 low. We look for this to hold and provoke recovery. The market was recently rejected by the .9317 October 2011 peak and the .9342/61.8% retracement towards the end of last week and this is key short term resistance. Intraday rallies need to regain .9215/24 (20 day ma) to alleviate immediate downside pressure. Rallies will need to close above the .9317 pivot to initiate further upside buying interest towards the .9595 January peak.
EUR/JPY has eroded the 50% retracement of the April-to- January decline at 110.26 . The market remains directly bid above the 6 week uptrend which is located at 107.93. It targets the October peak at 111.57, where we suspect that the market may struggle on the first attempt. Longer term we target 113.29, the 61.8% retracement of the move down from the 2011 peak. Below 107.93 would target the 2 month uptrend at 105.52, where ideally we should see signs of stabilisation. Note that we consider KEY support to be 102.21/101.79, the 14th February low.
EUR/GBP has eroded the 2 month uptrend but seen no follow through on the downside. This should have been enough to signal the resumption of the down move and target the .8265 February low and then the .8221 January trough, this lack of movement implies further consolidation. We assume that the recent peak at .8423 is an interim peak but key resistance remains 0.8505/24 (the recent high and the 8 month downtrend). While capped here our medium term outlook is bearish.
EasyForexNews Research Team