EUR/USD has eroded interim resistance at the 1.3291/1.3325 region (9th February high), and we would allow for an extension of the rally towards the top of the 7 month channel at 1.3463. this together with the February high at 1.3487 should provoke failure. Initial support is 1.3291, 1.3192. The market remains bid intraday above 1.3133 and key near term support remains 1.2974/54, the February low. A break below here will be needed to trigger the slide to the 1.2624 January low. We continue to view the 1.3487 recent high as an interim ceiling for the market. Above would allow for an extension to the 200 day ma at 1.3613.
GBP/USD rallied strongly higher yesterday and looks set to retest the 1.5992 recent high, where the rally should fail. We also note that the 200 week ma lies at 1.6014 and the market has not traded above here since 2008. The market will stay bid intraday above 1.5825 and only below here will upside pressure alleviate and attention revert to underlying support at 1.5643/1.5599. Prices will need to close below 1.5643 to trigger another leg lower. Above 1.6014 will target the 1.6167 October 2011 high.
AUD/USD rallied higher yesterday towards the top of its short term down channel, which today is located at 1.0525/35. Ideally we would like to see this provoke failure and a slide towards 1.0260, the 50% retracement of the move up from November 2011. The market faces tough overhead resistance at 1.0602/1.0637 (55 day ma and last weeks high). We continue to view 1.0857 as an interim peak. Beyond 1.0260 we look for losses to 1.0120 then 1.00.
USD/CHF has eroded key short term support at .9066 (the November 2011 low) and the erosion of this support leaves the market on the defensive. The market remains offered intraday below the 20 day ma at .9186 and is capable of extending weakness to the .9015 4 month support line. Failure here would target the .8931 February low. A move above the 20 day ma would allow attention to re-focus on resistance at .9317/42 (recent high, October 2011 high and the 61.8% retracement – of the move down seen this year).
USD/JPY has managed to rebound off the 6 week uptrend at 82.02 and is attempting to reassert its bull move. Near term while this is intact, the market will maintain a bid tone and we would look for the market to tackle interim resistance offered by the 83.56 cloud on the 240 minute chart. This is seen as the barrier to the recent highs at 84.10/19. Only below 82.00 will leave the market vulnerable to a deeper correction to 81.09 and possibly 80.13, where we would expect price to once again stabilise. Targets remain 85.53, April 2011 high and then 86.80 the 23.6% retracement of the move down from the 2007 peak.
EUR/GBP sidelined but inching higher. Outlook is relatively neutral, however while capped by .8423, a slight downside bias exists to target the .8265 February low and then the .8221 January trough, however there is little to indicate this happening currently. 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.
EUR/JPY rallied from its 20 day ma at 108.85, and cleared 110.05 – this has alleviated the negative impact of last weeks key day reversal. However the market does face tough overhead resistance offered by the 111.57 Intervention high and as a consequence we are unable to rule out further weakness this week back towards the 2 month uptrend at 106.44. We would expect to see the market attempt to stabilise between here and the 105.65 March low. Note that we consider KEY support to be 102.55/101.79, the 14th February low. Above 111.57 would target the 113.29 61.8% retracement of the move down from the 2011 peak. Directly above here lies the 113.35 2009-2012 resistance line.
EasyForexNews Research Team