EUR/USD will shortly encounter the top of the 7 month channel at 1.3457. this together with the February high at 1.3487 should provoke failure. Initial support is 1.3291, then 1.3237 (near term uptrend) and we suspect will have to fall below this latter level to alleviate immediate upside pressure. Failure here should be enough to refocus attention onto the 1.3004 recent low and then 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 1.3602.
GBP/USD has tested the 1.5992 recent high and psychological resistance at 1.6000 but has not managed to sustain a break above here. Directly overhead lies the 200 week ma at 1.6014 (the market has not traded above here since 2008). This is tough resistance for the market – it should provoke failure and we note that the daily RSI has yet to confirm the recent high. The market will stay bid intraday above the 1.5850 support line 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.
AUD/USD saw a very minor breach of its short term down channel – but has not managed to clear it and maintains a negative bias (we have re-drawn it). 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 1.0603/1.0637 (55 day ma and last weeks high) and 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 sold off to the .9019 4 month support line. This will need to hold and provoke recovery above .9066 at the very minimum to alleviate immediate downside pressure. While capped by the .9066 pivot risk will remain on the downside and failure here would target the .8931 February low. Slow Stochatics have turned higher on the 240 minute chart and we should at least see some consolidation today. A move above the 20 day ma at .9178 would allow attention to re-focus on resistance at .9317/42.
USD/JPY continues to rebound off the 6 week uptrend at 82.18 and while this holds a bullish bias will be maintained. Near term while this is intact, the market will maintain a bid tone and we would look for it to tackle interim resistance offered by the 83.59 cloud on the 240 minute chart. This is seen as the barrier to the recent highs at 84.10/19. Only below 81.95 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/JPY continues to rebound from its 20 day ma at 108.97, directly overhead the market does face tough overhead resistance offered by the 111.57 Intervention high and as a consequence we are unable to rule out initial failure here and a slide back towards the 2 month uptrend at 106.63, prior to the next sustained leg higher. Note that the daily RSI is starting to turn lower, we suspect that the market lacks the impetus to break this resistance at this stage. We also note the 13 count on the TD Combo and the TD perfection set-up which implies there is a risk of failure here. 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, we would expect this to hold the initial test.
EUR/GBP continues to chart tight ranges and on the 240 minute chart appears to have completed an ‘a-b-c’ correction higher. We should see the market fail and come under downside pressure today. Outlook is relatively neutral, however while capped by .8417/23 (March high and 5 month resistance line), we will maintain a downside bias. 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.
EasyForexNews Research Team