EUR/USD has held the initial test of the 61.8% retracement of the move seen this year so far at 1.2954 and has seen a small rebound. While we would allow for the rally to fill the weekend gap to 1.3081. it should remain shallow and the risk will remain on the downside. A move below 1.2954 is expected to trigger another leg lower. Our target remains the 1.2624 January low and Interim support is 1.2809, the 78.6% retracement. Short term resistance lies at 1.3081/1.3180. Key resistance are the downtrends at 1.3247/59.
GBP/USD inched lower yesterday and remains downside corrective very near term. There is scope for a deeper retracement to 1.6050, the 23.6% retracement of the move seen this year (and the 50% retracement of the move up from mid April) and possibly 1.5954, the 4 month uptrend. While above here the market remains on course to challenge to 1.6425/the 78.6% retracement of the move down from the 2011 peak. We have minor resistance ahead of here – a one year resistance line at 1.6336. Key support is the 1.5821/05 double Fibonacci retracement and the April low.
AUD/USD is consolidating at 1.0122, the 61.8% retracement of the move up from October. While this has prompted a small rebound we look for this to remain tepid. Our outlook remains negative and we look for losses to .9950/19, a double Fibonacci retracement. Technical indicators remain negative. Yesterdays rally filled the time zone gap back to 1.0181. Rallies should find resistance now by 1.0248/93, the 50% retracement of the last leg down and the April low.
USD/JPY chart remains is dominated by the 80.74 resistance line. We would currently allow for further slippage to 79.15/78.90 (61.8% retracement and the 55 week ma), where we would expect the market to stabilise and recover. Only a break above the 80.74 resistance line would signal the end of this corrective phase and allow for gains to the 82.53 cloud resistance and 83.31/39 then the 84.19 recent high. The top of the daily cloud is likely to act as resistance en route.
USD/CHF consolidated yesterday following its break of the .9176 resistance line. We have a time zone gap to .9184 and the market has eased lower to mostly fill this gap and we now look for the market to recover. Slightly longer term, we view the price action this year as a consolidation, in an overall bull trend. The move above .9184 adds weight to the idea that the bull trend had resumed. Initial upside target is .9317/42, the March peak, pivot and 61.8% retracement of the move seen this year. A close above here will target .9595, this years high.
EUR/JPY sold off to a low of 103.24 yesterday and then rebounded to close near term days high. While this implies a rebound – we remain unable to rule out further losses to 102.54, the 61.8% retracement of the move seen this year and possibly 100.12/00. The market will find the previous low at 104.625 will offer immediate resistance ahead of the 105.17 base of the cloud – key resistance is the downtrend at 106.14, while capped here the market will remain directly offered.
EUR/GBP has sold off towards and rebounded from trendline support extending back to 2007 at .8027 (see weekly chart on the next slide) and we are not surprised to see some profit taking here. Rallies should find initial resistance at .8096 (time zone gap) ahead of the .8156 resistance line. Key resistance remains.8221, the January low. Below .8027 will target .7795 longer term. This is the 61.8% retracement of the move 2007-2008.
EasyForexNews Research Team