EUR/USD continues to trade below the 61.8% retracement of the move seen this year and remains under pressure. Corrective rebounds should remain tepid – daily technical indicators remain negative and our target remains the 1.2624 January low. Interim support is 1.2809, the 78.6% retracement. Resistance above 1.3081 is prolific and the 5 and 8 month downtrends at 1.3226/45 offer tough resistance for the market. The market has been broadly contained within the 1.3500-1.2950 limits for 4 months and this range is now expected to act as pretty solid resistance.
GBP/USD has sold off to and recovered just ahead of its initial support at 1.6050, the 23.6% retracement of the move seen this year (and the 50% retracement of the move up from mid April). While we would allow for gains today, we are sceptical about the markets ability to resume its upmove – but for now – while above 1.5990, the 4 month uptrend, we will give the upside the benefit of the doubt. While above here the market remains on course to challenge 1.6328one year resistance line a and then 1.6425/the 78.6% retracement of the move down from the 2011 peak. Key support is the 1.5821/1.5768 Fibonacci retracement and the April low.
AUD/USD has seen a strong rebound from the base of the short term channel at approximately 1.000 today. This is also psychological support and we would allow for profit taking. Rallies should find resistance at 1.0122 ahead of 1.0200/28, the 23.6% retracement of the move down from February and the April low. Key resistance is the top of the channel at 1.0386. Beyond a rebound, our outlook remains negative and we look for losses to .9950/19, a double Fibonacci retracement. Our long term target is for a slide back to .9407/.9388, this is the 2011 low and the 2009 and April 2010 highs.
USD/JPY has charted a low of 79.42 and this has not been confirmed by the RSI (we have a complex divergence) We suspect that the market is attempting to recover, but to confirm upside intent we will need a break above the 80.45 resistance line. At this stage we remain unable to rule out 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. A break above 80.45 would signal the end of this corrective phase and allow for gains to the 82.42 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 spent one day holding sideways and looks ready to resume its upmove already. The market has taken out the April high is well placed for further gains. 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 charted an inside day yesterday. The market has recently sold off to 102.54, the 61.8% retracement of the move seen this year and is consolidating near term. Rebounds while capped by the 104.625 (April low) will have very little impact. Failure at 102.50 would introduce scope to 100.12/00, where we would expect the market to attempt to base. The market will find the previous low at 104.625 will offer immediate resistance ahead of the 105.34 base of the cloud – key resistance is the downtrend at 105.56, while capped here the market will remain directly offered.
EUR/GBP has traded through trendline support extending back to 2007 at .8027 (see weekly chart on the next slide) however the market is finding some support at .8000 and we would allow for a small rebound from here. Rallies should find initial resistance at .8096 (time zone gap) ahead of the .8131 resistance line. Key resistance remains.8221, the January low. Below .8000/.7995 will target .7795 longer term. This is the 61.8% retracement of the move 2007-2008.
EasyForexNews Research Team