EUR/USD has charted a key day reversal just ahead of the the 1.2624 January low. The rally has already met the 23.6% retracement at 1.2793, looking for this to extend to 1.2887 then 1.2963, there is scope for 1.3038 (61.8% retracement+ early February and early April lows ) but we would expect the market to struggle here. Dips lower will find support at 1.2750 ahead of 1.2642/24. Failure at 1.2624 will trigger losses initially to 1.2530, the 78.6% retracement of the move 2010-2011 – this is the last defence for 1.2066, the 55 MONTH ma. Current trade: Short 1.2785, lower stops from 1.2915 to 1.2815 and exit 1.2750. We would like to exit short position, given the key day reversal.
GBP/USD basically consolidated on Friday at the 1.5825/1.5768 region. This is the 200 day ma and the 50% retracement of the move seen this year. We are likely to see some further consolidation around here, but would treat a close below 1.5768 as the trigger for a slide to the 1.5599 March low. Rallies will find interim resistance at 1.5867/1.5950 and should remain contained by the 1.6020 region.
AUD/USD has spiked below the December low at .9863 into new 6 month lows. The move lower is very accelerated and we can see the divergences on several indicators on the 240 minute chart, which together with the 13 count on the Tom de Mark TD Combo on the daily chart implies that we will see some near term consolidation. We look for rallies to find interim resistance at 0.9955 ahead of 1.0055. These are the 23.6% and 38.2% retracement of the last leg lower. Our target remains for a slide back to .9407/.9388. This is where the 2011 low and the 2009 and April 2010 highs can be found.
USD/JPY last week sold off to the 61.8% retracement support at 79.15 (of the move seen this year). Last weeks price action was an outside week to the downside and as a consequence we would allow for further losses. We note that the daily RSI has not confirmed this break to a new low. However the market is struggling to make any gains. We have redrawn the channel and this offers resistance at 80.30 – while capped here we will assume the risk remains for losses to the 200 day ma at 78.52 and possibly to 77.79 – the 78.6% retracement of the same move.
USD/CHF has charted a key day reversal and is attempting to erode the accelerated uptrend at .9380 today. As a consequence we would like to exit longs as the risk is now high that a correction lower will ensue. We would allow for a correction back to .9335/25 (March high and the 38.2% retracement) and then to .9271/.9252. Beyond this we should see a recovery and a challenge to the January peak at .9595. The 2008 low at .9572 is also found here and we expect this to hold the initial test. We consider the region as pivotal longer term.
EUR/JPY has sold off towards the 78.6% Fibonacci retracement at 100.12. We would allow for some profit taking here/corrective rebound near term. Minor resistance is found at 101.79 – the mid February low ahead of last week’s low at 102.76. Trendline resistance lies at 104.40. While below here, immediate downside pressure should be maintained. Below 100.12 would target 99.25 the February low, which is regarded as the last defense for the January low at 97.04.
EUR/GBP last week the market sold off to and saw a reversal from the .7950 low. The market is correcting higher near term. Rallies should find initial resistance at the .8096 (time zone gap left from a couple of weeks ago). Key resistance remains at .8221, the January low. While below here, the medium term outlook will stay bearish. Dips lower will find minor support at .8020 ahead of .7950. Below .7950 we look for another down leg towards the 61.8% Fibonacci retracement of the move in 2007-2008 at .7795.
EasyForexNews Research Team