EUR/USD has now hit our upside target at 1.2625, the January low. This has stalled the currency pair. A minor retracement back towards the 1.2500/1.2450 area should now be seen before the current retracement higher continues. Should this not be the case, the 38.2% Fibonacci retracement at 1.2668 and then the 50% retracement at 1.2786 and the 21st of May high at 1.2825 could also be hit before another, sharp down leg towards the 1.20 region is being seen For now unexpected failure at last week’s low at 1.2288 would have the 200 month moving average at 1.2058 and the psychological 1.2000 mark in focus.
On Thursday GBP/USD briefly shot up to 1.5600, right to the March low which acted as resistance. As long as this caps, a retracement back towards the 78.6% Fibonacci retracement at 1.5463 but not the next lower 1.5400 area should be seen this week. While trading above Tuesday’s 1.5323 low, the short term outlook will remain bullish, though, with the 38.2% Fibonacci retracement of the April-to- June decline at 1.5664 being eyed in case of an advance above 1.5600. Another upside target is the 1.5764/1.5786 area where the 200 day moving average and the 50% retracement come together.
AUD/USD recovery has taken it to 1.0003 on Thursday. It comes as no surprise that it stalled around parity, though. We now expect to see a minor retracement back towards the .9795 18th of May low unfold before another attempt at breaking above parity is being made. If successfully overcome, the 1.0046 late December low will be targeted and probably also the 1.0146 January low and the 55 day moving average at 1.0138. Further support is coming in at the .9690 23rd of May low.
USD/JPY has now left its three month downtrend channel at 79.01 and surpassed the 79.64 1st of May low but did not quite reach the psychological 80.00 mark before coming off again. A minor drop back towards the 79.00 mid-May low and perhaps also the 200 day moving average at 78.69 should now be seen before another up leg towards the 55 day moving average at 80.48 and the 80.61 May is expected to ensue. Only an unexpected drop through Monday’s 77.99 inside day low will have last week’s low at 77.65 back in play. Failure here will eye the 77.36 mid-February low point.
USD/CHF has so far dropped into the .9529/00 support area (28th of May low and the 18th of May high) where it stabilised Thursday. From here a small bounce is being seen as expected with the .9595 January high and the .9612 25th of May high being eyed. Next up is Tuesday’s high at .9653. From here another leg lower towards the 38.2% Fibonacci retracement of the February-to-June rise at .9451 and perhaps the .9368/35 support area should then be made. This is where the 21st of May low, 50% retracement and the March peak all come in. Should Tuesday’s high at .9653 unexpectedly be bettered, a rise back towards the .9700 region could also be seen. We do not believe at present, however, that this will be the case. Significant resistance at .9772/84 (last week’s high, January and February 2011 highs) is not expected to be revisited before late June.
EUR/JPY bounce has taken it to 100.63 on Thursday. From here a minor retracement back to the 99.25 February low should be seen. Support below it is found at 98.90, the 23rd of January low. Once a minor retracement lower has ended, expect to see the two month resistance line at 101.72 being tested and surpassed with the 102.13 22nd May high then being back in focus.
EUR/GBP has again gotten close to but not quite reached the 55 day moving average and four month resistance line at .8144/47 on Thursday before beginning to slip again. The .8051 low seen on Wednesday is thus back in the frame. Below it lie the psychological .8000 region and the May trough at .7950 only beyond which we look for another down leg towards the 2011-12 downtrend channel support line at .7913 to be made. Still further down lies the 61.8% Fibonacci retracement of 2007-08 rise at .7788. Within the next few days the .8000 region is expected to underpin, though.
EasyForexNews Research Team