EUR/USD has failed at 1.3245/50, the 38.2% retracement of the move down from November. It has eroded its short term uptrend and we regard this as negative price action – it suggests the correction is over and the market has resumed its downmove. The market will remain directly offered intraday while capped by 1.3115, and a negative outlook is maintained below 1.3250. Initial target is the 1.2904/1.2854 zone – the 20 day ma and then 1.2530/88, the August 2010 low and the 78.6% retracement of the move from 2010 -2011. We view near term strength as corrective only and our longer term bias is bearish – our longer term target is 1.2083/the 200 month ma.
GBP/USD has reached the 1.5770/80 November and December highs, and the 61.8% retracement of the move down from the October peak at 1.5810. This is tough short term resistance and we are alert to the idea of failure here, this has been the scene of several failures over the past couple of months. This should trigger a slide back to 1.5515 (the 50% of the last leg higher. In order to alleviate extreme upside pressure – a slide back below 1.5664 is needed. Above 1.5810 would introduce scope to the 200 day ma at 1.5960.
USD/CHF has recovered just ahead of 0.9080/66, the November low and the 50% retracement of the move up from October. The significant divergence of intraday oscillators gave us an early warning us of a move higher and having eroded the short term downtrend, we will assume that the move lower is over and the market ready to resume its upmove. The break above the downtrend allows for recovery to the .9340/45 then .9595 recent high. Dips will find interim support at .9144 (previous downtrend) ahead of .9112, the recent low and then key support remains .9080/66.
USD/JPY has sold off through BUT not closed below the Fibonacci retracement at 76.20. While this holds on a closing basis scope for recovery remains. Support at 76.20/14 is regarded as the last defense for the 75.31 low and potentially 75.00/74.90. The market is on the defensive near term and in need of consolidation, our longer term bias is positive, the market has recently eroded the 4 year downtrend. Above 77.24/29 targets the 55 week ma at 79.49. This together with the 80.00/25 pivot is extremely tough resistance and is expected to take several attempts to break.
AUD/USD is showing signs of failure ahead of the 1.0750/65 highs seen in September and October, these are expected to hold and provoke failure. We look for the upside to remain relatively limited, however need a break below the 1.0315 2 month uptrend to alleviate upside pressure. Initial support is found at 1.0442, a near term uptrend and the 200 day ma at 1.0407. Below the 2 month uptrend at 1.0315 will alleviate upside pressure and initiate a move lower. This would then target 1.0046/00 en route to .9818 and .9664/80.
EUR/JPY has remained under pressure following the erosion of its near term uptrend. This coupled with last weeks failure ahead of the 102.55/60 resistance implies the market has topped short term. Interim support lies at 99.00/98.90 (23rd January low and 61.8% retracement)) is exposed. Failure here will refocus attention on to the 97.04 January low. Our slightly longer term targets are nearer to 95.00. Above 102.60 would negate this view for recovery to 104.30, the 50% retracement of the move down from October.
EUR/GBP has eroded its one month uptrend. We have been looking for failure at the 0.8421 end of December high, and the 55 day ma at .8418 and this has now been seen – we believe the market has resumed its down move . Please note that we regard this recent rally as a ‘return to point of break down’ from its previous uptrend (this offers resistance at .8418 (see weekly chart on next slide) – this is bearish price action. We have minor support at 0.8288, the low from 23rd January and look for losses to extend to the 0.8221 January low and longer term the .8067/2010 low. Rallies will find intraday resistance at 0.8335 and remain directly offered below .8417/22.
EasyForexNews Research Team