Classical Technical Outlook for August (Daily Classical)

• Euro gains seen towards 1.5000 over the coming weeks
• Dollar/Yen still locked in well defined downtrend
• Cable consolidations comes to an end; fresh upside towards 1.7500
• Dollar/Swiss considers retreat back towards parity

WE CONTRIBUTED TO A “MONTHLY OUTLOOK” PIECE EARLIER TODAY AND HAVE DECIDED TO INCORPORATE THE OVERVIEW ANALYSIS INTO OUR DAILY CLASSICAL FOR TUESDAY.

EUR/USD

EUR/USD – A period of multi-week consolidation has now been broken to the topside with the market extending gains to fresh 2009 highs beyond 1.4340. The break above 1.4340 confirms a medium-term higher low in place by 1.3750 and opens the next upside extension back towards a measured move objective into the 1.4900’s over the coming weeks. Back under 1.4205 would now be required at a minimum to relieve topside pressure and potentially negated bullish outlook.

USD/JPY



USD/JPY
– Remains locked in a fairly intense downtrend and is currently in the process of attempting to carve out a fresh lower top below 110.70 (August 2008 high) by the 2009 highs from April at 101.45, ahead of the next downside extension below the historic trend lows from a few months back set at 87.15. The key level to watch below comes in by 91.75, with a break to accelerate declines and directly expose 87.15 further down. Back above falling trend-line resistance in the 98.00’s would however delay the bearish structure, while above 101.45 ultimately negates.

GBP/USD

GBP/USD – The recent break to 2009 highs beyond 1.6745 keeps the constructive and bullish trend intact with a medium-term higher lower now confirmed by 1.5980. A fresh upside extension is now underway with the market projecting a move back towards the 1.7500 area before and sign of a top. Setbacks should now be supported ahead of 1.6700, with only a break below to compromise the structure and outlook.

USD/CHF

USD/CHF – A multi-week consolidation has been broken to the downside, with the market recently breaking to fresh 2009 lows below 1.0590. This is suggestive of some bearish continuation and now opens the door for a drop towards parity over the coming weeks. Next support comes in by 1.0370 and a break back above 1.1025 will now be required to take pressure off of the downside and shift structure.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Joel Kruger publishes 6 daily pieces:

“Tech Talk”A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)

“Morning Slices”
Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)

“Indicator of the Day”A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)

“Midday Snapshot”A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
Monday-Friday (between 10:30am-11:30am EST)

“Scandi Daily” A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)

“Daily Classical”A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)