• Euro setbacks continue to be very well supported
• Dollar/Yen locked in choppy consolidation trade
• Cable easily exceeds key psychological barriers; ignores overbought readings
• Dollar/Swiss rallies one again well capped ahead of 1.0930
[B]EUR/USD –[/B] With the daily RSI rolling over from overbought, the risks from here are for a material pullback over the coming days. However, Tuesday and Wednesday’s jackknife reversals off of the respective daily lows is concerning and we will need to see a break back below 1.3860 to get things once again moving back to the downside. Above 1.4050-60 delays and exposes the 1.4100-50 area. [B]Strategy: SIDELINED; AWAIT CLEARER SIGNAL.[/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 1.4150 R3 12/31 high 1.4060 R2 1/2 09 high 1.4050 R1 5/22 high [B]Level[/B] [B]Support[/B] [B]Details[/B] 1.3900 S1 Figure 1.3860 S2 5/26 low 1.3795 S3 10-Day SMA
[B]USD/JPY –[/B] The market had been well offered over the past several weeks but setbacks have now stalled out just shy of next key support by 93.55 from March, which guards against the critical 87.15 multi-year trend lows. Friday’s bullish close has been followed by some constructive consolidation this week which could now suggest that an interim base is in place by 93.85 ahead of a bounce back towards 96.70 over the coming days. Below 93.85 negates. [B]Strategy: SIDELINED; AWAIT CLEARER SIGNAL.[/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 96.70 R3 5/19 high 96.25 R2 5/20 high 95.55 R1 5/27 high [B]Level[/B] [B]Support[/B] [B]Details[/B] 94.40 S1 5/25 low 93.85 S2 5/22 low 93.55 S3 3/19 low
[B]GBP/USD – [/B]Any pullbacks intraday have been met with some very strong buying and the market continues to ignore daily overbought readings in favor of a retest on critical psychological barriers by 1.6100. Tuesday’s price action initially looked quite bearish after breaking down to take out the previous daily low and end a sequence of 5 consecutive daily higher lows. However, the sharp rebound into the afternoon quickly dashed any hopes for a more significant retreat in favor of a push to fresh 2009 highs easily exceeding 1.6000. While we do anticipate a major pullback over the coming days, recent price action suggests that the time has not yet come for said correction. [B]Strategy: SELL @1.6120 FOR A 1.5520 OBJECTIVE, STOP @1.6270. [/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 1.6200 R3 11/5 high 1.6110 R2 11/4 high 1.6100 R1 Figure [B]Level[/B] [B]Support[/B] [B]Details[/B] 1.5780 S1 5/26 low 1.5755 S2 5/22 low 1.5700 S3 Figure
[B]USD/CHF[/B] – Any hopes for a recovery on Tuesday were delayed with the sharp pullback into the afternoon back to daily opening levels. The market has since been chopping around, considering its next move. A break below 1.0800 will open the door for bearish resumption exposing the 2009 lows at 1.0610, while back above 1.0930 would suggest that an interim base is in place, favoring a more significant corrective rally. [B]Strategy: SIDELINED; AWAIT CLEARER SIGNAL.[/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 1.1130 R3 5/20 high 1.1055 R2 5/21 high 1.0930 R1 5/26 high [B]Level[/B] [B]Support[/B] [B]Details[/B] 1.0810 S1 5/22 low 1.0715 S2 78.6% fib 1.0610 S3 1/2 09 low
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com. If you wish to receive Joel’s reports in a more timely fashion, e-mail email@example.com and you will be added to the “distribution” list.
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