• Euro exceeds 70 on daily RSI; poised for needed pullback
• Dollar/Yen reverses sharply to almost fully negate Friday’s price action
• Cable gains unrelenting as the market approaches 1.6500; RSI above 80
• Dollar/Swiss setbacks stall just shy of 2009 lows
[B]EUR/USD –[/B] Could finally be showing signs of a top with the daily RSI crossing above 70 and the market reaching the 78.6% fib retracement off of the major 1.4720-1.2455 move at 1.4235. A daily close near or below 1.4160 would provide added confirmation and we would look to build shorts at current levels in anticipation of a major pullback. [B]Strategy: SELL @1.4145 FOR A 1.3930 OBJECTIVE, STOP 1.4260. [/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 1.4435 R3 12/17 high 1.4365 R2 12/29 high 1.4250 R1 6/1 09 high [B]Level[/B] [B]Support[/B] [B]Details[/B] 1.4100 S1 6/1 low 1.3940 S2 10-Day SMA 1.3925 S3 5/29 low
[B]USD/JPY –[/B] The market has 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 bearish price action has been nearly negated on Monday to suggest that an interim base is in place by 93.85 ahead of fresh upside beyond 97.25. Only back under 94.45 shifts focus back to downside. [B]Strategy: SIDELINED; AWAIT CLEARER SIGNAL.[/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 98.30 R3 5/8 low 97.85 R2 5/12 high 97.25 R1 5/28 high [B]Level[/B] [B]Support[/B] [B]Details[/B] 95.55 S1 5/27 high 95.00 S2 5/29 low 94.45 S3 6/1 low
[B]GBP/USD – [/B]We have been looking for opportunities to be short of this pair as well, and have established a fresh short on Monday after gains showed signs of stalling above 1.6400. Shorter-term, hourly studies are overbought and the daily ATR (Average True Range) has already been well exceeded on the day, to make the counter-trend short position very attractive on an intraday basis. Longer-term, the market has now retraced to the 38.2% fib retrace off of the major multi-year high-lows and we would expect to see some form of capitulation at current levels in light of the major retracement level. Finally, the daily RSI has broken above the 80 level which is now severely overbought and warning of a much needed and healthy corrective pullback. We have left our objective open and will be looking for an RSI move back towards 70 (currently 81) over the coming days. [B]Position: SHORT @1.6407 FOR AN OPEN OBJECTIVE, STOP @1.6687. [/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 1.6675 R3 10/30 high 1.6600 R2 Figure 1.6500 R1 Psychological [B]Level[/B] [B]Support[/B] [B]Details[/B] 1.6300 S1 Figure 1.6200 S2 5/29 high 1.6160 S3 6/1 low
[B]USD/CHF[/B] – After finally trading down to 30 on the daily RSI, the market could be looking for a much needed and healthy corrective rally. Setbacks on Monday stalled out just shy of the 2009 lows by 1.0610 and the market has since recovered back to daily opening levels by 1.0670 to potentially set up a doji close. Look for a break back above 1.0725 to accelerate gains and confirm short-term basing, while below 1.0610 opens deeper setbacks towards next key support by 1.0370, the late December lows. [B]Strategy: SIDELINED; AWAIT CLEARER SIGNAL.[/B] [B]Level[/B] [B]Resistance[/B] [B]Details[/B] 1.0860 R3 5/29 high 1.0805 R2 5/28 low 1.0725 R1 6/1 high [B]Level[/B] [B]Support[/B] [B]Details[/B] 1.0620 S1 6/1 low 1.0610 S2 1/2 09 low 1.0485 S3 12/30 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 firstname.lastname@example.org and you will be added to the “distribution” list.
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