Cable Ignores Overbought Readings and Ascends to Fresh 2009 Highs (Daily Classical)

• Euro reverse sharply intraday; short triggers at 1.3965
• Dollar/Yen stuck in tight inside day range
• Cable eyes test of psychological barriers at 1.6000
• Dollar/Swiss rallies fail to sustain; threatens hopes for recovery


[B]

EUR/USD
[/B]

                                              [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’s jackknife reversal   off of the 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. Back above   1.4050-60 negates and exposes the 1.4100-50 area. [B]Position: SHORT @1.3965   FOR A 1.3740 OBJECTIVE, STOP 1.4065.  Stops   to be trailed to cost on a break back below 1.3915. If 1.3915 not broken,   position to be closed out at NY close (5pm NY time) on Tuesday. [/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

                                                                                                                 1.3760

                                                                       S3

                                                                       10-Day     SMA


USD/JPY

                                              [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 was followed   by some upside on Monday to break a sequence of consecutive daily lower highs   and lower lows. This 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

                                                                                                                 95.25

                                                                        R1 

                                                                       5/25     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]

                                              [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 1.6000. 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 towards 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: SIDELINED;   AWAIT CLEARER SIGNAL.[/B]

         

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.6110

                                                                       R3

                                                                       11/4     high

                                                                                                                 1.6030

                                                                       R2

                                                                       11/6     high

                                                                                                                 1.5970

                                                                        R1 

                                                                       5/26     09 high

                                                                                                                 [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]

                                              [B]USD/CHF[/B] – Has been unable to hold onto the substantial gains from Tuesday with   the market sharply reversing back towards daily opening levels in the lower   1.0800’s. This keeps the bearish trend intact with only a break back above   1.0930 to now negate and open a more significant corrective rebound. A break   below 1.0800 exposes the 2009 lows from early January at 1.0610. [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 jskruger@fxcm.com and you will be added to the “distribution” list.

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