• 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
EUR/USD
[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 [email protected] and you will be added to the “distribution” list.
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