Cable Puts in Bearish Outside Day After Rallying to Fresh 2009 Highs (Daily Classical

• Euro well offered after stalling ahead of 1.4175
• Dollar/Yen could be putting in double bottom
• Cable forms bearish outside day after posting fresh 2009 highs
• Dollar/Swiss supported as anticipated on dips below 1.0800

EUR/USD

                                               [B]EUR/USD –[/B] Although   the head & shoulders top is taking its time to play out, the overall   structure still looks quite toppish and we anticipate a fresh drop below   1.3750 over the coming days to expose the measured move objective by 1.3250   further down. The latest price action helps to confirm, with rallies stalling   out ahead of 1.4175 on Tuesday, before reversing sharply back towards   Monday’s lows. A break below 1.3980 should accelerate declines. Only back   above 1.4015 gives reason for pause. [B]Strategy: SIDELINED FOR NOW; LOOK TO   SELL.[/B]

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.4270

                                                                       R3

                                                                       6/5 high

                                                                                                                 1.4175

                                                                       R2

                                                                       6/11     high

                                                                                                                 1.4155

                                                                        R1 

                                                                       6/30 high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.3980

                                                                       S1

                                                                       6/29     low

                                                                                                                 1.3890

                                                                       S2

                                                                       6/24     low

                                                                                                                 1.3830

                                                                       S3

                                                                       6/23     low

USD/JPY

                                               [B]USD/JPY –[/B] For now,   it looks like the market is content on trading within a broad range, loosely   defined between 94.00-100.00. The latest setbacks have been very well   supported on dips below 95.00 and Tuesday’s rally could now be setting up the   potential for a double bottom with a break back above the neckline at 96.60   to open a move back towards the upper range, with the 98.00 figure seen as a   measured move objective. Inability to clear 96.60 will however keep the   pressure on the downside and shift the focus on the key 93.55-85 trend lows   from March and May. [B]Strategy: STAND ASIDE; AWAIT CLEARER SIGNAL. [/B]

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 97.10

                                                                       R3

                                                                       6/19     high

                                                                                                                 96.80

                                                                       R2

                                                                       6/17     high

                                                                                                                 96.60

                                                                        R1 

                                                                       6/25     high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 95.60

                                                                       S1

                                                                       6/25     low

                                                                                                                 95.30

                                                                       S2

                                                                       6/30     low

                                                                                                                 94.90

                                                                       S3

                                                                       6/23     low

GBP/USD

                                               [B]GBP/USD   – [/B]Despite the surge to fresh 2009 highs by 1.6745 on   Tuesday we retain our bearish bias. The market has failed to hold onto fresh   gains and has reversed quite sharply to take out the previous daily low. This   now sets up a bearish outside day and exposes a more significant drop over   the coming sessions back towards 1.6185. In the interim, look for any rallies   to be well capped ahead of 1.6600. [B]Strategy: SIDELINED FOR NOW; LOOK TO   SELL.[/B]

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.6745

                                                                       R3

                                                                       6/30     09 high

                                                                                                                 1.6665

                                                                       R2

                                                                       6/3     high

                                                                                                                 1.6620

                                                                        R1 

                                                                       6/11     high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.6425

                                                                       S1

                                                                       6/30     low

                                                                                                                 1.6365

                                                                       S2

                                                                       6/26     low

                                                                                                                 1.6185

                                                                       S3

                                                                       6/18     low

USD/CHF

                                              [B]USD/CHF[/B] – As expected, dips below 1.0800 have been very well supported on   Tuesday with the market reversing course and rallying back towards 1.0900   thus far. The market is in the process of carving a meaningful base and we   look for a fresh higher low by 1.0780 ahead of the next upside extension back   above 1.1025 and towards our 1.1500 medium-term objective. Ultimately, only a   close back below 1.0750 would negate. [B]Strategy: SIDELINED FOR NOW; LOOK TO   BUY.[/B]

         

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.1025

                                                                       R3

                                                                       6/24     high

                                                                                                                 1.0950

                                                                       R2

                                                                       6/26     high

                                                                                                                 1.0915

                                                                        R1 

                                                                       6/29     high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.0780

                                                                       S1

                                                                       6/30     low

                                                                                                                 1.0765

                                                                       S2

                                                                       6/17     low

                                                                                                                 1.0650

                                                                       S3

                                                                       6/11     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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