Euro shows no follow through from Wednesday’s bullish close. Dollar/Yen puts in bearish outside day. Cable trades lower but puts in higher high and higher low. Dollar/Swiss still confined to choppy range trade. Dollar/Cad well supported ahead of 1.2700. Australian Dollar well offered in the 0.6500 area. New Zealand Dollar rolls over to trade back below 0.5000.
[B]EUR/USD
[/B] EUR/USD – The complete lack of follow through from Wednesday’s bullish close has once again put the pressure back on the downside and reaffirms the strength of the bearish trend. Any rallies are seen well capped by the 20-Day SMA (1.2745) which has acted as a formidable ceiling on a close basis for the entire 2009. Look for a near-term break back below 1.2455 (4Mar low) which should accelerate declines towards the key trend lows at 1.2330 (28Oct lows). Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
1.2800
R3
Figure
1.2755
R2
20-Day SMA
1.2680
R1
3/3 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
1.2515
S1
2/27 low
1.2455
S2
3/4 low
1.2420
S3
11/21 low
[B]USD/JPY
[/B] USD/JPY – Gains have once again stalled out ahead of the 100.00 barriers and 200-Day SMA at 100.10 on Thursday with the market reversing course and putting in a bearish outside day. With the daily RSI just now starting to show sings of rolling back over, we like the idea of looking to sell into Friday in anticipation of a much needed and healthy short-term pullback potentially back to as far as the former neckline resistance now turned support at 94.60 (6Jan high). Only back above 99.70 negates. Strategy: SELL@ 98.00 FOR A 94.60 OBJECTIVE, STOP 99.80. Stops to be trailed to cost on a break below 97.00.
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
100.10
R3
200-Day SMA
100.00
R2
Psychological
99.70
R1
3/5 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
98.05
S1
3/5 low
96.85
S2
2/27 low
96.35
S3
2/25 low
[B]GBP/USD
[/B] GBP/USD – The bullish outside day from Wednesday has shown limited follow through thus far with the market tracking lower on the day despite a daily higher high and higher low. Prospects for a shorter-term corrective rally are now fading with a break back above 1.4235 (Thursday high) now required to reintroduce any constructive potential. The overall structure is however grossly bearish with the market trading in a very well defined bear channel and poised for additional declines back below the 1.3500 2009 and multi-year lows. Key levels to watch over the coming session come in by 1.4235 and 1.3960. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
1.4455
R3
50-Day SMA
1.4315
R2
3/2 high
1.4235
R1
3/5 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
1.3960
S1
3/2 low
1.3930
S2
1/27 low
1.3825
S3
78.6% Fib
[B]USD/CHF
[/B] USD/CHF – Remains locked in a choppy multi-day sideways consolidation with price action largely confined to the 1.1465-1.1890 area. The overall structure however remains bullish and we expect dips to continue to be well supported ahead of an eventual break to challenge the key 2008 highs at 1.2300. Back above 1.1890 should accelerate gains and open fresh upside, while only below 1.1465 delays. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
1.1890
R3
2/20 high
1.1850
R2
3/4 high
1.1810
R1
3/5 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
1.1635
S1
3/2 low
1.1595
S2
2/26 lows
1.1550
S3
2/25 low
[B]USD/CAD
[/B] USD/CAD – Setbacks on Thursday have been well supported ahead of 1.2700 and the bull move post the major triangle break remains firmly intact. Initially, a challenge and break above the 2008 highs at 1.3020 (28Oct high) is to be expected over the coming days with an eventual push back towards a measured move objective of 1.4000 over the coming weeks/months. In the interim, we will stay on the sidelines and look for opportunities to buy back into the trend. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
1.3020
R3
10/28 Trend High
1.3000
R2
Psychological
1.2975
R1
3/3 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
1.2715
S1
3/4 low
1.2675
S2
2/17 high
1.2525
S3
20-Day SMA
[B]AUD/USD
[/B] AUD/USD – A sharp pullback on Thursday negates any positive price action on Tuesday and Wednesday with the market trading back with a heavy tone and adhering to the primary downtrend. Only a break back above 0.6555 would take the pressure off of the downside at this point and we look for a move back towards the recent range lows by 0.6285 into Friday. Nevertheless, trade remains extremely choppy and establishing any form of a position is not recommended. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
0.6645
R3
2/13 high
0.6555
R2
2/25 high
0.6510
R1
3/4 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
0.6340
S1
2/27 low
0.6285
S2
3/3 low
0.6250
S3
2/2 low
[B]NZD/USD
[/B] NZD/USD – The overriding bear trend remains intact with any rebounds showing little to no follow through. The market has failed to extend gains after Wednesday’s strong bullish outside day to once again put the focus back on the downside, exposing a retest and break of the multi-year trend lows from Wednesday at 1.4895. Below 1.4895 opens a more significant drop back towards the August 2002 lows in the 0.4500 area. Only back above 0.5195 delays. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
0.5195
R3
2/25 high
0.5130
R2
2/26 high
0.5090
R1
2/27 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
0.4895
S1
3/4 Trend Low
0.4820
S2
Major 78.6% Fib
0.4485
S3
Aug 2002 low
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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Monday-Friday (between 8:00am-9:00am EST)
“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
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