Euro Inches Closer to 2009 Highs (Daily Classical)

•Euro continues ascends towards yearly highs
•Dollar/Yen takes out recent trend highs to open push into 95.00’s
•Cable well bid but still trades in familiar range
•Dollar/Swiss higher on day despite relative currency gains


EUR/USD – Inching even closer towards the 1.4340, 2009 highs, with the market taking out Tuesday’s 1.4280 high to open an assault on figure resistance by 1.4300 which guards against 1.4340. There is a strong probability that 1.4340 will now be retested and taken out, with a close above this level to warn of the next medium-term upside extension into the 1.4500-1.4700 area. However, inability to establish above 1.4340 followed by a break back below 1.4155 will be viewed as bearish and once again put the pressure back on the downside. We remain sidelined until a clearer opportunity presents. STRATEGY: SIDELINED FOR NOW; AWAIT CLEARER SIGNAL


USD/JPY – Remains locked in a downtrend off of the yearly highs by 101.45 and a lower top is now sought out below 97.00, ahead of the next drop. We had thought that the 94.80 level could act as the next lower top, but with this level now taken out, additional upside is now seen back into the 95.00’s. The internal trend-line in the chart above shows the next potential lower top now coming in by 95.65. Only back above 97.00 will ultimately force a shift in our outlook. STRATEGY: STAND ASIDE; LOOK TO SELL


GBP/USD –Despite the recent rally back into the 1.6500’s we do not rule out the potential for a failure ahead of 1.6745 as we still hang on to the possibility for the formation of the right shoulder of a very loose and messy head & shoulders top. However, a sharp pullback will need to take place over the coming days for this topping scenario to play out and we look for Thursday’s bullish price action to be no more than some additional consolidation ahead of the anticipated downside break. STRATEGY: SIDELINED FOR NOW; AWAIT CLEARER SIGNAL


USD/CHF – In the process of attempting to carve out a meaningful medium to longer-term base by 1.0590. However a period of choppy consolidation still needs to be convincingly broken to the topside to confirm basing prospects and open a recovery extension back towards the 1.1500 area. The key medium-term level to watch above comes in by the recent highs at 1.1025 and break of this level will help to confirm our bullish outlook. In the interim, Thursday’s break back above 1.0720 helps to take some pressure off of the downside and we look for a positive close for additional confirmation. Back under 1.0590 delays. STRATEGY: SIDELINED FOR NOW; LOOK TO BUY

Written by Joel Kruger, Technical Currency Strategist for
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