• Euro bearish consolidation
• Dollar/Yen seen higher
• Cable lower top sought
• Dollar/Swiss back to 1.0500
EUR/USD – The weakness on Thursday could finally be setting us up for the desired close below the 20-day SMA (1.4610) which has propped for a month’s time. Look for a fresh lower top now by 1.4680 to be confirmed on a break below 1.4525 over the coming sessions. Below 1.4525 should accelerate declines and open the next drop back towards our initial objective in the 1.4400-65 area. Only back above 1.4680 delays and gives reason for concern. STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES.
USD/JPY – As expected, the pullback on Wednesday stalled out just ahead of our 89.30 level and the market has since bounced back above 90.00. With daily studies closer to oversold territory and recently turning up, we continue to favor the prospect for additional strength over the coming days back towards the 92.00 area before considering the possibility of a bearish resumption. Right now, the price has been confined to inside day trade with a break above 90.40 required to get things going. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO BUY
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GBP/USD – While the recent H&S top that triggered in the previous week projects deeper setbacks over the medium-term to a measured move objective at 1.5000, we would caution bears with daily studies in the process of bouncing from oversold and more likely inclined to bounce some more ahead of the next downside extension. Nevertheless, a lower top is now sought out by Wednesday’s 1.6130 high to be confirmed on a break below 1.5770. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES
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USD/CHF – Looks like it could be in the process of carving out a base after dropping to a fresh 2009 low by 1.0185 in the previous week. The market has since broken back above 1.0400 and now has its sights set on establishing a close above the 20-Day SMA at 1.0365. A close above 1.0365 will be encouraging for bulls and open an acceleration of gains back above 1.0500 over the coming sessions. [B]STAND ASIDE FOR NOW; LOOK TO BUY
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Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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