Euro Looking to Carve Meaningful Top (Daily Classical)

• Euro finding short-term top
• Dollar/Yen bounces by 78.6
• Cable carving right shoulder
• Dollar/Swiss bullish reversal

EUR/USD[/B] – We are entering optimal levels to start to look to build longer-term and more meaningful short positions. Daily studies are rolling from overbought and the market should be well capped by resistance in the 1.4600-1.4720 area. Look for any rallies above 1.4700 to be unsustainable with the greater likelihood for a minimum pullback into the 1.4300’s. While the 50-Day SMA at 1.4230 is a ways a way at this point, this will be the key medium-term level to watch below. A break will shift the structure. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES

[B]USD/JPY[/B] – While the overall structure remains intensely bearish, the recent break below 91.75 leaves daily studies oversold and in need of a healthy corrective bounce. Recommend looking to take advantage of current dips to the 78.6% fib retracement off of the 2009 low-highs (90.25) in favor of some decent upside over the coming days/weeks. Inability to bounce over the coming sessions however, will expose direct retest of critical 87.15. [B]POSITION: LONG @90.90 FOR AN OPEN OBJECTIVE; STOP @89.40. [/B]

     [B]GBP/USD[/B] – We continue to maintain a sell on rallies approach to this market with the view that the pair has made a meaningful high above 1.7000 this year. The ensuing price action is more choppy consolidation than any threat of a fresh upside extension beyond 1.7000. Arguably, the market could even be in the process of carving the right shoulder of a head & shoulders top that ultimately would project setbacks to 1.5000 over the coming weeks. Friday’s gravestone doji formation and Monday’s bearish follow through could act as the catalyst. Above 1.7000 negates. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES


USD/CHF[/B] – The multi-week prominent range trade has now been broken to the downside with the market taking out psychological barriers at 1.0500 and descending to fresh 2009 lows by 1.0340. However, with daily studies oversold, any additional declines are seen limited, in favor of a sizeable corrective bounce back towards the 1.0700-10900 area over the coming weeks. Friday’s bullish reversal close is showing some good positive follow through on Monday thus far, which could get things going. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO BUY DIPS


[B]Written by Joel Kruger, Technical Currency Strategist for
If you wish to receive Joel’s reports in a more timely fashion, e-mail [/B][B][email protected][/B] [B]and you will be added to the [/B][B]“distribution” [/B][B]list.[/B][B][/B]

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