• Euro rallies limited
• Dollar/Yen corrective upside
• Cable consolidates
• Dollar/Swiss propped on dips
EUR/USD – The break to a fresh weekly lower low now helps to confirm our outlook for a top by 1.4845, with deeper setbacks projected back into the 1.4100-1.4200 area over the coming days/weeks. Look for a lower top by 1.4720, with a test of initial critical support by the 50-Day SMA in the 1.4400 area which has been supporting over the past several months. A close below the 50-Day should accelerate declines. Any rallies on Monday are expected to be well capped ahead of 1.4700. [B]POSITION: SHORT @1.4625 FOR AN OPEN OBJECTIVE; STOP 1.4775.
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USD/JPY – While the overall structure remains intensely bearish, the recent weakness leaves daily studies in need of a healthy corrective bounce. Look for the 88.25 weekly low to hold for now ahead of some corrective upside over the coming days back towards the 93.00-94.00 area. However, any rallies are classed as corrective with a retest of the critical matched trend lows from 2008/2009 at 87.15 expected. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO BUY
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GBP/USD – The much talked about neckline of the major h&s topping pattern has finally been triggered with the result to likely open a measured move decline towards the 1.5000 area over the coming weeks. Look for a lower top by 1.6130, to be confirmed on a break below 1.5770 over the coming days. Below 1.5770 opens a fresh downside extension to initial support by 1.5430 in the form of the 200-Day SMA. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES
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USD/CHF – Has ended a sequence of consecutive weekly lower tops, with some good upside follow through seen following the previous week’s bullish doji-like reversal. We contend that a major base is now in place by 1.0185 and look for an acceleration of gains over the coming days back above 1.0500 and towards the 1.0700 area. Any setbacks on Monday are expected to be well propped ahead of 1.0250. [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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