• Euro looking to put in bearish outside day
• Dollar/Yen caught in directionless trade
• Cable to fresh 2009 highs but could be losing momentum
• Dollar/Swiss showing signs of short term bullish reversal
EUR/USD – While the daily RSI still shows room for additional gains, stochastics are showing a negative cross from overbought and the market is looking to put in a bearish outside day pending a close below 1.4405 on Wednesday. Today’s break below 1.4365 could now act as the catalyst for a short-term reversal back towards 1.4205-30 over the coming sessions by Monday’s low and the 10-Day SMA. STRATEGY: STAND ASIDE; AWAIT CLEARER SIGNAL
USD/JPY – Nothing compelling us to enter any trades at current levels. However, the broader structure still remains quite bearish with the market potentially looking to put in a lower top below 97.00 ahead of the next drop below 91.75. Inside day price action on Wednesday leaves us sidelined for now but we maintain a sell on rallies outlook while the price remains below 97.00. STRATEGY: STAND ASIDE; LOOK TO SELL
GBP/USD – Although the market continues to ascend to fresh 2009 highs, reaching 1.7040 on Wednesday, the impressive rally now appears to be losing some momentum with the intensity of gains not as convincing. Additionally, the daily RSI has just now crossed into overbought territory which is a red flag warning sign for a short-term reversal on the horizon. A close on Wednesday at or near 1.6940 will help to strengthen short-term reversal prospects, while back under 1.6890 confirms. Our strategy will be to continue to look for opportunities to sell, but we will not look to force anything with the overriding trend still deeply bullish. STRATEGY: STAND ASIDE; LOOK TO SELL
USD/CHF – The market is failing to show any decent downside follow through this week after breaking to fresh 2009 lows below 1.0590. Instead, the familiar range base is more or less intact for now with a doji close on Tuesday being followed by an upside reversal day on Wednesday. This could set up a rebound over the coming sessions back towards the 1.0700-1.0800 area. Nevertheless, we will remain sidelined until a clearer opportunity presents. STRATEGY: SIDELINED FOR NOW; AWAIT CLEARER SIGNAL
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
If you wish to receive Joel’s reports in a more timely fashion, e-mail [B][email protected][/B] and you will be added to the “distribution” list.
Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)