• Euro remains locked in consolidation
• Dollar/Yen stalls ahead of key 91.75
• Cable sell issued at 1.6450
• Dollar/Swiss setbacks seen limited
EUR/USD
[B]EUR/USD –[/B] The market doesn’t appear ready to roll over just yet with a recovery late Monday keeping the price confined to a multi-day consolidation below the 2009 low dating back to August 21. While our longer-term bias continued to favor eventual USD appreciation, our short-term view is neutral, with a break above 1.4445 or back below 1.4205 required for clearer directional bias. Medium-term traders can focus on the 50-Day SMA which comes in at 1.4160 for directional bias. While above the 50-Day on a close basis, the trend remains constructive. [B]STRATEGY: STAND ASIDE; AWAIT CLEARER SIGNAL
[/B] USD/JPY
USD/JPY – Continues to track lower with the market now eyeing a retest of the recent trend lows by 91.75 from mid-July. With the market now exceeding the 78.6% fib retracement off of the 91.75-97.80 move, we would now expect a full retracement and retest of 91.75 over the coming sessions. Any rallies should be well capped ahead of 95.00, with a break below 91.75 to expose the more significant multi-year matched trend lows at 87.15 further down. STRATEGY: STAND ASIDE; AWAIT CLEARER SIGNAL GBP/USD
[B]GBP/USD – [/B]Well bid thus far on Tuesday with the price rallying back towards the recent consolidation highs by 1.6385. A 2-day close above 1.6385 will delay any hopes for a nearer-term decline towards 1.6000 and open a potential rally back towards the 1.6700 area, while any topside failure ahead of or above 1.6385 will keep bearish consolidation prospects intact in favor of a fresh drop through 1.6155 and towards 1.6000. We like the idea of selling any rallies above 1.6400 with the 20-Day SMA on the verge of a negative cross with the 50-Day SMA. The last time the 20-Day crossed below the 50-Day was back in August 2008, when the market dropped from 1.9000 all the way down to the 1.3500 multi-year lows. The impending negative cross could once again be warning of a material bearish resumption. [B]STRATEGY: SELL @1.6450 FOR AN OPEN OBJECTIVE; STOP 1.6650. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM) ON TUESDAY. [/B]
USD/CHF
USD/CHF – Continues to chop around within a very well defined multi-week range with the price currently residing at the lower end of the range. We like the idea of looking to keep playing the multi-week range with any breaks to fresh 2009 lows seen as limited. Ultimately, only a close back below psychological barriers at 1.0500 would give reason for re-think. As such, we will be looking for opportunities to buy on dips towards 1.0500 over the coming sessions, in anticipation of an eventual break back above 1.0715. For now, we remain sidelined. STRATEGY: SIDELINED FOR NOW; LOOK TO BUY
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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