Greenback Seen Lower into Thursday (Daily Classical)

Euro fails to establish momentum after breaking to fresh 2009 lows. Dollar/Yen inches closer to 100.00. Cable seen higher into Thursday. Dollar/Swiss posts 7th consecutive daily higher low despite late pullback. Dollar/Cad reverses ahead of psychological barriers. Australian Dollar still content on trading within broad range. New Zealand Dollar biggest gainer on the day.

[B]EUR/USD

[/B] EUR/USD – While today’s break below 1.2515, to fresh 2009 lows at 1.2455 now opens the door for a retest of 1.2330, there is room for a corrective rally over the coming days, before considering resumption of the broader downtrend. The bullish hammer-like price action on Wednesday, suggests that at a minimum, we should see some more upside into Thursday. Ultimately however, any rallies are expected to be well capped below the 20-Day SMA at 1.2755 which has acted as a ceiling on a close basis throughout 2009. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.2800

                                                                       R3

                                                                       Figure

                                                                                                                 1.2755

                                                                       R2

                                                                       20-Day SMA

                                                                                                                 1.2680

                                                                        R1 

                                                                       3/3 high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.2515

                                                                       S1

                                                                       2/27 low

                                                                                                                 1.2455

                                                                       S2

                                                                       3/4 low

                                                                                                                 1.2420

                                                                       S3

                                                                       11/21 low

[B]USD/JPY

[/B] USD/JPY – The latest three day consolidation has been broken and despite highly overbought readings the price has pushed higher to easily exceed previous resistance by 98.70-90 (26Feb high/50% fib retracement) into the mid 99.00’s thus far. While in the more medium-term we favor additional upside above 100.00 into the 104.00 area after the pair had broken out of a major double bottom at 94.60, in the shorter-term we continue to favor looking for compelling opportunities to fade the current up-move. There is some formidable resistance just over 100.00 as well, in the form of the 200-Day SMA (100.15) and upper Bollinger (100.10). Strategy: SIDELINED; AWAIT CLEARER SIGNAL. We had issued a sell recommendation earlier today at 100.15 but it does not look like the trade will trigger.

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 100.60

                                                                       R3

                                                                       11/4 high

                                                                                                                 100.15

                                                                       R2

                                                                       200-Day SMA

                                                                                                                 100.00

                                                                        R1 

                                                                       Psychological

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 98.15

                                                                       S1

                                                                       3/4 low

                                                                                                                 96.85

                                                                       S2

                                                                       2/27 low

                                                                                                                 96.35

                                                                       S3

                                                                       2/25 low

[B]GBP/USD

[/B] GBP/USD – Wednesday’s break back above Tuesday’s 1.4160 high should now delay additional setbacks temporarily in favor of some corrective action into Thursday. The market looks to be putting in a bullish outside day following 3 consecutive down days and we see the risk for a move back towards 1.4385 (26Feb high). Ultimately, any rallies should eventually stall out ahead of the 50-Day SMA at 1.4445 which has proved to be a formidable resistance point for much of the downtrend. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.4455

                                                                       R3

                                                                       50-Day SMA

                                                                                                                 1.4315

                                                                       R2

                                                                       3/2 high

                                                                                                                 1.4200

                                                                        R1 

                                                                       Figure

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.3985

                                                                       S1

                                                                       3/4 low

                                                                                                                 1.3930

                                                                       S2

                                                                       1/27 low

                                                                                                                 1.3825

                                                                       S3

                                                                       78.6% Fib

[B]USD/CHF

[/B] USD/CHF – Remains locked in a choppy multi-day sideways consolidation with price action largely confined to the 1.1465-1.1890 area. The overall structure however remains bullish and we expect dips to continue to be well supported ahead of an eventual break to challenge the key 2008 highs at 1.2300. Back above 1.1890 should accelerate gains and open fresh upside, while only below 1.1465 delays. It is worth noting that despite the sideways chop, the market has now managed to put in 7 consecutive daily higher lows to reaffirm overall bullish bias. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.2000

                                                                       R3

                                                                       Psychological

                                                                                                                 1.1890

                                                                       R2

                                                                       2/20 high

                                                                                                                 1.1850

                                                                        R1 

                                                                       3/4 high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.1680

                                                                       S1

                                                                       3/3 low

                                                                                                                 1.1635

                                                                       S2

                                                                       3/2 low

                                                                                                                 1.1595

                                                                       S3

                                                                       2/26 lows

[B]USD/CAD

[/B] USD/CAD – Gains have stalled out ahead of the illusive 1.3000 handle on Wednesday to set up a bearish reversal day which has triggered our trailing stop. Given the recent rally and failure ahead of 1.3000, the risks from here are for some form of a pullback into Thursday before a fresh assault can be made on the 1.3020, 2008 highs. Look for a potential drop back towards the 1.2500 area by the 20-Day SMA from where a higher low would ideally be sought ought. We will look for opportunities to re-buy into dips. Position: LONG @1.2620 STOPPED FOR PROFIT @1.2795. STAND ASIDE.

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.3020

                                                                       R3

                                                                       10/28 Trend High

                                                                                                                 1.3000

                                                                       R2

                                                                       Psychological 

                                                                                                                 1.2975

                                                                        R1 

                                                                       3/3 high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.2725

                                                                       S1

                                                                       3/2 low

                                                                                                                 1.2675

                                                                       S2

                                                                       2/17 high

                                                                                                                 1.2525

                                                                       S3

                                                                       20-Day SMA

[B]AUD/USD

[/B] AUD/USD – While a break back above 0.6555 is required to take pressure off of the downside, price action over the past 2 days has been quite constructive and suggests that we could indeed see a retest of 0.6555 into Thursday. The market has been locked in a well defined chop over the past several months and could once again be looking to bounce out from the range lows. However, given the overriding bearish trend, we are less inclined to play the long side, especially considering risk/reward is not favorable. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 0.6645

                                                                       R3

                                                                       2/13 high

                                                                                                                 0.6555

                                                                       R2

                                                                       2/25 high

                                                                                                                 0.6510

                                                                        R1 

                                                                       3/4 high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 0.6340

                                                                       S1

                                                                       2/27 low

                                                                                                                 0.6285

                                                                       S2

                                                                       3/3 low

                                                                                                                 0.6250

                                                                       S3

                                                                       2/2 low

[B]NZD/USD

[/B] NZD/USD – A strong bullish outside day on Wednesday has in fact consumed the previous 2 day range and it looks as though the bear trend has stalled out for now. This should open further upside into Thursday with the market potentially trading back towards the 0.5200 area before ideally considering a resumption of the underlying bear trend. Kiwi was the outperformer on the day across the board trading some 2% higher against the USD. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 0.5195

                                                                       R3

                                                                       2/25 high

                                                                                                                 0.5130

                                                                       R2

                                                                       2/26 high

                                                                                                                 0.5090

                                                                        R1 

                                                                       2/27 high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 0.4895

                                                                       S1

                                                                       3/4 Trend Low

                                                                                                                 0.4820

                                                                       S2

                                                                       Major 78.6% Fib

                                                                                                                 0.4485

                                                                       S3

                                                                       Aug 2002 low

Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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</p> Joel Kruger publishes 6 daily pieces:

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