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
If you wish to receive Joel’s reports in a more timely fashion, e-mail [email protected] and you will be added to the “distribution” list.
</p> 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)
“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross 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)