• Euro rallies to be sold
• Dollar/Yen very choppy
• Cable well capped
• Dollar/Swiss bounces by 78.6%
[B]
EUR/USD[/B] – Another day, another high for the pair which seems unwilling to acknowledge the need for a healthy corrective pullback. The daily RSI is easily above 70 and we continue to contend that any additional rallies are to be met will some solid resistance at this point. However, we do not recommend fading the trend at any level and instead continue to look for opportunities to sell into overbought intraday rallies. Any rallies towards 1.4900 on Wednesday should be used as a compelling counter-trend trade. Back under 1.4610 would be required to officially shift the short-term structure. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES
[/B]
[B]USD/JPY[/B] – Back under pressure since gains from Monday’s bullish price action stalled out shy of the 93.30 double bottom objective in favor of a resumption of the broader downtrend. It is too early to tell at this point, but a lower top could now be in place by 92.55 ahead of the next drop below 90.00 and towards critical support by 87.15. We do not hold any strong bias at current levels and recommend taking to the sidelines. [B]STRATEGY: STAND ASIDE FOR NOW; AWAIT CLEARER SIGNAL
[/B]
[B]GBP/USD[/B] – We continue to maintain a sell on rallies approach to this market with the view that the pair has made a meaningful high above 1.7000 this year. The market looks to be in the process of carving the right shoulder of a head & shoulders top that ultimately would project setbacks to 1.5000 over the coming weeks. We are now nearing and expected to test key neckline support which comes in just under psychological barriers at 1.6000. Any intraday rallies above 1.6500 on Wednesday should be sold into, while back under 1.6135 exposes a direct test of 1.5985. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES[/B]
[B]USD/CHF[/B] – Fresh 2009 lows yet again on Wednesday, but we now feel that the move is exhausted with the price finally testing and slightly exceeding the 78.6% fib retracement off of the major 2008-low-highs. Look for a firm low by 1.0185 with a break back above 1.0330 to confirm basing prospects and open a more significant corrective rally over the coming days. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO BUY[/B]
[B]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][B][email protected][/B] [B]and you will be added to the [/B][B]“distribution” [/B][B]list.[/B][B][/B]
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