• Euro poised for 1.4720 break
• Dollar/Yen eyes 90.00
• Cable still relatively weak
• Dollar/Swiss focused on 78.6%
[B]
EUR/USD [/B]– The daily RSI is now above 70 warning of a near-term pullback but the market still shows willingness to race higher with the key highs from late 2008 by 1.4720 in sight. Look for this level to be easily take out on Wednesday with additional gains seen to the 1.4780 area before the market finally looks to establish a top and reverse course. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES [/B]
[B]
USD/JPY[/B] – In the process of consolidating the latest round of setbacks after breaking down through the recent trend lows at 91.75. The overall structure remains intensely bearish and a push back below 90.20 could still force a fresh downside extension to retest critical support by 87.15. However, daily studies are looking stretched at current levels and we would recommend that bears proceed with caution. Selling into rallies is the preferred strategy for now. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES
[/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 ensuing price action is more choppy consolidation than any threat of a fresh upside extension beyond 1.7000. Arguably, the market could even 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. Friday’s 1.6745 high is expected to cap any additional intraday rallies, while back under 1.6400 should accelerate declines. Only a close above 1.6745 would give reason for concern. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL RALLIES
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[B]
USD/CHF[/B] – The recent break below 1.0370 now opens the door for a deeper drop into the 1.0200’s over the coming hours. However, daily studies are now oversold and we would recommend looking to take advantage of any dips towards the 1.0200 figure to establish a very playable long trade. The 1.0200 figure coincides with the 78.6% fib retracement off of the major 2008 low-highs and should serve as a formidable level to prop any additional declines. [B]STRATEGY: STAND ASIDE FOR NOW; LOOK TO BUY DIPS
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[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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