USD Remains Well Offered Despite Oversold Readings (Daily Classical)

• Euro continues to surge; takes out 1.4300
• Dollar/Yen remains locked in sideways trade
• Cable breaks above 1.6500 barriers; 1.6675 next
• Dollar/Swiss finally posts fresh 2009 lows for first time since January

EUR/USD

                                               [B]EUR/USD –[/B] Monday’s   bearish doji-like close has been negated and the market has once again   managed to surge to fresh 2009 highs beyond 1.4300. Daily studies however   remain overbought and now well above 70 on the RSI which warns of a pullback   over the coming days. We had attempted a short trade on Monday but the market   easily took us out at 1.4260. From here we will stand aside and await another   opportunity to establish a counter-trend short. [B]Strategy: SIDELINED; AWAIT   CLEARER SIGNAL.[/B]

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.4435

                                                                       R3

                                                                       12/17     high

                                                                                                                 1.4365

                                                                       R2

                                                                       12/29 high

                                                                                                                 1.4315

                                                                        R1 

                                                                       6/2 09     high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.4165

                                                                       S1

                                                                       5/29     high

                                                                                                                 1.4100

                                                                       S2

                                                                       6/1     low

                                                                                                                 1.4005

                                                                       S3

                                                                       10-Day     SMA

USD/JPY

                                              [B]USD/JPY –[/B] The market   has been well offered over the past several weeks but setbacks have now   stalled out just shy of next key support by 93.55 from March, which guards   against the critical 87.15 multi-year trend lows. We have seen a contraction   in volatility over the past few sessions which suggests that a break out   looms. However, the direction is unclear at this point with a push above   97.25 or back under 93.85 required for a clearer bias. [B]Strategy:   SIDELINED; AWAIT CLEARER SIGNAL.[/B]

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 97.85

                                                                       R3

                                                                       5/12     high

                                                                                                                 97.25

                                                                       R2

                                                                       5/28     high

                                                                                                                 96.65

                                                                        R1 

                                                                       6/2     high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 95.35

                                                                       S1

                                                                       6/2 low

                                                                                                                 95.00

                                                                       S2

                                                                       5/29     low

                                                                                                                 94.45

                                                                       S3

                                                                       6/1     low

GBP/USD

                                               [B]GBP/USD – [/B]The market continues to extend gains in unrelenting fashion to stretch   our short trade out of the money. Nevertheless, daily studies remain highly   overextended as evidenced by the above 80 daily RSI reading and the risk fro   here are for limited gains, in favor of a more significant corrective   pullback. A break back under 1.6325 is required to shift focus back on the   downside. Next key topside resistance comes in by 1.6675. [B]Position: SHORT   @1.6407 FOR AN OPEN OBJECTIVE, STOP @1.6687. [/B]

         

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.6675

                                                                       R3

                                                                       10/30     high

                                                                                                                 1.6600

                                                                       R2

                                                                       Figure

                                                                                                                 1.6585

                                                                        R1 

                                                                       6/2 09     high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.6325

                                                                       S1

                                                                       6/2     low

                                                                                                                 1.6200

                                                                       S2

                                                                       5/29 high

                                                                                                                 1.6160

                                                                       S3

                                                                       6/1     low

USD/CHF

                                              [B]USD/CHF[/B] – After finally trading down to fresh 2009 lows (first time since   January) and breaking below 30 on the daily RSI, the market could be looking   for a much needed and healthy corrective rally. However, the bear trend has   been quite intense and we will need to see a break back above 1.0745 for   confirmation of short-term basing. In the interim, next key support comes in   by 1.0485 which guards against the key 1.0370 trend lows from late December. [B]Strategy:   SIDELINED; AWAIT CLEARER SIGNAL.[/B]  

         

                                                                                                                           [B]Level[/B]

                                                                       [B]Resistance[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.0860

                                                                       R3

                                                                       5/29     high

                                                                                                                 1.0805

                                                                       R2

                                                                       5/28     low

                                                                                                                 1.0745

                                                                        R1 

                                                                       6/2 high

                                                                                                                 [B]Level[/B]

                                                                       [B]Support[/B]

                                                                       [B]Details[/B]

                                                                                                                 1.0595

                                                                       S1

                                                                       6/2 low

                                                                                                                 1.0485

                                                                       S2

                                                                       12/30     low

                                                                                                                 1.0370

                                                                       S3

                                                                       12/29     low

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 jskruger@fxcm.com and you will be added to the “distribution” list.

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