WE WILL USE THE FIRST MONDAY OF THE MONTH AS AN OPPORTUNITY TO PROVIDE A BROADER OVERVIEW AND LONGER-TERM OUTLOOK FOR THE MAJOR CURRENCIES. ON TUESDAY, WE WILL RETURN TO THE REGULAR DAILY ANALYSIS.

•Euro pressing higher but rallies seen limited to 1.4000
•Dollar/Yen well capped for now ahead of 100.00
•Cable price action unclear at present
•Dollar/Swiss takes out 200-Day SMA but still constructive longer-term
•Dollar/Cad long triggered; trades to fresh 2009 lows
•Australian Dollar rallies above 0.7400 to fresh 2009 highs; considers major double bottom
•New Zealand Dollar locked in choppy sideways trade

EUR/USD

EUR/USD - Very difficult to tell where we go from here with the major caught in the middle of a multi-day range. Ultimately however, the overall structure remains grossly bearish with any medium-term rallies back towards the 1.4000 area to be used as compelling opportunities to build on existing short positions. The market has been chopping around over the past few weeks and we expect the chop to continue with key shorter-term levels to watch above and below coming in by 1.3740 and 1.2885 respectively. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.3585

R3

4/6 high

1.3500

R2

Psychological

1.3425

R1

5/4 high

Level

Support

Details

1.3195

S1

4/30 low

1.3120

S2

4/29 low

1.3000

S3

4/27 low

USD/JPY

USD/JPY - Continues to consolidate in choppy fashion following the March break of the major 87.15 double bottom neckline at 94.60. Ultimately, any setbacks are seen well supported towards the neckline, which now acts as former resistance turned support, ahead of an eventual test of the measured move double bottom objective in the 104.00 area. The market has finally broken back above the daily Ichimoku cloud which reaffirms our bullish outlook to 104.00. Any moves beyond 104.00 are however seen limited with the longer-term structure still bearish and favoring a fresh lower top ahead of the next major downside extension below 87.15. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

100.45

R3

4/14 high

100.00

R2

Psychological

99.75

R1

4/17 high

Level

Support

Details

98.50

S1

5/1 low

97.95

S2

4/29 high

97.15

S3

4/30 low

GBP/USD

GBP/USD - The market seems to have found a base for now by 1.3500 and it remains to be seen whether we are merely in the process of a bearish consolidation or possibly looking to carve out a major bottom. At current levels there are no compelling opportunities and we recommend looking to favor the broader structure which is still bearish, by selling into rallies above 1.5000 and towards 1.5500. Key levels to watch over the coming weeks come in by 1.5375 and 1.4395. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.5375

R3

1/8 2009 High

1.5200

R2

Figure

1.5070

R1

4/16 high

Level

Support

Details

1.4755

S1

5/1 low

1.4705

S2

4/30 low

1.4610

S3

4/29 low

USD/CHF

USD/CHF - Price action has been extremely choppy, but overall, our bias remains constructive with the market attempting to put in series of medium-term higher lows and higher highs since basing by 0.9635 in 2008. A fresh higher low is now sought out by 1.1165 to be confirmed on a break back above 1.2300. Below 1.1165 will delay recovery prospects and expose a deeper setback to the 1.1000 area, while back above 1.1740 encourages advance towards 1.2300. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.1525

R3

4/24 high

1.1500

R2

4/29 high

1.1450

R1

4/29 high

Level

Support

Details

1.1240

S1

4/6 low

1.1165

S2

3/19 low

1.1110

S3

1/16 low

USD/CAD

USD/CAD - The market has been consolidating in a bullish fashion since the surge to 1.3020 back in October 2008, with a very broad range now being loosely defined in the 1.1500-1.3000 area. Longer-term studies still show plenty of room for upside over the coming months and as such, we favor buying on any dips towards 1.1500, by the bottom of the range, in anticipation of some significant upside back above the recent trend and 2009 highs at 1.3065. Key levels to watch over the coming weeks come in by 1.2270 and 1.1500. Position: LONG @1.1780 FOR A 1.2270 OBJECTIVE, STOP @1.1630. Stops to be trailed to cost on a break back above 1.1830. If 1.1830 not broken, position to be closed out at NY close (5pm ET).

Level

Resistance

Details

1.2075

R3

4/24 low

1.2050

R2

4/30 high

1.1955

R1

5/1 high

Level

Support

Details

1.1750

S1

5/4 2009 low

1.1700

S2

Figure

1.1655

S3

11/10 low

AUD/USD

AUD/USD - Price action in the antipodean is looking extremely constructive longer-term, with the market breaking back above the previous 2009 highs from January at 0.7270 to trigger a major double bottom formation. The formation ultimately projects fresh upside over the coming weeks/months back towards the 0.8500 area. However, we would not recommend playing the double bottom, with the market just as easily seen rolling back over in favor of some more bearish consolidation. Our preferred strategy therefore is to sell into extreme rallies and buy into overextended dips. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

0.7740

R3

10/6 high

0.7500

R2

Psychological

0.7410

R1

5/4 2009 high

Level

Support

Details

0.7230

S1

4/30 low

0.7160

S2

4/23 high

0.7050

S3

4/29 low

NZD/USD


NZD/USD -
Recent rallies in March and April, though impressive, have failed to break above the 2009 highs by 0.6035, leaving the overall structure still grossly bearish. We look for the 0.6035-0.6085 area to continue to cap gains ahead of a resumption of setbacks back towards the 0.5200 over the coming weeks. In the interim, the key level to watch below comes in by 0.5485 with a break below this level to reaffirm bearish bias. Back above 0.6085 however, will negate and shift structure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

0.5985

R3

4/6 high

0.5825

R2

4/16 high

0.5780

R1

4/29 high

Level

Support

Details

0.5570

S1

4/29 low

0.5530

S2

4/28 low

0.5485

S3

4/20 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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Daily Classical - A Daily Technical Overview of the Major Currencies.
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