• Euro bearish outside day showing follow through
• Dollar/Yen rallies see well capped ahead of 97.00
• Cable loses momentum; reverses sharply to eye 10-Day SMA
• Dollar/Swiss slowing carving out base after fresh 2009 lows
EUR/USD - The market is showing signs of potentially rolling over after taking out the previous daily low by 1.4355. A bearish outside day on Wednesday has help to drive the move lower and with daily stochastics still residing in overbought territory, there is scope for additional declines over the coming days back towards initial support at 1.4205-55. Only back above the yearly high at 1.4445 would negate short-term bearish outlook. STRATEGY: STAND ASIDE; LOOK TO SELL
USD/JPY - Nothing compelling us to enter any trades at current levels. However, the broader structure still remains quite bearish with the market potentially looking to put in a lower top below 97.00 ahead of the next drop below 91.75. We maintain a sell on rallies outlook while the price remains below 97.00. STRATEGY: STAND ASIDE; LOOK TO SELL
GBP/USD - Our commentary from Wednesday has been confirmed and the market has lost its bullish momentum for now in favor of a very much needed corrective pullback. The closest SMA is still lower down in the form of the 10-Day, and we would expect to see a retest of the shorter-term moving average by 1.6655 at a minimum before even considering the prospect for a resumption of gains. For now, any rallies should be well capped ahead of 1.6900. Ultimately, only back above Wednesday's 2009 highs at 1.7040 negates. STRATEGY: STAND ASIDE; LOOK TO SELL
USD/CHF - The market is failing to show any decent downside follow through this week after breaking to fresh 2009 lows below 1.0590. Instead, the familiar range base is more or less intact for now with a doji close on Tuesday being followed by an upside reversal day on Wednesday and more positive follow through on Thursday. This could set up a rebound over the coming sessions back towards the 1.0700-1.0800 area. Nevertheless, we will remain sidelined until a clearer opportunity presents. STRATEGY: SIDELINED FOR NOW; POSSIBLE LOOK TO BUY
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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