•Euro consolidates ahead of 200-Day SMA retest
•Dollar/Yen price action favors deeper setbacks
•Cable shows inside day price action; still eyes 1.5375 yearly high
•Dollar/Swiss stuck in directionless trade; stand aside
|EUR/USD - The market has shown some signs of stalling with gains extending to 1.3440 ahead of the latest minor pullbacks. However, daily studies now show more room to run with a test of the 200-Day SMA at 1.3500 seen over the coming sessions. A break of the 200-Day will expose 1.3585 which ultimately guards against the key trend highs by 1.3740. Key support comes in by 1.3195 with a break below required to take the pressure off of the topside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|USD/JPY - Daily studies are mixed but price action is starting to look a little toppish after gains stalled out by 99.60 on Friday and Monday. As such our short-term bias is now mildly bearish with the latest break below 98.50 to likely open a deeper drop back towards 97.15 initially. Back above 99.60 is now required to negate. Nevertheless, we continue to sit on the sidelines with no compelling risk/reward set-ups at current levels. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|GBP/USD - Has easily broken back above psychological barriers by 1.5000 and daily studies still show plenty of room for additional gains over the coming sessions back towards the 2009 highs from January by 1.5375. However, from there we see the risks for a pullback and resumption of the broader downtrend, and as such, will be looking for opportunities to sell on a break above 1.5375. In the interim, setbacks should be well supported ahead of 1.4980 with a break below to delay recovery structure. Wednesday's inside day price action has been uneventful. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|USD/CHF - Despite the latest break below the much talked about 200-Day SMA, we are still reluctant to adopt a bearish view, with the market very much locked in a choppy multi-day range trade. Setbacks should be well supported ahead of 1.1165 with only a sustained break below the latter to ultimately shift our bias. A break back above 1.1450 is required to take pressure off of the downside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
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 firstname.lastname@example.org and you will be added to the distribution list.
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