• Euro setbacks continue to be very well supported
• Dollar/Yen locked in choppy consolidation trade
• Cable easily exceeds key psychological barriers; ignores overbought readings
• Dollar/Swiss rallies one again well capped ahead of 1.0930



EUR/USD

EUR/USD - With the daily RSI rolling over from overbought, the risks from here are for a material pullback over the coming days. However, Tuesday and Wednesday's jackknife reversals off of the respective daily lows is concerning and we will need to see a break back below 1.3860 to get things once again moving back to the downside. Above 1.4050-60 delays and exposes the 1.4100-50 area. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.4150

R3

12/31 high

1.4060

R2

1/2 09 high

1.4050

R1

5/22 high

Level

Support

Details

1.3900

S1

Figure

1.3860

S2

5/26 low

1.3795

S3

10-Day SMA


USD/JPY

USD/JPY - The market had 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. Friday's bullish close has been followed by some constructive consolidation this week which could now suggest that an interim base is in place by 93.85 ahead of a bounce back towards 96.70 over the coming days. Below 93.85 negates. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

96.70

R3

5/19 high

96.25

R2

5/20 high

95.55

R1

5/27 high

Level

Support

Details

94.40

S1

5/25 low

93.85

S2

5/22 low

93.55

S3

3/19 low


GBP/USD



GBP/USD - Any pullbacks intraday have been met with some very strong buying and the market continues to ignore daily overbought readings in favor of a retest on critical psychological barriers by 1.6100. Tuesday's price action initially looked quite bearish after breaking down to take out the previous daily low and end a sequence of 5 consecutive daily higher lows. However, the sharp rebound into the afternoon quickly dashed any hopes for a more significant retreat in favor of a push to fresh 2009 highs easily exceeding 1.6000. While we do anticipate a major pullback over the coming days, recent price action suggests that the time has not yet come for said correction. Strategy: SELL @1.6120 FOR A 1.5520 OBJECTIVE, STOP @1.6270.

Level

Resistance

Details

1.6200

R3

11/5 high

1.6110

R2

11/4 high

1.6100

R1

Figure

Level

Support

Details

1.5780

S1

5/26 low

1.5755

S2

5/22 low

1.5700

S3

Figure


USD/CHF

USD/CHF - Any hopes for a recovery on Tuesday were delayed with the sharp pullback into the afternoon back to daily opening levels. The market has since been chopping around, considering its next move. A break below 1.0800 will open the door for bearish resumption exposing the 2009 lows at 1.0610, while back above 1.0930 would suggest that an interim base is in place, favoring a more significant corrective rally. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.1130

R3

5/20 high

1.1055

R2

5/21 high

1.0930

R1

5/26 high

Level

Support

Details

1.0810

S1

5/22 low

1.0715

S2

78.6% fib

1.0610

S3

1/2 09 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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