Euro looking to put in inside day; still below 100-Day SMA. Dollar/Yen grinding higher; eyes break of 99.70. Cable setting up for doji close. Dollar/Swiss setbacks seen to 10/20-Day SMAs. Dollar/Cad stalling by multi-day rising trend-line support. Australian Dollar stochastics could be on verge of negative cross. New Zealand Dollar shows scope for additional gains; below 0.5205 negates.
EUR/USD - Remains constructive and continues to correct out from the recent 1.2455 lows set on March 4. The rally has however stalled out after just exceeding the 100-Day SMA on Monday to 1.3070 ahead of the latest minor setbacks. Next key topside resistance comes in by 1.3095 (9Feb high) while only back under 1.2835 negates recovery and shifts focus back on downside. Inside day price action on Tuesday leaves outlook unchanged. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/JPY - The market continues to consolidate since posting fresh yearly highs by 99.70 on March 5. At this point a compelling argument can be made in both camps with bulls arguing for bullish consolidation ahead of the next upside extension beyond 99.70, while bears still hold by the inter-day head & shoulders structure. The best position at present however is to remain on the sidelines until a clearer opportunity presents itself. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
GBP/USD - Despite the latest impressive upside moves, the current price action is still classed as corrective with the market very much confined to the overriding bear channel. The 50-Day SMA which currently comes in by 1.4345 has offered itself as formidable resistance for much of the downtrend and we would once again expect to see unsustainable gains on rallies above the 50-Day SMA. Right now, the 20-Day is managing to cap gains with a break back below 1.3890 to accelerate towards 1.3500. Inside day price action leaves us sidelined. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Usd/Chf - Despite the previous week's break to fresh 2009 highs at 1.1970, trade remains quite choppy and the market is still very much confined to the very prominent range that has defined price action over the past few months. The 10/20-Day SMAs come in by 1.1700 and we would look for a move back towards this level over the coming session, with any breaks below ultimately supported by the 50/100-Day SMAs at 1.1545. Only back above 1.1970 negates. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/CAD - The pair is in the process of correcting off of the 2009 highs set by 1.3065 on March 9. There is some solid support now approaching in the 1.2580-1.2650 in the form of the former triangle resistance and rising trend-line off of the 2009 lows that could however look to prop ahead of a resumption of the broader up-trend. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
AUD/USD - Gains have extended into the early week with the market trading to fresh multi-day highs beyond the 100-Day SMA to 0.6640 on Monday. Scope exists for additional upside, but the market still remains confined to the broader downtrend and a medium-term lower top is sought out ahead of the next drop back towards the multi-year range lows in the low 0.6000's. Ultimately, rallies should be well capped ahead of 0.6850 (9Feb high). For now, the 100-Day SMA is capping and a break back above will be required to keep pressure on the upside. Daily stochs are overbought and could be looking to rollover which does not bode well bulls. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
NZD/USD - The market is in the process of a minor corrective rally within the broader downtrend and scope now exists for additional upside into Wednesday with a retest seen on the 100-Day SMA at 0.5445. The 100-Day SMA has capped nearly the entire downtrend going back to May 2008 and we will look for the moving average to once again offer itself as a formidable spot for renewed selling and a medium-term lower-top. Back below 0.5205 will however signal an end to the current correction and expose a retest of the trend lows. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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