Euro shorts triggered by falling channel and fib resistance. Dollar/Yen bounces from Ichimoku and breaks sequence of 7 consecutive daily lower highs. Cable rallies sharply but still caught in the middle of no-man's land. Dollar/Swiss considers close below critical 200-Day SMA.

04-29-09_classical_1

EUR/USD

EUR/USD - Yesterday, we attempted a short in the pair into the afternoon but were forced to exit on the close for a 5 pip loss after the market failed to pull back as we had hoped. This resulted in a daily close that was far less bearish than we had anticipated and left us on the sidelines into Wednesday. However, there is a confluence of technical resistance above 1.3300, with falling channel resistance, the 50% fib retrace off of the major 1.3740-1.2885 move, and the 61.8% fib retrace off of the 1.3585-1.2885 move. Additionally, our daily Average True Range (ATR) analysis also projects a potential high on Wednesday just over 1.3300. As such, rallies above 1.3300 have been used as an opportunitiy to once again attempt short positions in anticipation of a resumption of the broader downtrend. Position: SHORT @1.3325 FOR A 1.3000 OBJECTIVE, STOP @1.3460. Stops to be trailed to cost on a break back below 1.3275. If trade triggers and 1.3275 not broken, position to be closed out at NY close (5pm NY time) on Wednesday. Recommendation to be removed if not triggered by NY close on Wednesday.

Level

Resistance

Details

1.3500

R3

Psychological

1.3420

R2

4/7 high

1.3395

R1

4/13 high

Level

Support

Details

1.3200

S1

Figure

1.3165

S2

4/28 high

1.3120

S3

4/29 low

USD/JPY

USD/JPY - The pair has been very well supported on dips to the Ichimoku cloud with the market finally reversing course on Wednesday to break back above Tuesday's 96.80 highs. This ends a sequence of 7 consecutive daily lower highs and likely signals fresh upside over the coming days back towards the 99.00-100.00 area. Only back below 95.60 gives reason for pause. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

98.45

R3

4/23 high

98.15

R2

4/24 high

97.30

R1

4/27 high

Level

Support

Details

96.40

S1

4/29 low

95.60

S2

4/28 low

95.00

S3

Psychological

GBP/USD

GBP/USD - No reason to be taking positions at current levels with the market caught in the middle of a very choppy range. Our bias however is for an eventual resumption of the broader downtrend to be confirmed on a break back below 1.4395 which should then open a fresh downside extension exposing next key support by 1.4110 (30Mar low). Any rallies should be well capped in the 1.4800's, but only a sustained break back above 1.5000 would be required to shift outlook. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.5070

R3

4/16 high

1.4945

R2

4/17 high

1.4820

R1

4/20 high

Level

Support

Details

1.4690

S1

4/28 high

1.4610

S2

4/29 low

1.4515

S3

4/27 low

USD/CHF

USD/CHF - Threatening to close below the 200-Day SMA for the first time since early January after the pair had been very well supported on dips to the longer-term moving average since early March. A close below the 200-Day will be bearish and should open the door to more significant setbacks over the coming days towards 1.1165. Inability to close below will however once again keep the recovery structure intact. Currently the 200-Day SMA comes in at 1.1360. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.1500

R3

Psychological

1.1450

R2

4/29 high

1.1400

R1

Figure

Level

Support

Details

1.1300

S1

Figure

1.1240

S2

4/6 low

1.1165

S3

3/19 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
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