•Euro drop proves to be false break; look for 1.3740 test
•Dollar/Yen well supported by 100-Day SMA and just ahead of 95.00
•Cable continues with up and down chop; eyes test of 2009 highs
•Dollar/Swiss SMAs coiling indicative of major breakout ahead

EUR/USD

EUR/USD - The break below 1.3550 on Thursday appears to have been a false break with the market quickly recovering back above 1.3600 into the final hours of trade. While we do like the idea of looking to fade rallies in the Euro, we still see scope for additional upside from here with 1.3740 needing to be taken out at a minimum. Back under 1.3525 will however negate and shift focus back to downside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.3800

R3

1/8 high

1.3740

R2

3/19 high

1.3725

R1

5/13 high

Level

Support

Details

1.3525

S1

5/14 low

1.3475

S2

5/7 high

1.3400

S3

Figure

USD/JPY

USD/JPY - Finally finding some support by the 100-Day SMA just ahead of 95.00 after dropping off from 99.80 on May 7. While daily studies still show room for additional weakness, we prefer to stay on the sidelines until a clearer opportunity presents. It is quite possible that the pair is now locked in a 95.00-100.00 range that opens the door for an upside reversal into Friday. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

97.25

R3

5/11 low

96.70

R2

5/13 high

96.10

R1

5/12 low

Level

Support

Details

95.10

S1

5/14 lo/100-Day

94.15

S2

3/20 low

93.55

S3

3/19 low

GBP/USD

GBP/USD - Market price action remains extremely choppy with the pair failing to show any follow through from previous daily momentum. Since last Wednesday, it has been up-down-up-down-up-down-up. We retain a mildly bullish bias and given the proximity to the 2009 highs from early January, we see no reason why this level won't be tested over the coming sessions. A break back below 1.5060 will however delay the recovery structure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.5375

R3

1/8 2009 High

1.5350

R2

5/1 high

1.5300

R1

Figure

Level

Support

Details

1.5060

S1

5/14 low

1.4980

S2

5/5 low

1.4755

S3

5/1 low

USD/CHF

USD/CHF - Some very interesting price action in the pair with all relevant moving averages coiling, a sign that we could be nearing a major breakout. Our bias is for a major upside break but we can not rule out the possibility for additional setbacks towards the 1.0865 area before the rally occurs. Any dips to 1.0865 over the coming session will be used as a buy opportunity. Strategy: BUY @1.0865 FOR A 1.1200 OBJECTIVE, STOP @1.0740.

Level

Resistance

Details

1.1245

R3

5/5 low

1.1165

R2

3/19 low

1.1125

R1

5/14 high

Level

Support

Details

1.0975

S1

5/13 low

1.0865

S2

1/8 low

1.0800

S3

Figure

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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