•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 - 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.|
|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.|
|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.|
|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.|
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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