Euro 200-Day SMA comes into focus. Dollar/Yen pulls back sharply, but additional setbacks limited. Cable above 50-Day SMA; can it hold. Dollar/Swiss breaks range but runs into 200-Day SMA. Dollar/Cad still constructive despite pullback. Australian Dollar could continue to test 2009 highs. New Zealand Dollar kisses 70 on daily RSI.
EUR/USD - The market has gone parabolic over the past 24 hours with the price surging through the latest topside barriers at 1.3700 ahead of the latest minor pullback. Daily studies are now showing well overbought with the RSI above 70. However, given the intensity of the move, there is still scope for additional upside before a much needed and healthy pullback can take place. Next key resistance comes in by 1.3800 (8Jan high), with acceleration on a break to 1.3850-1.3900 (61.8% of 1.4720-1.2455/200-Day SMA). Back under 1.3415 is required to delay. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/JPY - The market has now reached its measured move objective off of the head & shoulders top by 99.70, and after slightly exceeding the previous 2009 high/major double neckline by 94.60 to 93.55, should finally found some support. There is a confluence of support by current levels in the form of the previous double bottom neckline, the 50% fib retrace off of the 87.15-99.70 move and the 50/100-Day SMAs. As such we would look for a fresh medium-term higher low to carve out at current levels ahead of the next major upside extension beyond 100.00. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
GBP/USD - Although the pair has now broken back above the 50-Day SMA, rallies above the moving average have proved to be fleeting since the onset of the major downtrend back in August 2008. The overall structure is still grossly bearish and a break back above the 1.4990 medium-term lower top from February 9 would ultimately be required to shift the structure. Daily studies however still show room to run with the next key resistance coming in by the 100-Day SMA at 1.4675. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Usd/Chf - The latest sharp pullbacks below 1.1315 have signaled an end to the multi day range and opened the door to the current drop back to 1.1165 thus far. However, the pair should find some decent support at current levels in the form of the 50% fib retracement off of the 1.0370-1.1970 move (1.1170) and the 200-Day SMA (1.1195). Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/CAD - Despite the recent decline, the overall structure remains quite constructive with the current pullback still classed as corrective. Setbacks have broken down through the 61.8% fib retrace off of the 2009 low-highs and the 100-Day SMA at 1.2370 but are now struggling to establish below these levels. We are now looking for a medium-term higher low by current levels and above 1.2025 (28Jan low) ahead of the next upside extension beyond 1.3065. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
AUD/USD - The daily chart is looking far more constructive today with the market potentially attempting to carve out a major bottom by 0.6005 (27Oct low). There is scope now for additional upside back towards the 0.7270 2009 highs over the coming days, but ultimately we would once again expect to see renewed selling by 0.7270 with the overriding trend still grossly bearish and the daily charts overbought. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
NZD/USD - Daily studies are just crossing into overbought with the RSI now kissing the 70 level. The current rally has also stalled by the 61.8% fib retrace off of the 2009 low-highs by 0.5600 and the risks from here are for a pullback and resumption of the broader downtrend. However, given the nature of the price action in the markets, we will remain sidelined until a better opportunity presents itself. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Written by Joel Kruger, Technical Currency Analyst 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.
Joel Kruger publishes 6 daily pieces:
Tech Talk - A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
Morning Slices - Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes Trade of the Day).
Monday-Friday (between 6:30am-7:30am EST)
Indicator of the Day - A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
Cross Country - A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)
Scandi Daily - A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
Daily Classical - A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)