• Euro carving out major head & shoulders top
• Dollar/Yen bias favors additional upside beyond 100.00
• Cable stalls by key 78.6% fib retrace; lower top sought out
• Dollar/Swiss inverse head & shoulders suggestive of major base
EUR/USD - The latest rebound has stalled out by the 61.8% fib retracement off of the 1.4340-1.3805 move and former support turned resistance in the 1.4100 area, with the market rolling back over to suggest that a fresh lower top could now be in place ahead of the next drop through 1.3800. A closer look at an 8-hourly chart, shows the formation of a major head & shoulders top, that if triggered, would ultimately project a more significant decline back towards a measured move objective by 1.3250 over the coming weeks. Only back above Wednesday's high at 1.4145 delays. Strategy: SIDELINED FOR NOW; LOOK TO SELL.
USD/JPY - The break of shorter-term trend-line resistance off of the 2009 highs on Friday likely opens the door to additional upside over the medium-term, with any setbacks now seen well supported on dips to 97.00, which acts as previous resistance now turned support. Look for a higher low to carve out in the lower 97.00's ahead of fresh upside over the coming days back above 98.90 and towards the more critical falling trend-line resistance just over 100.00. Strategy: SIDELINED FOR NOW; LOOK TO BUY.
GBP/USD - Rallies have stalled out shy of the 1.6665 2009 highs from the previous week, with the 78.6% fib retracement off of the 1.6665-1.5800 capping gains ahead of the latest pullback. A lower top is now sought out by 1.6475 to be confirmed on a break back below 1.5800 over the coming days. Below 1.5800 will open deeper setback towards next support in the 1.5350-1.5500 area. Only back above 1.6475 delays. Strategy: SIDELINED FOR NOW; LOOK TO SELL.
USD/CHF - Setbacks have stalled out by the 61.8% fib retracement off of the recent 1.0590-1.0990 move, which also coincides with previous resistance now turned support, and a fresh higher low is now sought out by 1.0720 to be confirmed on a break back above 1.0990 over the coming sessions. The formation on the 8-hourly chart has taken the shape of a rough inverse head & shoulders pattern that ultimately projects upside back towards the 1.1400 area over the coming weeks. Only back under 1.0720 delays. Strategy: SIDELINED FOR NOW; LOOK TO BUY.
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.
Joel Kruger publishes 6 daily pieces:
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