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, and 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. Despite the bullish price action on Thursday, the market is still confined to an inside day. Strategy: SIDELINED FOR NOW; LOOK TO SELL.
USD/JPY - The break of shorter-term trend-line resistance off of the 2009 highs last 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 - The intense rally on Thursday has now broken above the 78.6% fib retrace off of the 1.6665-1.5800 move and while we continue to favor USD strength over the medium-term, a close above 1.6475 today will likely expose a retest of the 1.6665 2009 highs from the previous week. However, any rallies above 1.6600 are not seen as sustainable and a double top scenario could play out on the daily chart with a break below neckline support at 1.5800 to open a measured move objective back to the 1.5000 area. Will only grow concerned on a close above 1.6665. Position: SHORT @1.6450 FOR A 1.5800 OBJECTIVE, STOP 1.6750.
USD/CHF - Setbacks have stalled out ahead of 1.0700, which also coincides with previous resistance now turned support, and a fresh higher low is now sought out, 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 potential inverse head & shoulders pattern that ultimately projects upside back towards the 1.1400 area over the coming weeks. Only back under 1.0700 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 email@example.com and you will be added to the distribution list.
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Indicator of the Day - A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
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