•Euro hourly H&S triggers but market not ready to break down
•Dollar/Yen breaches upper end of triangle resistance
•Cable shows good follow through from bearish outside day
•Dollar/Swiss attempting to base but not ready for upside break just yet

EUR/USD

EUR/USD - Finally showing signs of a legitimate short term top on Wednesday after just squeaking out fresh 2009 highs by 1.4340 ahead of the latest sharp pullback. Thursday's break below 1.4100 confirms with the trigger of an hourly h&s top and opens deeper setbacks towards initial support at 1.4050, with a break accelerating and exposing 1.3790 further down. Only back above 1.4340 negates. We are short with an objective by the measured move projection off of the h&s break. Position: SHORT @1.4210 FOR A 1.3900 OBJECTIVE, STOP @1.4365.

Level

Resistance

Details

1.4365

R3

12/29 high

1.4340

R2

6/3 09 high

1.4245

R1

6/4 high

Level

Support

Details

1.4100

S1

6/1 low

1.4070

S2

6/4 low/10-Day

1.3985

S3

5/28 high

USD/JPY

USD/JPY - The market has been well offered over the past several weeks but setbacks have stalled out just shy of next key support by 93.55 from March, which guards against the critical 87.15 multi-year trend lows. We have seen a contraction in volatility over the past few sessions, taking the form of a triangle, which suggests that a breakout looms. The market has marginally breached triangle resistance on Thursday which could now open an upside break beyond 97.25 over the coming session. No positions at this time but we retain a mild bullish bias. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

97.85

R3

5/12 high

97.25

R2

5/28 high

96.90

R1

6/4 high

Level

Support

Details

95.85

S1

6/4 low

95.30

S2

6/2 low

95.00

S3

5/29 low

GBP/USD

GBP/USD - Continues with the impressive correction off of the 2009 highs set by 1.6665 on Wednesday, with the market pulling back to 1.6085 thus far ahead of the latest minor bounce. The daily RSI has only just rolled over from overbought and there is scope for additional declines over the coming sessions back towards next support which comes in by 1.5920-1.6000. We booked profit on half of our position earlier in the day and will hold the remaining half for now with a revised stop at cost. Position: SHORT @1.6407 FOR AN OPEN OBJECTIVE, STOP ON A NY CLOSE ABOVE 1.6687.

Level

Resistance

Details

1.6665

R3

6/3 09 high

1.6600

R2

6/2 high

1.6435

R1

6/4 high

Level

Support

Details

1.6085

S1

6/4 low

1.6015

S2

5/28 high

1.5920

S3

5/29 low

USD/CHF

USD/CHF - Setbacks have been very well supported by 1.0590 and the market has reversed course to suggest that a base could now be in place. Daily studies show plenty of room to run with Thursday's break back above 1.0745 to accelerate and open a direct test of former support at 1.0800, above which opens a more significant upside extension to 1.0955. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.0860

R3

5/29 high

1.0805

R2

5/28 low

1.0765

R1

6/2 high

Level

Support

Details

1.0640

S1

6/4 low

1.0590

S2

6/2 09 low

1.0485

S3

12/30 low

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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