•Euro remains constructive while above 1.3550
•Dollar/Yen extend declines; 4th consecutive negative close
•Cable continues with up and down chop but sequence of daily higher lows still intact
•Dollar/Swiss needs to break back above 1.1110 to take pressure off of the downside

EUR/USD

EUR/USD - Has managed to extend gains again on Wednesday to 1.3725 before finally stalling out and pulling back into the latter half of the day. However, while the pair remains supported above 1.3550, we retain a mildly bullish bias and look for a full retracement of the March-April move back to 1.3740. Daily studies are approaching overbought and any moves beyond 1.3740 will likely set up a good opportunity to short the pair. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.3800

R3

1/8 high

1.3740

R2

3/19 high

1.3725

R1

5/13 high

Level

Support

Details

1.3555

S1

5/11 low

1.3475

S2

5/7 high

1.3400

S3

Figure

USD/JPY

USD/JPY - Daily studies are mixed but the market continues to extend declines for the 4th consecutive day. Key levels to watch above and below now come in by 96.70 and 95.60 respectively, but we do not recommend taking any positions until a clearer opportunity presents. Our strategy will be to wait for studies to either show overbought or oversold before looking to enter the market. Deeper setbacks to 95.00-95.60 are favored over the coming hours. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

97.85

R3

5/12 high

97.25

R2

5/11 low

96.70

R1

5/13 high

Level

Support

Details

95.60

S1

4/28 low

95.00

S2

Psychological

94.15

S3

3/20 low

GBP/USD

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. However, consecutive daily higher lows leaves us with 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 hours. A break back below 1.5075 will however delay the recovery structure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.5535

R3

11/25 high

1.5375

R2

1/8 2009 High

1.5350

R1

5/12 high

Level

Support

Details

1.5075

S1

5/12 low

1.4980

S2

5/5 low

1.4755

S3

5/1 low

USD/CHF

USD/CHF - The market has finally broken down through critical psychological barriers at 1.1000 on Wednesday to 1.0975 ahead of the latest minor bounce. It now seems as though we have entered a bearish consolidation phase ahead of the next drop below 1.0975. Below 1.0975 should open a direct retest of the 1.0865 higher low from early January. Back above 1.1110 is required to take the pressure off of the downside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.1245

R3

5/5 low

1.1165

R2

3/19 low

1.1110

R1

5/12 high

Level

Support

Details

1.0975

S1

5/13 low

1.0865

S2

1/8 low

1.0800

S3

Figure

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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Daily Classical - A Daily Technical Overview of the Major Currencies.
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