Euro finally set for close above 20-Day SMA. Dollar/Yen breaks below 10-day SMA; Short @98.25. Cable still bearish despite potential up-day. Dollar/Swiss holding above 100-Day SMA; stops trailed for profit. Dollar/Cad fails to establish downside momentum. Australian Dollar well capped above 0.6500. New Zealand Dollar needs to break above 0.5095 for structural shift.
EUR/USD - The market has once again broken back above the 20-Day SMA on Wednesday and could finally be ready for a close above the indicator that has capped on a close basis since early January. This would be a bullish signal and likely open the door to a more significant corrective rally over the coming days towards next key topside resistance by 1.2905-95 (25/23Feb highs). A break back below Wednesday's low at 1.2615 will now be required to shift focus back on the downside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/JPY - Short trade was triggered earlier in the day and the pair looks like it could be on the verge of a more significant decline over the coming days with stochastics rolling over and the market looking to close below the 10-Day SMA for the first time since January 27. Also seen weighing is the formation of a potential head & shoulders top on the hourly chart which would be confirmed on a break below 96.55, exposing a retest of the previous 2009 high/major double bottom neckline by 94.60. Position: SHORT @98.25 FOR A 96.55 OBJECTIVE, REVISED STOP @98.25.
GBP/USD - Price action has been constructive on Wednesday with the market attempting to put in the first bullish close 5 days. However, the overall structure remains grossly bearish and despite the up-day, we have still managed to put in a fresh daily lower low and lower high. A break back above 1.3905 would ultimately be required to take the focus off of 1.3500 and open a more sizeable corrective rally. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/CHF - The latest dips have once again been well supported in the 1.1400's with the market bouncing back above 1.1500 to keep the prominent range trade intact. The 100-Day SMA was breached on Tuesday but was once again unable to close below the SMA. Fresh longs have been triggered by 1.1465 and we now target a push back towards the range highs over the coming sessions. Position: LONG @1.1465 FOR A 1.1850 OBJECTIVE, REVISED STOP @1.1490.
USD/CAD - Inability to show any downside follow through from Tuesday's setbacks on Wednesday leaves the pair open to more bullish consolidation above 1.2700 and keeps the focus on the topside. The key levels to watch over the coming session come in by 1.3065 and 1.2715 with a break above or below required for clearer directional bias. Ultimately our longer-term bias is bullish, but we can not rule out the possibility for a shorter-term corrective pullback in the 1.2500's. Strategy: BUY @1.2585 FOR A 1.3065 OBJECTIVE, STOP @1.2335.
AUD/USD - The bullish reversal day from Tuesday has taken the pressure off of the downside for now with the price action opening the door for some upside back towards 0.6555. However, with price action still so choppy and the underlying trend firmly bearish, we continue to stay on the sidelines until a more compelling opportunity presents itself. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
NZD/USD - The overriding bear trend remains intact with any rebounds showing little to no follow through. The market has failed to materially extend gains after last Wednesday's strong bullish outside day to once again put the focus back on the downside, exposing a retest and break of the multi-year trend lows from Wednesday at 0.4895. Below 0.4895 opens a more significant drop back towards the August 2002 lows in the 0.4500 area. Only back above 0.5095 delays. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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