• Euro extends gains after easily taking out 1.3740 trend highs
• Dollar/Yen testing 100-Day SMA and bottom of Ichimoku
• Cable rips through 200-Day SMA and breaks above 70 on the daily RSI
• Dollar/Swiss eyes next drop to 1.0865

05-20-09-Dclassic01

EUR/USD



EUR/USD - Has finally taken out the key 1.3740 trend highs to trade just shy of 1.3800 thus far. From here, while there is scope for additional upside, we see the more medium-term risks for the formation of a top in the 1.4000 area ahead of a major USD bull run. Next key resistance comes in by 1.3850 which represents the 61.8% fib retrace off of the 1.4720-1.2455 move. We will look to sell a failure ahead of this level. Strategy: SIDELINED; AWAIT CLEARER SIGNAL

Level

Resistance

Details

1.3965

R3

1/5 high

1.3840

R2

1/2 high

1.3795

R1

5/20 high

Level

Support

Details

1.3670

S1

5/19 high

1.3585

S2

5/20 low

1.3530

S3

5/19 low

USD/JPY



USD/JPY - One again testing the bottom of the Ichimoku cloud and 100-Day SMA. The market has drifted slightly below both indicators and threatens to force a bearish shift in the structure. However, we would recommend standing aside for now with the potential from here also for an upside reversal should the 100-Day and Ichimoku support on a close basis. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

96.70

R3

5/19 high

96.25

R2

5/20 high

95.90

R1

5/19 low

Level

Support

Details

94.55

S1

5/18 low

94.15

S2

3/20 low

93.55

S3

3/19 low


GBP/USD



GBP/USD - After breaking the up and down consolidation of the past several days the market has been in sharp rally mode taking out the 200-Day SMA for the first time since late July 2008. However, any additional gains are seen limited with daily studies now highly overextended after the RSI just crossed above 70.0. Fresh shorts are in play in anticipation of a significant corrective pullback. Position: SHORT @1.5655 FOR A 1.5265 OBJECTIVE, STOP @1.5855. Stops to be trailed to cost on a break back below 1.5605. If 1.5605 not broken, position to be closed out at NY close (5pm NY time) on Wednesday.

Level

Resistance

Details

1.5885

R3

11/10 high

1.5800

R2

Figure

1.5725

R1

12/17 high

Level

Support

Details

1.5525

S1

5/19 high

1.5450

S2

5/18 low

1.5295

S3

5/19 low


USD/CHF

USD/CHF - Has broken to fresh multi-day lows on Wednesday below the recent 1.0975 lows to expose deeper setbacks to 1.0865 over the coming days. Daily studies still show room to run and only a break back above 1.1130 will delay and potentially shift focus back on topside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

1.1165

R3

5/19 high

1.1130

R2

5/20 high

1.1070

R1

5/19 low

Level

Support

Details

1.0970

S1

5/20 low

1.0900

S2

Figure

1.0865

S3

1/8 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.

Joel Kruger publishes 6 daily pieces:

Tech Talk - A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)

Morning Slices - Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes Trade of the Day).
Monday-Friday (between 6:30am-7:30am EST)

Indicator of the Day - A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)

Cross Country - A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)

Scandi Daily - A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)

Daily Classical - A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)