•Euro head & shoulders top triggers; projects deeper setbacks towards 1.3250
•Dollar/Yen still stuck in some bullish consolidation
•Cable in the process of carving out major double top
•Dollar/Swiss lagging with the market yet to trigger inverse head & shoulders
EUR/USD - The much talked about head & shoulders top developing over the past few weeks has finally triggered on Monday and now projects additional declines towards 1.3250 over the coming weeks. Look for any rallies to now be very well capped ahead of 1.4000, ahead of a drop back to challenge next support in the 1.3585-1.3730 area. Strategy: SIDELINED FOR NOW; LOOK TO SELL.
USD/JPY - The break of shorter-term trend-line resistance off of the 2009 highs 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 - Prospects for a major double top are looking more encouraging on Monday with the market showing good follow through from Friday's bearish reversal day. Look for a clear break below 1.6240 to now accelerate declines back towards the critical neckline at 1.5800, with a break to trigger the major topping formation. This will ultimately project additional setbacks towards the 1.5000 area over the coming weeks. Any rallies should now be well capped ahead of 1.6500. Strategy: SIDELINED FOR NOW; LOOK TO SELL.
USD/CHF - Setbacks have stalled out by 1.0650 in the previous week, 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 session. The result has been the formation of a potential inverse head & shoulders pattern that ultimately projects upside back towards the 1.1400 area over the coming weeks. Look for a break above 1.1000 to confirm and accelerate gains. Only back under 1.0650 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.
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)