•Euro H&S top triggers and exposes pullback to 200-Day SMA
•Dollar/Yen testing Ichimoku clod support
•Cable still locked in rare up and down trading sequence
•Dollar/Swiss sharply reverse course but structure still bearish
|EUR/USD - The market is starting to show signs of rolling over after breaking below the neckline of an hourly Head & Shoulders topping formation that could project setbacks towards 1.3400 over the coming days. Ultimately however, we still see scope for additional upside before the next major USD bull run and prefer to look to buy on dips in anticipation of a break above 1.3740. The 200-Day SMA comes in the low 1.3400's as well which should strengthen case for solid support zone on dips to the figure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|USD/JPY - Continues to extend declines and has now broken back below psychological barriers by 95.00. While scope exists for additional setbacks over the coming days, we see pullbacks limited to the 93.55-94.15 area. Below 93.15 however will open the door for a more considerable drop potentially back towards the key longer-term trend lows by 87.15. Above 96.20 is now required to take pressure off of the downside. It is also worth noting that the pair is currently testing the bottom of the Ichimoku cloud. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|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-up-down. We retain 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 sessions. A break back below 1.5060 will however delay the recovery structure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|USD/CHF - Some very interesting price action in the pair with all relevant moving averages coiling, a sign that we could be nearing a major breakout. Our bias is for a major upside break but we can not rule out the possibility for additional setbacks towards the 1.0865 area before the rally occurs. Any dips to 1.0865 over the coming days will be used as a buy opportunity. Price action has been extremely constructive on Friday but the market will need to break back above 1.1450 to officially take the pressure off of the downside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
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 firstname.lastname@example.org and you will be added to the distribution list.
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