•Euro looking to carve out fresh lower top ahead of next drop
•Dollar/Yen confined to inside day price action
•Cable mirrors Wednesday price action following whipsaw trade
•Dollar/Swiss well supported on dips; look to buy

06-18-09-DailyClass-Piv

EUR/USD


EUR/USD - Not yet ready to break down after triggering a major head & shoulders top on Monday. The market has since been gradually pushing higher and looks set for a test of falling trend-line resistance off of the 2009 highs which currently comes in by 1.4050. From there, we see a lower top taking form ahead of the next downside extension through 1.3750. Only back above 1.4175 however, gives reason for concern. Strategy: SIDELINED FOR NOW; LOOK TO SELL.

Level

Resistance

Details

1.4130

R3

6/12 high

1.4030

R2

6/15 high

1.4000

R1

6/18 high

Level

Support

Details

1.3905

S1

6/18 low

1.3750

S2

6/16 low

1.3670

S3

5/19 high

USD/JPY

USD/JPY - Although price action on Thursday is still confined to an inside day, the moves have been quite constructive and the market could be attempting to carve out a fresh higher low above 94.45 ahead of the next upside extension beyond 98.90 and eventually through psychological barriers by 100.00. However it is too early to tell at this juncture, and we will remain sidelined until a clearer opportunity presents itself. Strategy: STAND ASIDE; AWAIT CLEARER SIGNAL.

Level

Resistance

Details

97.90

R3

6/16 high

97.10

R2

6/10 low

96.80

R1

6/17 high

Level

Support

Details

95.55

S1

6/17 low

95.30

S2

6/2 low

94.45

S3

6/1 low

GBP/USD

GBP/USD - As per our commentary in the previous days, rallies have been well capped by 1.6500 and a fresh lower top is sought out by Tuesday's 1.6510 high ahead of the next drop back below 1.6185, and towards key double top neckline support at 1.5800. As expected, Tuesday's bullish outside day has failed to show any positive follow through, and we continue to favor additional weakness from current levels. Ultimately, only back above 1.6665 negates. Strategy: SIDELINED FOR NOW; LOOK TO SELL.

Level

Resistance

Details

1.6665

R3

6/3 2009 high

1.6620

R2

6/11 high

1.6510

R1

6/16 high

Level

Support

Details

1.6245

S1

6/15 low

1.6185

S2

6/18 low

1.6105

S3

6/8 high

USD/CHF

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 sessions. 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. Thursday's inside day (technically not inside day but only marginally breached Wednesday's low) price action suggests the market is consolidating ahead of fresh upside. Strategy: SIDELINED FOR NOW; LOOK TO BUY.

Level

Resistance

Details

1.0990

R3

6/8 high

1.0960

R2

6/16 high

1.0925

R1

6/17 high

Level

Support

Details

1.0765

S1

6/18 low

1.0685

S2

6/12 low

1.0650

S3

6/11 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.

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