Euro collapses to open the door for a drop back to the 100-Day SMA. Dollar/Yen gains stall but price action still favors push to 99.70. Cable seen back towards 1.3500 in coming weeks. Dollar/Swiss finally takes out key resistance; seen back to range highs. Dollar/Cad long trade triggered; targets 1.2765. Australian Dollar declines should accelerate following break below 0.6900. New Zealand Dollar potential double top carving out.
EUR/USD - The latest topside failure by 1.3740 has opened the door for a potential resumption of the broader downtrend with the market now looking to trade back down towards initial support by the 100-Day SMA at 1.3115. We expect this level to be tested into Monday/Tuesday as the market fills the gap from the parabolic move in the previous week. However, there are no compelling trade opportunities at current levels and we prefer to take to the sidelines for the time being. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/JPY - Although price action this week has been confined to the previous weekly range, we continue to hold a bullish bias and look for a direct retest of the 99.70 yearly highs over the coming week. A break above 99.70 should then trigger a fresh wave of buying above critical psychological barriers at 100.00 and towards the major double bottom (triggered on the break of 94.60 on 23Feb) measured move objective at 104.00. Dips should be well supported ahead of 95.45. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
GBP/USD - Remains confined to a very prominent bear channel with the latest corrective rally stalling out by the 100-Day SMA to potentially set up the next medium-term lower top at 1.4780 (24Mar high). Look for additional weakness over the coming weeks with an eventual retest and break of the key trend lows at 1.3500 (23Jan low) favored. Only back above 1.4780 negates. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/CHF -The pair was very well supported on the recent dip to 1.1165 (3Mar low) with the 50% fib retracement off of the 1.0370-1.1970 move (1.1170) and the 200-Day SMA (1.1200) propping. The risk from here is for a fresh upside extension back towards the range highs by 1.1970 over the coming weeks. Friday's break above 1.1345 confirms bullish bias. However, we would expect to see some initial resistance in the 1.1500's with the 20/50/100-Day SMAs all converging above the figure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/CAD - Despite the recent decline, the overall structure remains quite constructive with the current pullback classed as corrective. Setbacks had broken down through the 61.8% fib retrace off of the 2009 low-highs were unable to establish below, resulting in Friday's push back above the 1.2365 short-term consolidation highs. We are now looking for a medium-term higher low by 1.2190, ahead of the next upside extension beyond 1.3065. Our long recommendation from Thursday was triggered. Position: LONG @1.2365 FOR A 1.2765 OBJECTIVE, STOP @1.2165.
AUD/USD - The market has stalled out by the 78.6% retrace (0.7050) off of the 2009 high-lows looks to be in the process of rolling back over for a resumption of the broader downtrend. Friday's bearish price action and break below 0.6905 should accelerate declines back towards the 20/100-Day SMAs in the mid-0.6600's. Only back above 0.7095 negates and exposes retest of the 0.7270, 2009 highs. We will look for opportunities to sell into rallies. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
NZD/USD - The break to fresh multi-year highs on Thursday appears to have been a false break, with the market reversing course on Friday after failing by the 78.6% fib retrace off of the yearly high-lows. There is now the potential for the formation of an inter-day double top, which if broken by the neckline at 0.5550, would project deeper setbacks to 0.5300 by the 20-Day SMA. The daily RSI has only just now broken back under 70 and there is plenty of room for additional pullbacks in the days ahead. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Written by Joel Kruger, Technical Currency Analyst 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)