• Euro short gains momentum; profits booked and stops trailed
• Dollar/Yen well capped by 97.00; 93.55-85 back in focus
• Cable price action taking form of triangle; stand aside for now
• Dollar/Swiss attempting to carve material base
EUR/USD - More choppy trade in the final full session of the week with the market continuing to consolidate below the 1.4340 2009 highs set in early June. The bearish price action on Thursday would suggest that the market could be prepping for a more significant decline back towards 1.3750-1.3830, but a close below 1.4000 will be required to reaffirm our bearish outlook. A lower top is now sought out below 1.4340 at 1.4200 and only back above 1.4200 will negate. We have booked some profit on our short and have stops at cost on the remaining position. Position: SHORT @1.4180 FOR AN OPEN OBJECTIVE; REVISED STOP @1.4180. We booked profit on 1/5 of the position earlier at 1.4100.
USD/JPY - For now, it looks like the market is content on trading within a broad range, loosely defined between 94.00-100.00. The latest minor recovery from 94.90 has been well capped by 97.00 and Thursday's bearish reversal day suggest that the market could be poised for a fresh drop below 94.90 to challenge the critical trend lows by 93.55-85 from March and May respectively. Back above 97.00 delays. Strategy: STAND ASIDE; AWAIT CLEARER SIGNAL
GBP/USD - Still very difficult to determine in which direction the next major move will be. The market has now taken the form of a triangle with the price now nearing the apex and warning of the impending breakout. Key levels to watch above and below come in by 1.6185 and 1.6745 with a break ultimately required for clearer directional bias. We recommend staying on the sidelines until the appropriate opportunity presents itself. Strategy: SIDELINED FOR NOW; AWAIT CLEARER SIGNAL
USD/CHF - The market continues to attempt to carve out a meaningful base after posting 2009 lows by 1.0590 on June 2, with the most recent setbacks well supported on dips towards 1.0700. Look for fresh upside over the coming days back above 1.1025, with an acceleration expected on a break above initial resistance by 1.0900. Only back under 1.0590 ultimately negates recovery outlook. 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 firstname.lastname@example.org and you will be added to the distribution list.
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