• Euro well capped by final barrier ahead of yearly high
• Dollar/Yen gains expected to stall by 50-Day SMA
• Cable caught in choppy trade within defines range
• Dollar/Swiss propped yet again on dips towards yearly low
EUR/USD - The latest rally has stalled out by 1.4300 on Monday and just ahead of the key 2009 highs by 1.4340 from June 3. At this point, we would have a hard time seeing the market stall out without a retest of 1.4340, and any weakness into the 1.4100's is sure to be met with some formidable buy interest. The key level to watch below comes in by 1.4120 with only a break here to take pressure off of the topside and force a shift in the short-term structure. In the interim, we will stand aside. STRATEGY: SIDELINED FOR NOW; AWAIT CLEARER SIGNAL
USD/JPY - Remains locked in a downtrend off of the yearly highs by 101.45 and a lower top is now sought out below 97.00, ideally by the 50-Day SMA at 95.55 ahead of the next drop. There is some solid internal trend-line resistance off of the 2009 highs which comes in just under 96.00 as well to provide additional reason for sell opportunities over the coming hours. STRATEGY: STAND ASIDE; LOOK TO SELL
GBP/USD -Despite the recent rally back into the 1.6500's we do not rule out the potential for a failure ahead of 1.6745 as we still hang on to the possibility for the formation of the right shoulder of a very loose and messy head & shoulders top. Look for any additional rallies over the coming sessions to stall out ahead of 1.6700 in anticipation of a major pullback. Only back above 1.6745 negates and gives reason for pause. STRATEGY: STAND ASIDE; LOOK TO SELL
USD/CHF - In the process of attempting to carve out a meaningful medium to longer-term base by 1.0590. However a period of choppy consolidation still needs to be convincingly broken to the topside to confirm basing prospects and open a recovery extension back towards the 1.1500 area. The key medium-term level to watch above comes in by the recent highs at 1.1025 and break of this level will help to confirm our bullish outlook. In the interim, back above 1.0775 will help to take pressure off of the downside. Below 1.0590 negates. STRATEGY: SIDELINED FOR NOW; LOOK TO BUY
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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