• Euro still trying to put in lower top below 1.4200
• Dollar/Yen gains finally stall out; below 93.25 accelerates
• Cable gains limited ahead of 1.6500
• Dollar/Swiss well supported on dips to 1.0700
• Dollar/Cad could be in process of forming hourly double bottom
• Australian Dollar set for fresh downside extension after stalling by trend-line
• New Zealand Dollar putting in bearish inside day
• Sterling/Yen well offered after testing strong technical confluence of resistance
EUR/USD - While the break above the recent trend highs at 1.4075 on Wednesday is somewhat discouraging, we still retain our bearish bias and look for a lower top to carve out below 1.4200 ahead of the next major drop. The market is now testing a very solid technical confluence of resistance in the form of falling trend-line off of the 2009 highs, the 78.6% fib retrace off of the 1.4200-1.3830 move, and upper Bollinger. Only back above 1.4200 would give reason for pause. POSITION: SHORT @1.4180 FOR AN OPEN OBJECTIVE; BOOKED PROFITS ON 3/5 OF POSITION AND STOPS AT 1.4180 ON REMAINING 2/5
USD/JPY - The overall structure remains quite bearish with the market locked in a bear channel since positing 2009 highs by 101.45 back in March. As such any rallies should be used as sell opportunities in anticipation of an eventual depreciation back towards the 2009 multi-year lows by 87.15. The most recent recovery attempts out from 91.75 have already showed some signs of stalling on Thursday and a break below 93.25 should help to accelerate declines. Back above 94.45 however will temporarily delay and open additional corrective gains into the 95.00's. STRATEGY: STAND ASIDE; LOOK TO SELL
GBP/USD - We continue to hold an overall bearish bias in the major and view the current price action as toppish with the market attempting to carve out a medium-term high by 1.6745 ahead of a major downside extension back towards 1.5000 over the coming weeks. While the formation is somewhat questionable, we would argue that the market could be forming the right shoulder of a loose head & shoulders topping pattern to be confirmed on a break back below 1.5985. As such, look for any additional rallies to be well capped by 1.6500 with a break back below 1.6300 to help confirm bias. Ultimately, only back above 1.6745 would negate. STRATEGY: SIDELINED FOR NOW; 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 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. A close back under 1.0700 will however delay. STRATEGY: SIDELINED FOR NOW; LOOK TO BUY
USD/CAD - Setbacks on Thursday have failed to extend beyond Wednesday's 1.1120 lows after stalling just shy by 1.1125 ahead of the latest minor bounce. The market has been beaten down quite heavily over the past several days after dropping back from a previous weekly and multi-day high at 1.1725. However, longer term studies show the market well supported in the 1.1200 area and we would not rule out the potential for the formation of an hourly double bottom to be confirmed on the break back above 1.1230 over the coming hours. Above 1.1230 would then accelerate gains to a measured move objective into the mid-1.1300's. Back over 1.1350 would be officially required to relieve the current downside pressure. Below 1.1120 however negates and opens deeper setbacks to 1.0940-1.1000. POSITION: LONG @1.1205 FOR AN OPEN OBJECTIVE; STOP 1.1055
AUD/USD - Despite the current rally, we retain a bearish bias in the pair with a lower top now sought out by falling trend-line resistance off of the 2009 highs which currently resides in the 0.8100 area. The key level to watch above comes in by 0.8160, with only a break of this level to give reason for concern. STRATEGY: SIDELINED FOR NOW; LOOK TO SELL
NZD/USD - The latest topside failure above 0.6500 and ahead of 0.6550 helps to confirm our bearish bias and we look for a lower top to cow carve out by 0.6515 to be confirmed on a drop below 0.6195 over the coming days. Initially, a break back below short-term support at 0.6385 should get things moving to the downside, while only back above 0.6600 would ultimately give reason for concern. STRATEGY: SIDELINED FOR NOW; LOOK TO SELL
GBP/JPY - Our short recommendation from Wednesday just failed to trigger before the market reversed course as anticipated into Thursday. The topside failure coincides with previous channel support now turned resistance, along with the 20-Day SMA. We had also failed to cite two other formidable resistance points by 155.00 in the form of the 61.8% fib retrace off of the 160.30-146.80 move and the top of the Ichimoku cloud. From here, we look for continued weakness over the coming days with a drop back to 146.80 favored. Next support comes in by 152.40 and will need to be broken to accelerate. STRATEGY: SELL @155.30 FOR AN OPEN OBJECTIVE, STOP @157.30. STRATEGY: SIDELINED FOR NOW; LOOK TO SELL
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 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)
Midday Snapshot - A Midday Fundamental Update, along with Technical Analysis of Selected 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)
Visit the DailyFX Forex Stream for Real-Time News and Market Updates