•Euro well supported ahead of 200-Day SMA
•Dollar/Yen bounces by Ichimoku cloud bottom; bullish outside day
•Cable still locked in rare up and down trading sequence
•Dollar/Swiss rally stalls out; eyes retest of recent trend lows
|EUR/USD - Setbacks on Monday towards the 200-Day SMA have been very well supported with the market bouncing from daily lows by 1.3420 back to and above daily opening levels by 1.3495. Overall in the short-term, we continue to see dips limited, with the risk for a fresh push higher to challenge and break above the key trend highs at 1.3740. Once 1.3740 is broken, we will then look to establish USD long positions in anticipation of a more medium-term USD rally. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|USD/JPY - The bottom of the Ichimoku cloud has proved to be a formidable support for now and the pair has reversed course sharply to put in a bullish outside day on Monday. Look for an interim low by 94.55 and fresh upside over the coming days back towards the 96.70-97.85 zone. Only back under 94.55 negates and exposes deeper setbacks. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|GBP/USD - Market price action remains extremely choppy with the pair failing to show any follow through from previous daily momentum. Since May 6, it has been up-down-up-down-up-down-up-down-up. We retain a mildly bullish bias and given the proximity to the 2009 highs from early January, we see no reason why this level won't be tested over the coming hours. Only a break back below 1.5060 will however delay the recovery structure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
|USD/CHF - Some very interesting price action in the pair with all relevant moving averages coiling, a sign that we could be nearing a major breakout. Our bias is for a major upside break but we can not rule out the possibility for additional setbacks towards the 1.0865 area before the rally occurs. Any dips to 1.0865 over the coming sessions will be used as a buy opportunity. Price action has been extremely constructive on Friday but the market will need to break back above 1.1450 to officially take the pressure off of the downside. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.|
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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