EurUsd Surprisingly, EURUSD has held up rather well in light of the Italy downgrade, with the pair consolidating between 1.3587 and 1.3721, rather than selling off as we would expected. This could be an early sign of an oversold market, but until we get some other indicators that a squeeze is on the way, the broader trend is undeniably bearish so the downside seems the more vulnerable.. The next technical levels below are still noted at 1.3558 (13 Sep low), 1.3496 (12 Sep low), 1.3461 (15 Feb low), and 1.3428 (14 Feb low). Resistance is now expected to materialize around 1.3721 (yesterday's high), then 1.3775-85 (trend line resistance off the 12 & 14 Sep lows), 1.3937 (9 &15 Sep high), and 1.4148 (7 Sep high).

GbpUsd GBPUSD touched a low of 1.5633 yesterday afternoon, but since then the pair has managed to recover back above 1.5700 - in spite of some unsettling news out of neighbouring Europe (Italy downgrade). The 4-week downtrend channel is still in play for now, so we expect this rally to struggle as it approaches some of the key resistance levels overhead. First resistance on the topside is now 1.5757 (this morning's high), followed by 1.5805-15 (upper edge of the current downtrend channel), and 1.5886 (12 Sep high). Only a break above that latter level would compel us to believe that a bullish reversal is on the cards. We expect some weak demand at 1.5633 (yesterday's low), before we see a big gap until next supports. The lower edge of the 4-week downtrend channel is currently 1.5520-30, backed up by 1.5513 (11 Jan low) and 1.5476 (10 Jan low).

UsdJpy USDJPY bears are start to a little bit more active this week, as the pair dipped to lows of 76.33 in the late European session yesterday. The size of the move may have been modest (65 pips high to low), but the significant thing is that this sell-off managed to break through a major support zone around 76.40-50 (multi-low support from the last week of August). Given the break of downside support and the overarching downtrend still in play, focus now turns to when we might re-test the all-time low 75.96 (set on 19 Aug), and perhaps even kick-on to challenge the major psychological barrier 75.00. First resistance should now appear around 76.98 (this week's high just after the Asian open), 77.30-40 (12 Sep US session high & 15 Sep high), 77.86 (9 Aug high), 78.47 (8 Aug high), and 79.42 (5 Aug high).

UsdChf USDCHF has struggled to extend its gains at the start of this week, with the pair failing yet again to hold above the 200-day moving average (currently 0.8820), and the 14-day RSI toying with overbought levels. Resistance now stands at 0.8875 (yesterday's high), with further levels at 0.8940-45 (13-16 May highs), 0.9012 (19 Apr high), and 0.9296 (6 Apr high). Should we start to slide back lower, then expect the sell-off to meet first support at 0.8796 (yesterday's opening low), 0.8648 (15 Sep low), and 0.8540 (the post SNB intervention low).