EurUsd Much the same picture as yesterday for EURUSD. The cup and handle pattern we are playing on the hourly chart is still over 100 pips in the money; but there is still quite a way to go until the ambitious target of 1.4035. We have now drawn a very short-term uptrend on the last week's price action (connecting the 14 Jan high with yesterday's peak), and intend to use the lower edge of this channel as a guide for our stop. Given the immense distance to the target there's obviously plenty of levels noted on the topside before us; yesterday's high 1.3539 is the first, followed by 1.3635 (23 Nov high), 1.3785 (22 Nov high), 1.3825 (10-11 Nov highs), and 1.3975 (9 Nov high). Supports are noted at 1.3310 (lower edge of 1-week uptrend), 1.3245 (Monday's high) and 1.3145 (12 Jan high former resistance).Below there we have a large gap before major support at 1.3085 (the 29 Dec pivot and 13 Jan low).

 

GbpUsd It's certainly been a bullish couple of weeks for GBPUSD, but there have been signals in the past 24 hours that a short-term, bearish adjustment is underway. The first indication was this morning's downside breach of the 2-week uptrend channel which punctured 1.5940 levels. The second can be seen on inspection of the daily chart; where a shooting star candlestick is clearly printed yesterday. Although this does suggests a bearish move is on the way, we do still like the prospects for GBPUSD to trade higher over the medium term, so will be viewing any ensuing sell-offs with an eye to buying the dip. Other buyers on dips are likely to be everywhere, so watch for near-term support at 1.5835 (17 Jan low), 1.5810 (14 Jan low), 1.5785 (former resistance now turned support), and 1.5718 (13 Jan low). The topside is looking very clear for further progress, with this week's 1.6060 high and 1.6095 (19 Nov high) being the only two levels of note ahead of 1.6185 (9, 10 & 12 Nov triple-high).

UsdJpy USDJPY still feels heavy, and whilst 82.35 caps, the downside is looking vulnerable to further erosion. One adjustment we have made to the hourly chart is to alter the slope of the 2-week downtrend to better encapsulate the recent moves, and now expect the lower edge of that trendline to come into play around 81.70-75 today. As mentioned already a couple of times this week, we were expecting the pair to a return to 81.70 (4 Jan European/US session low) due to the break of 82.35; but the confluence of both the downtrend channel and that 4 Jan prior support does suggest a higher probability that a bounce will materialize off that point. First resistance is the aforementioned 82.35 pivot, then 82.83 (Tuesday's high & the upper edge of our 2-week downtrend) , 83.05 (14 Jan high), 83.50 (11 Jan high), 83.70 (7 Jan high), and the formidable old range ceiling from early December at 84.40. This latter level managed to contain numerous rallies back on 29 Nov, 1 Dec, 2 Dec, 8 Dec, 13 Dec and 16 Dec -so it's likely to be a stubborn barrier should we manage to get back up there. Should the downward momentum persist, there is the possibility of an extended move to 80.95 (31 Dec low), 80.24 (31 Oct low), and the all-time low from 1995 at 79.75.

UsdChf Our bearish conviction has been rewarded in the past 24 hours, as the squeeze above 0.9600 proved to be only a short-term distraction before another bearish slump to fresh lows of 0.9520. Regular readers will recall that we are short USDCHF after the activation of 2 bearish patterns on the hourly chart -suggesting further downside to come. The first is a bearish flag pattern with a target around 0.9480, and the second is a head and shoulders pattern which has a neckline around 0.9605 and a target at 0.9425. For those that missed the initial break-out, yesterday's rebound provided a second bite at the cherry, and now we are all aboard for a trip below 0.9500. Only support noted on the horizon is 0.9530 (former resistance now turned support) as beyond there we have nothing until the all-time lows of 0.9301 seen on 31 Dec. Resistance levels to watch on the topside now stand at 0.9687 (14 Jan high), 0.9784 (11 Jan high), 0.9850 (12-13 Dec highs) and 1.0065 (1 Dec high).