EurUsd The EURUSD rally is still progressing in a very orderly manner for us bulls, as the pair found decent bids ahead of its 2-week uptrend channel yesterday (around 1.3540) and rebounded strongly above 1.3635-50 which had formerly represented a sticky patch of resistance. We are still long from the break of 1.3330 (which activated a cup & handle pattern on the hourly chart), and are using the lower edge of the 2-week uptrend channel (connecting the 11, 12 & 20 Jan lows) as a guide for our stop. That trendline now comes in at 1.3590, so we have put our stop just below at 1.3580 -ensuring we will lock in at least 250 pips profit on this trade. Our target is still some way off at 1.4035, so setting such a tight stop does leave us vulnerable to getting stopped out prematurely and missing a subsequent move to the 1.4035 target. We however, are content with the healthy chunk of cash we've already made on this trade, and should a retracement break our 2-week uptrend, it would be no bad thing to allow for the position adjustment to run its course and look to re-load longs back around 1.3400-50. On the topside, next resistance is 1.3785 (22 Nov high), 1.3825 (10-11 Nov highs), and 1.3975 (9 Nov high). Supports are noted at 1.3540 (24 Jan low), 1.3397 (20 Jan low), 1.3245 (17 Jan low) and 1.3145 (12 Jan high former resistance).
GbpUsd GBPUSD remains in consolidation mode after repeated moves above 1.6000 have been suppressed by sellers between 1.6010-20 (20, 21, 24 & 25 Jan highs). This zone of supply has thus far hampered the pair's ability to re-test the 1.6060 highs (printed on 18 Jan), but we now see a potential ascending triangle pattern on the hourly chart which could provide the catalyst for a concerted move upwards. The key level remains that 1.6020 resistance, as a break above there (preferably an hourly close), would activate the pattern and set us a target above at 1.6190 (measured as the depth of the triangle applied to the point of break out). We do however note that there's a big resistance level lurking at 1.6185 (9, 10 & 12 Nov triple-high), so in order to avoid the sellers waiting there, we would elect to set a more conservative target around 1.6170. Levels eyed between here and that target are seen at 1.6060 (18 Jan high) and 1.6095 (19 Nov high). Near-term support still resides at 1.5835 (17 Jan & 20 Jan lows), but we would not be alarmed to see a deeper correction to 1.5810 (14 Jan low) or 1.5785 (former resistance now turned support) -indeed we'd probably see the latter as a good level to add some more. Our bullish bias might start to wane if we saw a serious challenge threaten the 1.5718 support (13 Jan low).
UsdJpy Yesterday morning USDJPY was poised just below the ceiling of its 2-3 week downtrend channel at 82.90, and looked like it had the potential to break higher. However, the bulls failed once again to gather the required momentum, and we have instead slumped firmly back into the middle of the channel's range around 82.50. The next support levels below us sit at yesterday's low 82.30, followed by 81.85-90 (where the lower edge of the current downtrend coincides with the 19 Jan low), 81.70 (4 Jan European/US session low), 80.95 (31 Dec low), 80.24 (31 Oct low), and the all-time low from 1995 at 79.75. Should the bulls step in again, the upper edge of the downtrend has now crept down to 82.80, and further resistance is noted at 83.12 (20 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.
UsdChf Success! After a rocky ride hanging on to our USDCHF shorts over the past week, we can finally celebrate the successful completion of our bearish flag pattern and arrival at our target 0.9480. Regular readers will recall we entered this position back around 0.9630, so that's nearly 150 pips of profit in the bank, and the target has proven to be inch perfect, as the pair only went as far as 0.9471 before having a rebound this morning. Of course, we are not entirely out of the woods yet as we are still playing the head & shoulders pattern which has a neckline around 0.9605 and a target at 0.9425; but we now feel confident enough to trail the stop on this second position to 0.9570 (back side of a very short-term uptrend channel), thereby guaranteeing this strategy will also finish up in-the-money. Only support noted on the horizon is 0.9471 (today's low) before we will be staring down the barrel of the all-time low 0.9301 seen on 31 Dec. Should the bulls return, resistance levels come in at 0.9520 (former support turned resistance), 0.9687 (14, 20 & 21 Jan highs), 0.9784 (11 Jan high), 0.9850 (12-13 Dec highs) and 1.0065 (1 Dec high).