EurUsd Very little change in the EURUSD picture today, as a quick breach of the 2-3 week uptrend channel yesterday (around 1.3590) proved to be merely a temporary lull, and we have since watched the pair pick up the bullish momentum once again and hit highs of 1.3704. After going long on the break above 1.3330 last week (the activation of a cup & handle pattern on the hourly chart), we finally took our profits off the table at 1.3580 -taking our cue from the breach of the 2-3 week uptrend. Clearly, those who chose to hold on in spite of that breach have done very well, but we are by no means disheartened with our 250 pips profit, and now are happy to wait for a correction for buy-on-dips opportunities. The overall target for the head & shoulders is still some way off at 1.4035 so we are certainly of the belief that more upside is possible in the coming weeks. On the topside, next resistance is today's high 1.3704, then 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 Yesterday's shocker of a GDP print has been a game changer for GBPUSD; wiping away the potential ascending triangle we highlighted in yesterday's report (thankfully it never activated so we were not lured into a long trade), and sending us plummeting to lows of 1.5751. It's a marvel we have not plunged any further just yet, but things could be about to change as there is now a potential bearish flag pattern on the hourly chart which suggests an hourly close below 1.5775 would send us diving to a target around 1.5535 (estimated as the length of flag pole applied to the point of breakout). We are now vulnerable to a challenge of the key downside support 1.5718 (13 Jan low), and should we break lower, it would open up the path to 1.5585 (12 Jan low), our flag target 1.5535, 1.5515 (11 Jan low) and 1.5474 (10 Jan low). Former support around 1.5835-40 (17 & 20 Jan lows) now forms first resistance, and considering the earlier week's price action there should be a tremendous barrier of sellers ready to beat down any recovery rallies towards 1.6010-20 (20, 21, 24 & 25 Jan highs).

UsdJpy The heavy tone has returned to USDJPY this week, and we now find ourselves trading back below the 82.30 pivot level (having briefly dipped below 82.00 in yesterday's US session). The key level of support now on the horizon is 81.85 which coincides not only with the 19 Jan low, but also the lower edge of our current 3 week downtrend channel. Given the lack of momentum USDJPY has managed to muster, we expect a first test of that level will prompt a bounce; but should it drop lower, watch for next supports at 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. If the bulls step in again, 82.30 flips once again from support to resistance, and the upper edge of the downtrend has now crept down to 82.75. 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 Yet more good news for us USDCHF bears; after Monday's successful completion of the bearish flag pattern on the hourly chart, we have now also managed to reach the target of our head and shoulders pattern (entry: 0.9600, target: 0.9425), eventually hitting a low of 0.9404. With a 2-week downtrend channel still in force, there is plenty of scope for the pair to overshoot our profit targets, but we are certainly comfortable stepping away at this stage and waiting for a clear break into fresh downside before gambling on any more short trades. Only support noted on the horizon is that 0.9604 low seen late last night, 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).