EurUsd Since the break of the 3-week uptrend on Thursday, EURUSD has slumped progressively lower; and even hit lows of 1.3544 on Friday after an unexpected drop in US unemployment. With the uptrend negated, there's certainly scope in the very short-term for further liquidation of speculative longs - indeed we feel such a correction would be beneficial to clear out some of the overextended positioning before another leg higher. For now, next supports are 1.3540 (24 Jan low), 1.3527 (100-day moving average), 1.3397 (20 Jan low), and 1.3245 (17 Jan low). In spite of our shift to a neutral-to-mildly bearish stance in the short-term, we still hold a very bullish bias over the medium- and long-term so would be looking to reload longs back towards 1.3400. Key levels to beat on the topside will be 1.3679 (spike high after the NFP release on Friday), 1.3760 (back side of 3-week uptrend), 1.3861 (2 Feb high), 1.3896 (61.8% fibonacci retracement of the entire sell-off from 1.5145 to 1.1876), 1.3975 (9 Nov high), and the psychologically important 1.4000 level.
GbpUsd GBPUSD was pushed to lows of 1.6037 on Friday afternoon, but since then, the pair has recovered to 1.6170 levels. Much like EURUSD, we feel that over the medium-term, GBPUSD will continue to be buoyed by eager buyers on dips, but in the very short-term, excess speculative long positioning may drag on the price action. Nevertheless, the broader uptrend channel is still in force, so we remain upbeat about the bulls' prospects; resistance levels remain sparse on the topside; the nearest on being 1.6300 (4 Nov high), with another long gap until 1.6460 (19 Jan 2010 high) and 1.6515 (7 Dec high). Should the market need a deeper correction lower to clear out stale longs then noted levels below us are Friday's low 1.6037 and 1.6005-20 (sticky area of former resistance). Other supports seen at 1.5823 (31 Jan low), 1.5751 (which caught the sell-off after the GDP release), and 1.5718 (13 Jan low).
UsdJpy The 1-month downtrend continues to assert itself as the dominant driver of USDJPY price action; catching the knee-jerk USD sell-off on Friday around 81.13, and providing a platform for the subsequent surge to highs of 82.46. This morning we find the bulls once again probing the highs, but so far they've been unable to muster the momentum to break higher. For those keen to respect the downtrend looking for opportunities to sell, current levels do look attractive; the upper edge of the 1-month downtrend is close at 82.80 which should act as protection. There's definitely plenty of room on the downside for the bears to attack; only very weak resistance at 82.15 (today's lows) is eyed before Friday's low 81.13. As that latter level still roughly coincides with the lower edge of the 1-month downtrend channel, we would expect a bounce higher on the first test. Should we break lower, next supports are 80.95 (31 Dec low), 80.53 (9 Nov low), 80.24 (31 Oct low), and the all-time low from 1995 at 79.75. Of course, if the bearish scenario does not come to fruition as we have outlined here, then watch for downtrend resistance to come into play at 82.80, then 83.00 (psychological resistance), 83.21 (27 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 on the first test.
UsdChf The wave of USD strength on Friday was just the catalyst needed to push USDCHF up to highs of 0.9594, not only smashing through the significant 0.9525 pivot level, but also hitting the 0.9580 target of our inverse head and shoulders pattern on the hourly chart. Next resistance levels are now eyed at 0.9595 (Friday's highs), 0.9625 (24 Jan high), 0.9687 (14, 20 & 21 Jan highs), 0.9697 (100-day moving average), 0.9784 (11 Jan high), and 0.9850 (12-13 Dec highs). Support levels from here are eyed at 0.9525 pivot level, 0.9455 (break-out level from that inverse head and shoulders pattern), 0.9395 (3 Feb lows), 0.9331 (low water mark for this sell-off which was printed on the 2 Feb), and the all-time low of 0.9301.