EurUsd EURUSD's recovery managed to break above a minor downtrend channel yesterday, taking us to a high of 1.3744. The momentum has since waned however, and we are now waiting to see whether the back side of that former downtrend line (currently 1.3670) is able to rebut this sell-off. Should the trendline support give way, next supports will be 1.3611 (yesterday's low), 1.3539 (100-day moving average), 1.3510 (50% fibonacci retracement of 1.5145 to 1.1876), 1.3397 (20 Jan low), and 1.3245 (17 Jan low). We still hold a bullish bias over the medium-and long-term so would be looking to reload longs back towards 1.3400-50 area. Key levels to beat on the topside will be yesterday's high 1.3744, 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 Looking at today's hourly chart of GBPUSD, it's not clear whether the bulls or bears will win out, but there are certainly some exciting landmarks on the horizon that could give us a very good clue. The most obvious new insight we want to discuss is the appearance of a potential descending triangle pattern with a base at 1.6030 and a target of 1.5780 (measured as the height of the triangle applied to the point of break-out). Should this pattern activate, we'd naturally also expect the follow-through to cause a break of the reigning 1-month uptrend channel -a development which would almost certainly accelerate the liquidation of long positions.The lower edge of the current uptrend comes in today at 1.5970, with further 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). Nevertheless, until that triangle pattern activates and the uptrend is negated, we should view dips towards 1.6030 as opportunities to buy. Resistance levels remain sparse on the topside; the nearest one being 1.6185 (7 Feb high), then 1.6300 (4 Nov high), with another long gap until 1.6460 (19 Jan 2010 high) and 1.6515 (7 Dec high).
UsdJpy The grind higher in USDJPY has now resulted in a breach of the 1-month downtrend channel, taking us to a high of 82.72. The break has not however accelerated the upside momentum much at all so those playing this pair from the short side are still in with a chance. Should we get another push higher that exceeds today's current highs though, then we'd concede defeat and exit shorts for the time being. The next resistance levels eyed on the topside are 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. On the downside there is weak support at 82.20 (yesterdays' low), then 81.77 (Tuesday's low) and 81.13 (Friday's low). Very strong support is expected at 80.90-95 because it coincides with the 31 Dec low and the lower edge of the 1-month downtrend, followed by 80.53 (9 Nov low), 80.24 (31 Oct low), and the all-time low from 1995 at 79.75.
UsdChf Today's significant undershoot in Swiss CPI (0.3% YoY vs. 0.6% expected) has accelerated the USDCHF rally, ensuring the pair has stayed within its 1-2 week uptrend channel, and is en route to re-testing yesterday's high 0.9661. Once 0.9661 is beaten, key resistance lies at 0.9687 -however it is possible this latter level will be a tough barrier to beat as it not only represents the 14, 20 & 21 Jan highs, but also the 100-day moving average. If the bulls can get above there, it will be a lot easier to proceed higher as next resistance levels are not seen until 0.9784 (11 Jan high), and 0.9850 (12-13 Dec highs). Good bidders should emerge along the lower edge of the current uptrend (currently 0.9590) and 0.9525 (8 Feb low). Should we slump lower then watch for next levels at 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.