EurUsd Despite the slide in EURUSD at the start of this week, we feel the dip into 1.3400-50 territory (hitting a low of1.3428) is a fantastic development for us bulls. We have been waiting for this retracement for nearly 2 weeks (see earlier FX Technical Reports) to reload longs with confidence and look once again at targeting the lofty 1.4000 levels (and that 1.4035 cup and handle target from late January). Initially, our focus is on beating the next topside resistance of 1.3570 (11 Feb high which has already been touched once this morning), but then we have clear path above until 1.3744 (9 Feb high), 1.3861 (2 Feb high), and 1.3896 (61.8% fibonacci retracement of 1.5145 to 1.1876). In the meantime we expect decent support to still lurk around 1.3538 (100-day moving average), 1.3428 (14 Feb low), 1.3397 (20 Jan low), and 1.3245 (17 Jan low).
GbpUsd Wowzers! CPI at 4.0% YoY?? I'll eat my hat if there's no BoE hike within the next 3 months. Needless to say, GBPUSD bullishness is the major theme we're following; having filled our boots with GBPUSD longs around 1.6030-50 we're feeling very confident about the prospects -not only does the fundamental picture look more favourable, but also the1-month uptrend channel is very much alive and kicking. 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). Buyers on dips are likely to first emerge around 1.6120 now (where an overnight retracement found its floor), then 1.6040 (lower edge of uptrend channel), 1.6008 (yesterday's low), 1.5965 (11 Feb low), 1.5823 (31 Jan low), 1.5751 (which caught the sell-off after the GDP release), and 1.5718 (13 Jan low).
UsdJpy USDJPY's rally is still going strong, and after hitting a high of 83.91 yesterday we can see a bullish engulfing candlestick printed on the daily chart -a pattern which tends to suggest the bulls are in command. Should we break above that 83.91 high water mark today, then we'll be looking for a re-test of the formidable old range ceiling from early December at 84.40. This 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. Next levels beyond come in at 85.40, 85.95 and 86.90. On the downside, first support will be 83.55 where the lower edge of a 2-week uptrend channel is expected to attract bidders; beyond there expect pockets of demand at 83.10 (14 Feb low), 82.20 (9 Feb low), 81.77 (8 Feb low) and 81.13 (4 Feb low).
UsdChf Since the 2 week uptrend channel broke down at the start of the week, USDCHF has slumped lower, and is now probing 0.9620 support. First level below there is now eyed at 0.9555 (9 Feb low), followed by 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. On the topside, sellers will probably start to precipitate around 0.9730 (yesterday's high), and the key resistance remains at 0.9784 (11 Jan high). Above there, we'd be looking to print new 2011 highs, as the following resistance levels have not been touched since late 2010. The first of these is 0.9850 (12-13 Dec highs), 0.9915 (8 Dec high) and 0.9950 (3 Dec high).