EurUsd Sticking to our guns with long EURUSD positions proved to be the right strategy yesterday; the bears could only push us less than 10 pips below 1.3534-37 support (100-day moving average & 17 Feb low), before the pair squeezed sharply higher, and took us once more up above the range of the 3-week downtrend channel. Thus far the high on this move has been 1.3735; a mere 9-pips shy of the next significant resistance level 1.3744 (9 Feb high). If we can break above there, then next levels on the topside are eyed at 1.3861 (2 Feb high) and 1.3896 (61.8% fibonacci retracement of 1.5145 to 1.1876). Overall, we remain confident in our medium term view that EURUSD has the momentum and support for an eventual challenge on the psychologically important 1.4000 level. Nearest supports are 1.3635 (overnight low), 1.3528 (yesterday's low) and 1.3460 (15 & 16 Feb low). Indeed, we still feel that 1.3460 would be a decent area to add to longs, but would start to reconsider our bullish bias on a test of the neighbouring supports at 1.3428 (14 Feb low) and 1.3397 (20 Jan low).
GbpUsd It's all about buying on the dips in GBPUSD. Yesterday's retracement to lows of 1.6102 never looked close to threatening the dominant 1-month uptrend channel, and indeed the pair has now recovered strongly back onto the 1.6200 handle. With the much anticipated BoE Minutes coming up this morning the price action could get a little feisty, so it's worth recapping the key levels for GBPUSD. The main one to watch is 1.6300 resistance (4 Nov high) which the bulls have tried a couple of times to approach (back on 3 Feb & 20 Feb) but been swatted back down both times. If we can break higher then the route higher is cleared for a run at 1.6460 (19 Jan 2010 high) and 1.6515 (7 Dec high). Nevertheless, the GDP releases are due Friday which could also be volatile, so we'd certainly try and take profit on at least some of our longs around 1.6340-50 (where the upper edge of a 2-week uptrend comes into play). Buyers are anticipated to start appearing towards yesterday's lows of 1.6102, 1.6075 (17 Feb low), 1.6000 psychological support, 1.5965 (11 Feb low), 1.5823 (31 Jan low), 1.5751 (which caught the sell-off after the first GDP release), and 1.5718 (13 Jan low).
UsdJpy Our bearish trade strategy is going according to plan so far; after the break below 83.10 on Monday we went short and have been aiming at a target of 82.20 -in accordance with the head & shoulders pattern noted on the hourly chart. Thus far, the low on this move has been 82.53, so we feel happy trailing our stop down to 83.10 to ensure this is now a risk-free trade. The 82.20 target is particularly elegant because it coincides almost precisely with the 9 Feb low, but there is certainly scope for the bears to overshoot this target. If that's the case then next supports are noted at 81.77 (8 Feb low), 81.13 (4 Feb low) and 80.94 (31 Dec and 2 Jan lows). One option for those with a strongly bearish conviction might be to only take profit on half of their shorts at 82.20, and hold the other half position longer in the hopes of squeezing a little more juice out of the trade. At worst, the second half would be stopped out for no loss, but there'd still be profits banked on the first half. In the meantime, watch for resistance around 83.00-10 where our pattern first activated, then 83.55 (18 &21 Feb highs), 84.00 (roughly the 16 Feb high) and 84.40. That 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 USDCHF is still the best barometer of risk appetite in the currency space, and given the ongoing tensions in the Middle East & Africa we have seen the pair negate support at 0.9432 (the week's opening low) and 0.9395 (3 Feb lows) to touch a low of 0.9355. In the process, there has also been a bearish engulfing candlestick printed on the daily chart which suggests further bearish dominance today. Should we break lower, next support is 0.9331 (low water mark for this sell-off which was printed on the 2 Feb), followed by the all-time low of 0.9301. Given the huge significance of that 0.9300 level, we expect buyers lurking there to slow the descent considerably as we approach, but should the level break then the only course of action will be to add to shorts and hold on tight for a plunge into the uncharted waters below. On the topside, sellers will probably start to precipitate around 0.9505 (yesterday's high), 0.9540 (Friday's high), 0.9600 (17 Feb high), and 0.9740 (16 Feb high), while key resistance remains at 0.9784 (11 Jan high).