EurUsd Trichet's hawkish comments ramped EURUSD up to highs of 1.3975 yesterday (almost identical to the 9 Nov highs), and from here our conviction remains high that an assault on 1.4000 is virtually unstoppable. The bullish flag pattern we outlined yesterday became active around 1.3880-90, so we have gone long and are looking for a target of 1.4025 (estimated as the length of the flag pole applied to the point of break out). It's also worth remembering that we are still playing the bullish cup & handle pattern from mid-Jan whose target lies at 1.4035. Only resistance levels nearby are 1.3975 (yesterday & 9 Nov highs), 1.4000 psychological barrier and 1.4085 (8 Nov high). We're convinced that even a very strong US payrolls report this afternoon will only be able to evoke a temporary dip, and expect many bidders who missed the initial move to be waiting around 1.3900 with eager demand. Next supports below are 1.3845 (yesterday's low), 1.3744 (Wednesday's low), 1.3705 (24 Feb low), and 1.3635 (last seen late on 22 Feb).
GbpUsd GBPUSD has been weighed by the fierce resurgence of EURGBP in the past 24 hours, and we have seen the pair pare back its gains to the mid-1.6200 handle. For the time being, we remain confident that near term support at 1.6216 (yesterday's lows) will be sufficient to halt the sell-off (barring a shock strong number from US payrolls this afternoon). Next levels below are eyed at 1.6072 (17 Feb low), 1.6031 (25 Feb low) and 1.6000. Only a break of that 1.6000 level would force us to reconsider our bullish bias from here. Given the dearth of recent price action at these lofty levels, there are very few resistance levels of note to hinder further upside progress. Beyond Wednesday's 1.6344 peak the route is cleared for a run at 1.6460 (19 Jan 2010 high) and 1.6515 (7 Dec 2009 high).
UsdJpy The anticipated return of monetary tightening across the G10 (sparked by Trichet yesterday) has given the carry trade a whole new appeal, and buoyed USDJPY to highs of 82.52. The technical picture once again looks very bullish, as not only is there a bullish engulfing candlestick on the daily chart (suggesting the bulls have overwhelmed the remaining bears), but also it looks like a potential bullish flag pattern is materializing on the hourly chart. Should the flag get activated by a break above 82.45-50, then we would go long and expect a target in the region of 83.20. One resistance level of note that may stand in our way is 82.85 (23 Feb rebound high), but after that, the only pockets of demands lie beyond our target at 83.55 (18 & 21 Feb highs), and 84.00 (roughly the 16 Feb high). On the downside first support is 82.30 (today's low), then 81.70 (yesterday's low), 81.13 (4 Feb low), 80.94 (31 Dec and 2 Jan lows), 80.54 (9 Nov low), 80.24 (31 Oct low) and then the all-time low of 79.75 from 1995.
UsdChf USDCHF is looking a bit range-bound at the moment, capped by supply around 0.9330 (yesterday's high) and underpinned by the all-time low 0.9202 which was touched earlier in the week. However, it is worth noting that yesterday's price action looks to have carved out a bullish engulfing candlestick on the daily chart - a pattern which can suggest further gains are due today. Should we break higher (perhaps prompted by today's NFP release), then watch for next resistance to step in at 0.9390 (23 Feb high), 0.9505 (22 Feb high), 0.9540 (18 Feb high), and 0.9600 (17 Feb high). Only support levels of note are now the psychological ones of 0.9200, 0.9100 and 0.9000 etc, so the risk-reward profile is highly skewed in favour of the bears.