• Euro reverses course; below 1.4100 accelerates
• Dollar/Yen continues to see range contraction; warns of breakout
• Cable put in bearish outside day after surging to fresh 2009 highs
• Dollar/Swiss finally posts fresh 2009 lows for first time since January
EUR/USD - Finally showing signs of a legitimate short term top on Wednesday after just squeaking out fresh 2009 highs by 1.4340 ahead of the latest sharp pullback. A break below 1.4100 will confirm and open deeper setbacks towards initial support at 1.4050, with a break accelerating and exposing 1.3790 further down. Only back above 1.4340 negates. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/JPY - The market has been well offered over the past several weeks but setbacks have now stalled out just shy of next key support by 93.55 from March, which guards against the critical 87.15 multi-year trend lows. We have seen a contraction in volatility over the past few sessions which suggests that a break out looms. However, the direction is unclear at this point with a push above 97.25 or back under 93.85 required for a clearer bias. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
GBP/USD - Stops were under pressure overnight but we managed to hang in and the market has reversed quite sharply after recording fresh 2009 highs by 1.6665 earlier in the day. The latest break below Tuesday's 1.6325 lows now sets up a very bearish outside day and opens the door for an acceleration of declines over the coming days. Look for an initial retest of 1.6090, below which exposes 1.5855-1.5920. Position: SHORT @1.6407 FOR AN OPEN OBJECTIVE, STOP ON A NY CLOSE ABOVE 1.6687.
USD/CHF - Setbacks have been very well supported by 1.0590 and the market has reversed course on Wednesday to suggest that a base could now be in place. Daily studies show plenty of room to run with a break back above 1.0745 to accelerate and open a direct test of former support at 1.0800, above which opens a more significant upside extension to 1.0955. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com. If you wish to receive Joel's reports in a more timely fashion, e-mail firstname.lastname@example.org and you will be added to the distribution list.
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Monday-Friday (between 5:30am-6:30am EST)
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