Euro finally stalls out but still confined to Thursday range. Dollar/Yen poised for fresh upside extension. Cable well capped for now ahead of 100-Day SMA. Dollar/Swiss should be supported in the 1.1200's. Dollar/Cad propped above 100-Day SMA. Australian Dollar contemplates bear trend resumption. New Zealand Dollar sell recommendation issued; revised from earlier.
EUR/USD - Has shown impressive upside follow through this week following the previous weekly bullish reversal and the market is now officially in the process of a material correction within the broader downtrend. While daily studies have now reached overbought, the weekly technicals show more room to run and we look for additional upside into the 1.3850-1.4000 area into next week. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/JPY - The market has now reached its measured move objective off of the head & shoulders top by 99.70, and after slightly exceeding the previous 2009 high/major double bottom neckline by 94.60 to 93.55, should finally find some support. There is a confluence of support by Thursday's low in the form of the previous double bottom neckline, the 50% fib retrace off of the 87.15-99.70 move and the 50/100-Day SMAs. As such we would look for a fresh medium-term higher low to carve out ahead of the next major upside extension beyond 100.00. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
GBP/USD - Although the pair has now broken back above the 50-Day SMA, rallies above the moving average have proved to be fleeting since the onset of the major downtrend back in August 2008. The overall structure is still grossly bearish and a break back above the 1.4990 medium-term lower top from February 9 would ultimately be required to shift the structure. Daily studies however still show room to run with the next key resistance coming in by the 100-Day SMA at 1.4660. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/CHF - The latest sharp pullbacks below 1.1315 have signaled an end to the multi day range and opened the door to the current drop back to 1.1165 thus far. However, the pair should find some decent support at current levels in the form of the 50% fib retracement off of the 1.0370-1.1970 move (1.1170) and the 200-Day SMA (1.1200). Look for a rebound from current sub-1.1500 levels back into the familiar range next week. Below 1.1165 negates. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
USD/CAD - Despite the recent decline, the overall structure remains quite constructive with the current pullback still classed as corrective. Setbacks have broken down through the 61.8% fib retrace off of the 2009 low-highs and the 100-Day SMA at 1.2370 but are struggling to establish below these levels. We are now looking for a medium-term higher low by current levels and above 1.2025 (28Jan low) ahead of the next upside extension beyond 1.3065. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
AUD/USD - The strong multi-day up-move from 0.6310 back on March 10 is starting to show signs of fading and with daily studies overbought, the market could be contemplating a resumption of the broader downtrend. Gains have extended to 0.6945 thus far but have had a hard time establishing above the 61.8% fib retrace off of the 0.7275-0.6250 move. Look for some pullbacks into the early week with an acceleration expected on a break back below 0.6725. Back above 0.6495 however will expose the 2009 highs at 0.7270. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
NZD/USD - The current upside moves while impressive are still classed as corrective, and with the broader USD sell-off now looking stretched across the board, we are compelled to look for opportunities to sell back into the overriding downtrend. The daily RSI is now above the critical 70 level and stochastics are well above 80 at 94. The market is also testing the 61.8% fib retrace off of the 18Dec-4Mar move and we feel any gains beyond this point will be hard to come by. We issued a sell earlier today but have revised the recommendation with our entry not expected to be hit. Strategy: SELL @0.5525 FOR A 0.5255 OBJECTIVE, STOP @0.5635.
Written by Joel Kruger, Technical Currency Analyst 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.
Joel Kruger publishes 6 daily pieces:
Tech Talk - A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
Morning Slices - Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes Trade of the Day).
Monday-Friday (between 6:30am-7:30am EST)
Indicator of the Day - A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
Cross Country - A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)
Scandi Daily - A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
Daily Classical - A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)