• Euro continues to surge; takes out 1.4300
• Dollar/Yen remains locked in sideways trade
• Cable breaks above 1.6500 barriers; 1.6675 next
• Dollar/Swiss finally posts fresh 2009 lows for first time since January
EUR/USD - Monday's bearish doji-like close has been negated and the market has once again managed to surge to fresh 2009 highs beyond 1.4300. Daily studies however remain overbought and now well above 70 on the RSI which warns of a pullback over the coming days. We had attempted a short trade on Monday but the market easily took us out at 1.4260. From here we will stand aside and await another opportunity to establish a counter-trend short. 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 - The market continues to extend gains in unrelenting fashion to stretch our short trade out of the money. Nevertheless, daily studies remain highly overextended as evidenced by the above 80 daily RSI reading and the risk fro here are for limited gains, in favor of a more significant corrective pullback. A break back under 1.6325 is required to shift focus back on the downside. Next key topside resistance comes in by 1.6675. Position: SHORT @1.6407 FOR AN OPEN OBJECTIVE, STOP @1.6687.
USD/CHF - After finally trading down to fresh 2009 lows (first time since January) and breaking below 30 on the daily RSI, the market could be looking for a much needed and healthy corrective rally. However, the bear trend has been quite intense and we will need to see a break back above 1.0745 for confirmation of short-term basing. In the interim, next key support comes in by 1.0485 which guards against the key 1.0370 trend lows from late December. 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 email@example.com and you will be added to the distribution list.
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