Cable Puts in Bearish Outside Day After Rallying to Fresh 2009 Highs (Daily Classical)

EUR/USD – Although the head & shoulders top is taking its time to play out, the overall structure still looks quite toppish and we anticipate a fresh drop below 1.3750 over the coming days to expose the measured move objective by 1.3250 further down. The latest price action helps to confirm, with rallies stalling out ahead of 1.4175 on Tuesday, before reversing sharply back towards Monday’s lows. A break below 1.3980 should accelerate declines. Only back above 1.4015 gives reason for pause. Strategy: SIDELINED FOR NOW; LOOK TO SELL.

USD/JPY – For now, it looks like the market is content on trading within a broad range, loosely defined between 94.00-100.00. The latest setbacks have been very well supported on dips below 95.00 and Tuesday’s rally could now be setting up the potential for a double bottom with a break back above the neckline at 96.60 to open a move back towards the upper range, with the 98.00 figure seen as a measured move objective. Inability to clear 96.60 will however keep the pressure on the downside and shift the focus on the key 93.55-85 trend lows from March and May. Strategy: STAND ASIDE; AWAIT CLEARER SIGNAL.