Euro 1.2515 break is imminent. Dollar/Yen showing signs of short-term top. Cable finally takes out 1.4055-95 support. Dollar/Swiss clears previous weekly high but still sideways. Dollar/Cad continues to surge following triangle break; stops trailed for profit. Australian Dollar breaks below key rising trend-line support. New Zealand Dollar descends to fresh multi-year lows.
EUR/USD
| EUR/USD – Setbacks continue into the early week with the market now looking to make a clear break below key support by 1.2515 (18Feb low). The market has not traded below 1.2515 since late November 2008 and a break of the latter will most likely open a direct retest of the critical multi-year trend lows at 1.2330 (28Oct lows). We will be looking for opportunities to sell the pair following the break below 1.2515. However, with daily studies already somewhat stretched, we prefer to remain on the sidelines. A break back above the 20-Day SMA at 1.2790 will be required to delay the bearish structure. Strategy: SIDELINED; AWAIT CLEARER SIGNAL. |
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USD/JPY
| USD/JPY – Price action is starting to look bearish and could be warning of a short-term top. After rallying sharply for four consecutive days, the market finally stalled out on Friday, unable to post a fresh higher high above Thursday’s high, and subsequently breaking back below Thursday’s low. This has set up a bearish reversal day that could open the door to a more significant drop over the coming days. The overbought daily RSI is also just rolling back over in favor of a much needed and healthy correction. Look for a break below Friday’s low to confirm and open deeper setbacks towards the former resistance now turned support at 94.60. Strategy: SELL @96.85 FOR A 94.60 OBJECTIVE, STOP @98.05. |
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GBP/USD
| GBP/USD – The market has finally taken out multi-day support by 1.4055-95 to open the door for a fresh round of setbacks and resumption of the broader bear channel back towards the key trend lows by 1.3500 (23Jan lows). Any rallies should continue to be well capped ahead of the 50-Day SMA at 1.4465, and we recommend looking for opportunities to sell into any form of strength over the coming days. In the interim, we remain sidelined with no compelling risk/reward ideas at present. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
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USD/CHF
| USD/CHF – Remains locked in a choppy multi-day sideways consolidation with price action largely confined to the 1.1465-1.1890 area. The overall structure however remains bullish and we expect dips to continue to be well supported ahead of an eventual break to challenge the key 2008 highs at 1.2300. Back above 1.1890 should accelerate gains and open fresh upside, while only back below 1.1465 delays. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
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