Sterling/Dollar Bearish Outside Day Reaffirms Prospect for Short-Term Top (Daily Classical)

Published June 3rd, 2009 - 09:24 GMT
Al Bawaba
Al Bawaba

•    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



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.

Level

Resistance

Details

1.4435

R3

12/17 high

1.4365

R2

12/29 high

1.4340

 R1 

6/3 09 high

Level

Support

Details

1.4100

S1

6/1 low

1.4045

S2

10-Day SMA

1.3985

S3

5/28 high



USD/JPY



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.

Level

Resistance

Details

97.85

R3

5/12 high

97.25

R2

5/28 high

96.65

 R1 

6/2 high

Level

Support

Details

95.30

S1

6/2 low