Euro bullish outside day negated with negative close. Dollar/Yen recovers and now consolidates. Cable looking for doji close. Dollar/Swiss still sideways but posts 6th consecutive daily higher low. Dollar/Cad stops trailed again to lock additional profit. Australian Dollar puts in bullish reversal day. New Zealand Dollar descends to fresh multi-year lows.
EUR/USD
| EUR/USD – The market is attempting to put in a bullish outside day on Tuesday with the price breaking below Monday’s low and then back above Monday’s high. While the pattern often warns of potential upside, the formation is still in question and completely contingent on a positive close. Additionally, with the trend so intensely bearish, any rallies into Wednesday are ultimately seen capped by the 20-Day SMA at 1.2770, which has acted as a ceiling on a close basis for the entire 2009. We maintain a bearish bias and look for a break below 1.2515 (18Feb low) to fresh 2009 lows back towards the key trend lows at 1.2330 (28Oct lows). Strategy: SIDELINED; AWAIT CLEARER SIGNAL. |
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USD/JPY
| USD/JPY – Setbacks have been limited to 96.85 this week, with Friday’s bearish reversal day now virtually negated. However, while daily studies remain overbought, we maintain our sell recommendation on a break back below Friday’s low. Should the market however continue higher into Wednesday beyond 98.70, we will look to revise our outlook. While the major double bottom break from the previous week does project gains back to the 104.00 area, we still contend that a more significant pullback is warranted before this move can be achieved. Strategy: SELL @96.85 FOR A 94.60 OBJECTIVE, STOP @98.05. |
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GBP/USD
| GBP/USD – Remains locked in a very well defined bear channel with Monday’s break below key support in the 1.4055-95 area finally marking an end to some multi-day consolidation and opening the door for the next drop back towards and eventually through the key trend and multi-year lows set in January by 1.3500 (23Jan low). However, while our outlook remains bearish, we see no compelling risk/reward trade set-ups at current levels and prefer to remain on the sidelines. 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 below 1.1465 delays. It is worth noting that despite the sideways chop, the market has now managed to put in 6 consecutive daily higher lows to reaffirm overall bullish bias. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
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