Euro breaks lower but still propped ahead of 1.2515. Dollar/Yen puts in bearish reversal day. Cable well supported by 1.4055-95. Dollar/Swiss still locked in bullish consolidation. Dollar/Cad finally breaks above major triangle resistance. Australian Dollar takes out previous 6 daily lows. New Zealand Dollar trades back under 0.5000.
EUR/USD
| EUR/USD – Fresh weekly lows into Friday with the price breaking below the 1.2660 range lows to open deeper setbacks, exposing a direct retest on key 1.2515 (18Feb low) support. The market trades with a heavy tone and continues to be well capped by the 20-Day SMA on rallies. Look for setbacks to extend into Monday with a break below 1.2515 to accelerate towards the critical multi-year lows from 2008 at 1.2330 (28Oct low). Only a close back above the 20-Day SMA would negate bearish outlook. 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 has 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 sets up a bearish reversal day that could open the door to a more significant drop over the coming days. The overbought daily RSI also looks like it could be on the verge of rolling back over in favor of a much needed and healthy correction. Look for a break below Friday’s low on Monday 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 @97.85. |
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GBP/USD
| GBP/USD – The price continues to be well supported on dips ahead of 1.4055-95 support (2/18Feb lows) and remains confined to the middle of a bear channel. Broader price action favors an eventual break below the latter, however, we do not recommend establishing any positions at current levels with the price just as easily able to rally several hundred pips while still being confined to the bear channel. For now, the key levels to watch above and below come in at 1.4485 and 1.4095. 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. Last Friday’s (20Feb) extremely bearish reversal day has shown no follow through this week, with the market bouncing back into the mid-range. 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. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
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