• Euro locked in bearish consolidation
• Dollar/Yen bouncing by lower end of well defined range
• Cable needs to break below 1.6185 to accelerate declines
• Dollar/Swiss clears key topside barriers to reaffirm basing prospects
EUR/USD
| EUR/USD – The market has been locked in some sideways trade since breaking below the neckline of a major head & shoulders top formation on June 15. However, we classify the recent price action as a bearish consolidation and look for an eventual break lower below 1.3850 to confirm our bearish outlook and expose the measured move h&s objective lower down by 1.3250. A lower top is now sought out by Wednesday’s 1.4140 highs, with only a break above 1.4140 to negate and give reason for pause. Position: SHORT @1.4010 FOR OPEN OBJECTIVE; REVISED STOP @1.4010. |
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USD/JPY
| USD/JPY – For now, it looks like the market is content on trading within a broad range, loosely defined between the 94.00-100.00 area. With the price now gravitating to the bottom of the range, there is scope for additional weakness down towards the 93.55-85 area. However, setbacks have been well supported inter-day by 95.00 and a bullish reversal day on Wednesday could warn of basing. Back above 97.20 will be required to take pressure off of the downside. Strategy: STAND ASIDE; AWAIT CLEARER SIGNAL. |
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