• Euro short stopped
• Dollar/Yen eyes 87.15
• Cable consolidates
• Dollar/Swiss bounce fails
EUR/USD – The market has now broken back above the 78.6% fib retrace off of the latest moves with the break above 1.4765 to likely now open a more significant rally back towards initial resistance by the 2009 highs at 1.4845. From there, we expect to see an acceleration to challenge critical psychological barriers at 1.5000, with gains ultimately now projected into the 1.5200’s before considering the possibility of any form of a meaningful pullback. STRATEGY: STAND ASIDE
USD/JPY – Any hopes for a short-term base have been wiped away, with the market now breaking back below key short-term support at 88.25, to 88.00 thus far. A break below 88.00 will now expose a retest of the major 87.15 matched trend lows from late 2008 and early 2009. Only a break back above 90.00 will now be required at a minimum to take pressure off of the downside. STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL
GBP/USD – The market is in the process of a bearish consolidation with the more likely outcome from here, an eventual drop back below 1.5770 to open a fresh downside extension towards 1.5000 over the coming weeks. However, with the USD still broadly offered across the board, we cannot rule out the possibility for an upside break of consolidation through 1.6130, back towards the 1.6400-1.6500 area. STRATEGY: STAND ASIDE FOR NOW; AWAIT CLEARER SIGNAL
USD/CHF – Any hopes for a recovery have all but been wiped away, with the market unable to bounce out from the 1.0250 area 78.6% fib retrace and now trading back into the 1.0200’s. Look for a break below 1.0235 to open a direct retest of the 2009 lows at 1.0185, with deeper setbacks seen below to expose critical psychological barriers at parity. STRATEGY: STAND ASIDE
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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