EurUsd EURUSD slumped dramatically yesterday, with continued selling during the Asian session taking us to a low of 1.2764. Having cut straight through prior support at 1.2859 (29 Dec low), the next targets on the downside are eyed at 1.2644 (10 Sep 2010 low), 1.2588 (24 Aug 2010 low), and 1.2500 psychological support. Rallies are expected to struggle back through 1.2944 (yesterday’s high), 1.3083 (last week’s high), 1.3118 (22 Dec high), 1.3197 (21 Dec high), and 1.3237 (13 Dec high).
GbpUsd GBPUSD was dragged back down with EURUSD yesterday, but decent support at 1.5469 (2 Jan low) eventually caught the sell-off and allowed a modest rebound. Interestingly, the recent price action looks to have carved out a potential head & shoulders pattern on the hourly chart – which if activated would lead to an even deeper sell-off. In order to activate the pattern we’d need to see the second “shoulder” form (already underway), and then a break below the neckline 1.5470. If that occurs, we’d go short and aim for a target of approximately 1.5270. Support levels lie in wait at 1.5362 (29 Dec low) and 1.5273 (6 Oct low), so we may consider cutting the position early if downside momentum starts to wane. Resistance at 1.5692 (28 Dec high) should cap for now, and only a break above 1.5780 (resistance level from 30 Nov, 8 Dec & 21 Dec) would shift the bias back to bullish.
UsdJpy The widespread USD rally has now pulled USDJPY back above the 77.00 level to 77.26 highs; but the rally has looked far from impressive, so it’s possible we simply revert lower in the coming sessions. One reason for this theory is that 2-week downtrend resistance is eyed at 77.30-35 today, and we expect plenty of sellers to lurk there, preventing any further gains. If we are wrong and there is indeed a break higher, next resistance is not far off at 77.75 (30 Dec high), 78.04 (28 Dec high), 78.29 (29 Nov high), and 78.46 (1 Nov US session high). If our base case scenario is correct (that we surrender the recent gains and head lower), key support remains at 76.58 (18 Nov low) – the last technical level before we’d be aiming at the all time low 75.58 (seen on 31 Oct).
UsdChf USDCHF rallied strongly yesterday, taking us to a high of 0.9449 and putting in doubt the validity of the symmetrical triangle pattern we have been following. As a reminder, we went short on the break below 0.9370 (aiming for a target of 0.9010); but we now set a stop just through 0.9450 and will discard the pattern completely on a break higher. Any subsequent rallies are likely to meet sellers back up through 0.9470 (29 Dec high), 0.9548 (15 Dec high), 0.9739 (16 Feb high) and 0.9784 (11 Jan high). If we are lucky and see the pair dip back lower, interim supports between here and the target are eyed at 0.9305 (3 Jan low), 0.9243 (21 Dec low), 0.9165 (5 Dec low), 0.9115 (2 Dec low), and 0.9067 (30 Nov low). |
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