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Euro Surge Exposes Psychological Barrier (Daily Classical)

Wednesday, 14 October 2009 06:46:55 GMT  |  Joel Kruger, Technical Currency Strategist

•    Euro eyes major 78.6
•    Dollar/Yen lower top
•    Cable back in range
•    Dollar/Swiss new lows
 

EUR/USD – The break to fresh 2009 highs beyond 1.4845 on Tuesday ends the hopes for a double top formation on the daily chart and now opens fresh upside back towards psychological barriers by 1.5000 over the coming days. Ultimately, there is nothing to really stop the pair from even accelerating through 1.5000 to test the 78.6% fib retracement off of the major 2008 high-lows, which comes in between 1.5200-1.5300. STRATEGY: STAND ASIDE FOR NOW



USD/JPY – As expected, the market has once again rolled over following the recent corrective surge, with the overriding downtrend still very much in force. Look for a lower top by 90.50 to be confirmed on the break below 88.00 over the coming sessions. Below 88.00 then exposes the critical matched trend lows from late 2008 and early 2009 by 87.17. Only back above 90.50 delays. STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL 



GBP/USD –The dip below the 1.5770 consolidation lows has been short lived and the market has since bounced rather impressively to trade back into the well defined range that has defined trade over the past several days.  Rallies should now be well capped towards 1.6130, with only a break above to take pressure off of the downside and potentially shift the short-term structure. Back under 1.5700 is now required to accelerate declines.  STRATEGY: STAND ASIDE FOR NOW; LOOK TO SELL



USD/CHF –There is still the risk for the formation of a short-term double bottom on the daily chart, with a break above 1.0455 over the coming days required to confirm and accelerate back towards the 1.0700-1.0800 area. However, the latest round of setbacks to fresh 2009 lows must be well supported on a close basis above 1.0185 (previous 2009 low) in order for the bottoming formation prospects to remain intact. A close below 1.0185 will negate and open a direct test of 1.0000. STRATEGY: STAND ASIDE   


 

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
If you wish to receive Joel's reports in a more timely fashion, e-mail jskruger@fxcm.com and you will be added to the "distribution" list.

 

 

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