Euro bulls continue to rely on 1.2890, a key 78.6 Fib of the 1.2730-1.3482 euro rally, for a minor support, followed by an intermediate support at 1.2850, formed by the Feb 10 -14 consolidation range low. In case the dollar bulls manage to smash their way through lesser defenses, a major support for the euro longs at 1.2819, a Feb 7-10 consolidation range high, will stand in their way of reaching 1.2730, a 2005 low and a gateway to the 1.2490, a 61.8 fib of the1.1760-1.3667 euro rally. Dollar longs had successfully defeated advancing euro bulls and pushed the pair lower. Currently dollar longs had tightened their defenses in case of the singe currency bulls decide to test their luck and launch another countermove. Advancing euro longs will be met with a minor resistance at 1.2929, a 5-day SMA, followed by 1.2974,
USD/JPY - Yen continues to be intimidated by the dollar, following an unsuccessful counter move against the greenback positions. Advancing dollar longs will encounter a minor resistance at 107.78, a Apr 1 daily high, followed by an intermediate resistance at 108.38, a 50.0 Fib of the 114.51-101-68 yen rally. Major resistance at 108.82, an Oct 18 spike low, remains a target for the dollar, as it defends 109.92, a 61.8 Fib of the May-Jan yen rally. Dollar bulls adjusted their defenses with minor support at 107.31, a 5-day SMA, creating the first line of defense. An intermediate support at 106.62, a 10-day SMA, protects the major support at 106.18, Mar 23-25 consolidation low, which defends the dollar's recently captured territory. Indicators are mixed with Stochastic overbought on both daily chart at 93.57 and at 85.63 on the dealer (4HR) chart. RSI remains overbought line on the daily at 70.76 and is treading below the overbought line at 59.5 on the 4-hour chart. MACD continues to travel above the zero line on the daily chart and is treading sideways above the zero line on the dealer (4HR) chart.
GBP/USD - Pound fell back after the dollar bulls managed to chase the sterling off the recently recaptured territory. Lines of defense shifted again with cable longs relying on 1.8755, a Mar 31 spike low, for a minor support. Intermediate support can be seen at 1.8611, a 78.6 Fib of the 1.8505-1.9328 sterling rally, followed by the major support at 1.8590, a Mar 28 spike low. A breakdown below the 1.8590 will open 1.8505, a 2005 low as a target, with further dollar advance aiming at 1.8412, a 61.8 Fib of the 1.7710-1.9550 pound rally. In case the sterling bulls decide to counter the dollar's move, they will encounter a minor resistance at 1.8819, a 61.8 Fib of the Feb-Mar cable rally. An intermediate resistance at 1.8916, a 50.0 Fib of the 1.8505-1.9328 pound rally, currently defends a major resistance at 1.8977, an Apr 1 daily spike high, which protects the dollar held territory against the pound supporters. Indicators are mixed with Stochastic remaining oversold on the daily chart at 15.33 and is treading above the oversold level on the dealer (4HR) chart at 26.69. RSI is neutral on both daily chart at 43.19 and the 4-hour chart at 45.78. MACD is below the zero line on the daily chart and made a bearish crossover above the zero line on the dealer chart.
USD/CHF - Swissie bulls hastily retreated after failing to hold the 1.2000 level, following an attempt to wrest control from the dollar bulls. Greenback longs succeeded in pushing the pair into the previous range established by the 61.8 and 78.6 Fibonacci levels of the 1.2262-1.1474 Swissie rally. Dollar longs managed to establish a minor support at 1.1999, a 5-day SMA, with 1.1962, a 61.8 Fib of the Feb-Mar CHF rally, acting as the range's lower boundary and an intermediate support, which is further reinforced by the 10-day SMA. A major support at 1.1878, an Apr 1 daily spike low, should keep in check a counter move by Swiss longs. As the dollar continues to advance on Swissie positions, greenback longs will encounter a minor resistance at 1.2079, an Apr 1 daily spike high. An intermediate resistance at 1.2094, a 78.6 Fib of the 1.2262-1.1474 Swissie rally, currently defends a major resistance at 1.2139, an Oct 29 spike high, which protects the 1.2262, a 2005 high and a gateway to the 1.2519, a 78.6 Fib of the 1.2849-1.1288 CHF rally. Oscillators are bearish with Stochastic remaining extremely overbought at 89.68 on the daily chart, with a dealer (4HR) chart Stochastic dipping above the oversold line at 80.06. RSI is treading below the overbought territory on the daily chart at 61.24 and continues to travel sideways at 47.13 on the 4-hour chart. MACD crossed above the zero line on the daily chart and continues to tread above the zero line on the dealer chart.
Chart of the Day - GBP/CHF
GBPCHF continues to swing within a large upward slopping channel, with the latest swing meeting resistance at 2.2657, a 61.8 Fib of the 2.3391-2.1471 Swiss rally. A breakout above the resistance will target 2.2980, a 78.6 Fib, with further breakout targeting the channels upper boundary at 2.3200-50 range. A retrace will meet support at 2.2431, a channel's lower boundary, reinforced further by the key 50.0 Fib, providing an opportunity for the cable bulls establish a new position or add to their existing positions. Indicators are pointing to a weak trend, with Stochastic overbought at 85.57. ATR is falling, indicative of trending conditions. ADX(DMI) is beginning to climb, but remains well below 25, pointing to a swing trading setup.
GBPCHF had a low at 2501 on 02/15 before a small bounce to the 2571 High on 02/16 - 70pts higher. The uptrend failed and the market turned back to neutral after failing to establish a downtrend (GBPCHF bounced below the 2200 level - low at 2080). The market is now fully neutral once again. A serious consolidation is taking place and a sharp move is in the cards. Until a clear direction is established, conservative players will stay out while more aggressive players will have to play the range. 2600/2650 will attract bears thanks to the High BB, Triangle R and the 61.8% Fibo from the Aug - Dec bear wave. Bulls will consider 2030/80 thanks to the Low BB and a decent Fibo confluence (23.6% Fibo from the Feb - Dec bear wave & 61.8% Fibo from the May03 - Mar04 bull wave). A breakout above opens 2800 while a breakout below will open 2.1900.
Technical Levels - London/New York
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