Weekly Technical Overview of the Major Currencies and Cross Rates
EUR/USD:The market remains under intense pressure and the focus for now is squarely on a retest of the 2012 lows from January at 1.2625. While we would not rule out a possibility of a test of this level over the coming sessions, short-term technical studies are well oversold and are showing a need for some form of a corrective bounce from where a fresh lower top is sought out. Ultimately however, any rallies should now be very well capped by previous support turned resistance at 1.3000 in favor of additional weakness over the medium-term that projects deeper setbacks into the lower 1.2000's.
USD/JPY:The market continues to consolidate around 80.00 and is in the process of looking for a medium-term higher low ahead of the next major upside extension back above the yearly highs at 84.20 and towards 90.00 further up. However, for the time being it remains in question whether the market will still head lower towards the 200-Day SMA by 78.50 before ultimately reversing higher. The key level to watch above comes in by 80.60, and a break and close above this level will officially alleviate downside pressures and suggest that a higher low has now been carved in the 79.00's.
GBP/USD:The market remains under intense pressure since breaking back below 1.6000 and setbacks could now extend towards next key support in he 1.5600 area over the coming sessions. Still, daily studies are now stretched and we would prefer looking to sell into rallies towards 1.5900 where a fresh lower top is sought out.
USD/CHF:Overall the structure remains highly constructive and we continue to project additional upside over the coming months back above parity. For now, the latest break and close above 0.9335 is expected to accelerate gains for a retest of the yearly highs by 0.9600, while any intraday pullbacks should be very well supported ahead of 0.9200. Ultimately, only back under 0.9000 would negate outlook and give reason for pause.
AUD/USD: Our bearish outlook in this market remains intact and we continue to project deeper setbacks over the coming days and weeks towards the October 2011 lows by 0.9385. A fresh lower top has now been confirmed by 1.0475 following the latest break below 1.0225. Daily studies are however starting to look a little stretched, so we would not rule out the potential for a bounce, from where the next lower top is sought out, ideally ahead of 1.0200. Ultimately, only back above 1.0475 negates.
NZD/USD: The market has extended declines significantly since breaking down below some key multi-week support at 0.8050, and risks remain for deeper setbacks over the coming days towards 0.7370. However, at this point, daily studies are looking stretched and we would not at all be surprised to see a minor corrective bounce towards 0.7800 from where the next lower top will be sought out.
USD/CAD:The latest break and close back above 1.0050 reaffirms out core constructive outlook and should now open the door for some fresh upside over the coming weeks back towards 1.0600. In the interim however, look for short-term studies to unwind before any meaningful gains. Setbacks should now be very well supported above 0.9900.
EUR/JPY: The corrective pullback from the March 111.40 highs continues, and at this point, the close below the 200-Day SMA could open the door for a more significant decline below 100.00 over the coming days. However, with daily studies now looking stretched, we still hold onto a constructive outlook and will look for setbacks to stall out over the coming sessions in anticipation of a major bullish reversal. But back above 103.00 is now required at a minimum to relieve immediate downside pressures.
GBP/JPY: The corrective pullback from the March 133.50 highs continues, and at this point, the close below the 100-Day SMA could open the door for a more significant decline below 125.00 over the coming days. However, with daily studies now looking stretched, we still hold onto a constructive outlook and will look for setbacks to stall out over the coming sessions in anticipation of a major bullish reversal. But back above 128.00 is now required at a minimum to relieve immediate downside pressures.
US DOLLAR INDEX:The market has now taken out some major resistance by 10,100 to open the door for fresh upside and a bullish continuation over the coming weeks. Next key resistance comes in by the 10,300 area, although, with daily studies now overbought, look for opportunities to buy on dips back towards 10,000 where a fresh higher low is now sought out.
--- Written by Joel Kruger, Technical Currency Strategist
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