– We have finally seen the corrective action that we had been looking for in the Euro
/Scandi crosses, with the Euro surging on Wednesday to signal some form of basing against the regional currencies. While it did take an apparent round of coordinated central bank intervention to achieve the goal of propping the beleaguered Euro, the markets have nevertheless started to base out and technical studies warn of additional Euro upside and relative Nordic weakness. Fundamentally, the latest round of economic uncertainty and global panic can not be ignored even by the stronger global economies, and we believe we are now seeing these currencies play some catch-up. Look for this pattern to continue over the coming days.
An interim base and 2010 low looks to be in place just ahead of 9.50, with the market in the process of unwinding from oversold levels. Longer-term technicals show room for plenty of additional corrective gains, but a break back above 9.89 will ultimately be required to officially force a shift in the structure.
A doji close on Mondday, after setting fresh 2010 lows by 7.68, followed by a bullish reversal day on Tuesday, helped to confirm short-term basing and open an explosive upside rally in Wednesday trade. The market is now inching closer to a retest of the 8.00 handle, and could be looking to break a multi-week bear channel. However, we would need to see a break and close back above 8.05 to confirm the shift and force additional gains.
The market continues to extend gains to fresh 2010 highs, with a test of next key barriers by 8.00 seen over the coming sessions. For now, there is some risk for a pullback to allow for short-term studies to unwind, but any setbacks are expected to be well supported ahead of 7.40, in favor of the next upside extension beyond 8.00 and towards 8.20 further up.
The market continues to extend gains to fresh 2010 highs, with a test of next key barriers by 6.50 seen over the coming sessions. For now, there is some risk for a pullback to allow for short-term studies to unwind, but any setbacks are expected to be well supported ahead of 6.20, in avor of the next upside extension beyond 6.50 and towards 7.00 further up.
As we had written in previous commentary, the market was very well supported by the 9.00 handle, with a multi-day consolidation holding just above the figure and finally breaking to the upside back towards next key topside resistance by 9.30. Look for a break above 9.30 over the coming sessions to open 9.50 further up.
Has been well confined to a very choppy range trade over the past several months, largely defined between 14.00 and 16.50. Setbacks have once again been well propped by 14.00, and we recommend to continue to play the range high-lows.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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