EUR/USD
Technical View
The pair has been in a multiyear complex corrective down trend since July ’08 and the medium term corrective uptrend from 1.2040 may be a final leg of a large triangle which has the potential to test the 1.3900/1.4400 resistance on multi-month basis. The short term downtrend from 1.3710 could target the 1.2875/1.2660 support zone before renewing the medium term uptrend (H&S target is at 1.2890). A break below however deepens the correction. Short term bearish view needs to be re-assessed if the pair moves above 1.3350/1.3435.
The pair is due for an oversold bounce (watch potential triple divergences in 4 Hr RSI). A break below 1.2955 extends the bear run toward 1.2900/1.2875 in a wave [v] before attempting recovery. A reversal above 1.3080/1.3135 would test the tough 1.3240/1.3320 resistance where it should fail.
Trading Strategy
Look for low risk swing short trades on corrective bounce.
GBP/USD
Technical View
We are looking a larger wave [B] triangle resolution for GBP/USD in the long/medium term which has targets below 1.35(Alt- Triangle range continuation if the major swing low 1.4225 holds). The medium term downtrend has been unfolding impulsively which could aim for 1.4600/1.4400. The 1.5325/1.5505 resistance needs to be cleared to stage sustained recovery attempt.
The pair is still trading around lows. Immediate term downtrend may be a wave [v] of 3. A break below 1.4865 would aim for 1.4800/1.4775 before attempting to bounce. A reversal above 1.4985/1.5085 would test the 1.5200/1.5225 resistance before failing. A break below 1.4775 would aim for 1.4700/1.4670.
Trading Strategy
Stay on side lines.
USD/CHF
Technical View
USD/CHF has been in a larger corrective uptrend since August’11 and it could at least test the strong 2006 monthly resistance line around 1.0600 in the long term. The pair had completed a wave (W) at 0.9975 (Jul’12 high) and the current wave (X) could test the strong 0.8930 support in coming months where medium term bulls would attempt to fight back. The short term recovery from 0.9020 may be a wave (B) which has the potential to test the 0.9635/0.9810. A reversal below 0.9280/0.9230 is needed for bear renewal.
The pair is drifting lower from 0.9555 and it may undergo corrective pullback. A reversal below 0.9465/ 0.9435 would refocus on 0.9410/0.9390 (watch the hourly trend line support from swing low at 0.9020). A move above 0.9525/0.9550 would continue the uptrend and target tough 0.9600/0.9610 next.
Trading Strategy
Close swing long trades (+20). Day trade shorts may be considered on break of 0.9465 with stop at 0.9505 for a target of 0.9425.
USDJPY
Technical View
USD/JPY has been in a larger corrective uptrend from its Nov’11 low at 75.55 and the uptrend could test the 100.00/101.70 resistance on multi-month basis before renewing long term downtrend. The pair may be now in a wave 5 of (A) which could target 97.55/98.00. A reversal below 94.45/93.70 would refocus on 90.90.
The pair is now in a wave 5 and immediate term focus is now on 96.75/97.00. A break above targets 97.55 ahead of EW channel resistance around 98.00. The 95.50/94.80 support looks to hold now on pullback. A reversal below 93.70 (watch the daily trend line support) however dampens bulls.
Trading Strategy
Look for longs on weakness.