JPY Bulls Back in Control; GBP Strong

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: The strong resistance barrier at 1.3734 remains intact, putting the strong recovery from an eleven-week low at 1.3648 last Thursday in doubt. Tuesday's low at 1.3678 remains vulnerable, and a push lower would expose the 1.3648 low. Tuesday's downward breach of 1.3685 consigned Monday's 1.3734 high to bear failure status, and loss of 1.3648 would uncover the 200-day supporting moving average at 1.3622. The 1.3734/48 resistance cluster depicted on last week's Market Profile chart is now a major barrier to the upside, and only a concerted wave of EUR bull pressure would manage to force a breakthrough, opening last week's high at 1.3775.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: The focus has switched to Monday's bull hammer candle low at 101.10, and a push into new three-and-a-half month lows are anticipated. Monday's bull hammer candle was never confirmed because resistance at 101.60 remained resolute, keeping the broader sub-dividing downtrend on course for the Feb. 4 base at 100.75. Another downwave equality target lies at 100.21. Recapturing ground above 101.41 is required to suggest a return to 101.60 is on the cards.
        Weekly chart USD/JPY trend: Bearish.
        Intraday GBP/USD: The rally from last week's low at 1.6731 is looking to increase its pace, following Tuesday's breach above 1.6848. Resistance levels at 1.6885 and 1.6902 are now sought, and recapturing ground above 1.6902 would make the May 6 peak at 1.6996 accessible. The 1.6726/31 strong support area would only become the focus again on a break below 1.6754.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: Resistance at Tuesday's 0.8940 high is protecting the important May 15 peak at 0.8961. Action has been trapped in a broad two-month trading range between 0.8698 and 0.8961, but the threat of completing a double-bottom base at the March/May lows at 0.8698/0.8703 lows will remain at the forefront while support at 0.8883 holds. A push above 0.8961 into three-month highs would complete the base and open 0.8990 and 0.9039, whereas a break below 0.8883 would create scope for weakness to 0.8854 and 0.8830.
        Weekly chart USD/CHF trend: Range.
        Intraday EUR/GBP: Tuesday's weakness set a new 16-month low at 0.8123, and the powerful downtrend has further to go. A 1.618 Fibonacci extension target lies at 0.8109, and last week's EUR weakness generated a minimum downside requirement target at 0.7993. Solid resistance lies at 0.82, which is protected by 0.8158 and 0.8182.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: The minimum downside requirement target at 138.45 is within striking distance, as Monday's bull hammer candle has been negated. Tuesday's action produced a bearish outside day, prompting new three-and-a-half month lows. A push below 138.45 would extend the powerful bear wave from the May 8 lower high at 142.37, exposing pivotal support at 138.00 that protects the early February base at 136.25. Tuesday's high at 139.32 would have to be regained in order to negate the bearish outlook.
        Weekly chart EUR/JPY trend: Bearish.
        Intraday EUR/CHF: Tuesday's bearish outside day suggests EUR bulls will have to wait before meeting the important minimum upside requirement target at 1.2247. The setback from Tuesday's high at 1.2238 was prompted by the influential 200-day and 260-day falling moving averages, and a break below 1.2212 would create additional downside risk to 1.2191. However, projected support at 1.2176 is not considered to be within reach during Wednesday's current session.
        Weekly chart EUR/CHF trend: Range.
        Intraday AUD/USD: The May 2 bear failure low at 0.9202 has come within striking distance, following Tuesday's sharp setback. The push lower extends the bear wave from the May 14 high at 0.9411, and a downside break below 0.9202 would set seven-week lows, exposing 0.9170/77 and bull flag support at 0.9150. Resistance at 0.9257 and 0.9289/94 would have to be broken in order to lift the tone, but upside risk is limited during Wednesday's current session.
        Weekly chart AUD/USD trend: Bullish.
        * The pivot is the sum of the high, low and close divided by 3.
        For more technical analysis see: Dow Jones Newswires, N/DJTA; Bloomberg, NI DJTA; and Reuters key word search "INSI-DJN"
        By Francis Bray; Dow Jones Newswires; +44 (0)207 842 9249; francis.bray@dowjones.com
        Francis Bray is Dow Jones' chief technical analyst for Europe, and has worked as a technical analyst and trader for 20 years in London, Barcelona and Guernsey.
        Data provided by CQG International Ltd.
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        (END) Dow Jones Newswires

        May 21, 2014 02:32 ET (06:32 GMT)