JPY Remains Strong; USD Corrects Lower

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Resistance at 1.3732 will come under fresh pressure while Friday's low at 1.3685 holds. But the strong recovery from an eleven-week low at 1.3648 last Thursday needs a concerted wave of bull pressure to break through the 1.3732/48 resistance cluster depicted on last week's Market Profile chart. Success would open last week's high at 1.3775. Loss of 1.3685 would bring the 1.3648 low back into the immediate picture, threatening a deeper setback to 1.3620 and beyond.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: A push into new two-month lows below 101.31 has occurred during Monday's session, as USD bears target the early February base at 100.75. Resistance at 101.68 has been resolutely defended during Monday's Asian session, and the broader bear wave from the May 2 lower high at 103.02 has generated two minimum downside requirement targets at 100.77 and 100.21. Layers of resistance between 101.68 and 101.94 hamper scope for corrective gains.
        Weekly chart USD/JPY trend: Bearish.
        Intraday GBP/USD: Strong support at 1.6726 has held, prompting a recovery that targets 1.6848. Last Thursday's one-month low at 1.6731 is likely to be the low-point of the bear wave from the May 6 peak at 1.6696, and a break above 1.6848 would further retrace that broader move, opening 1.6885 and 1.6902. The 1.6726/31 support area would only become the focus again on a break below 1.6754.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: Strong resistance at 0.8961 keeps the action trapped in a broad two-month rectangle range. But internal resistance at 0.8927 is under pressure, and 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 open 0.8990, 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: Last week's low at 0.8128 is back within striking distance, and a downside break into new 16-month lows is anticipated this week. Resistance at 0.8182 has proved to be a nut too hard to crack, and a push below 0.8128 would extend the broader downtrend towards 0.8109 and 0.8087. Last week's EUR weakness generated a minimum downside requirement target at 0.7993. Only a recovery above 0.8182 would defer the bearish outlook, but strong resistance at 0.8200 limits corrective upside risk.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: Friday's three-month low at 138.77 remains vulnerable, and further weakness to 138.45 is on the cards. The powerful bear wave from the May 8 lower high has generated a minimum downside requirement target at 138.45, and backup support at 138.00 has become a pivotal level, protecting the early February base at 136.25. Resistance at 139.50 would have to be broken just to provide respite, but projected resistance at 139.84 would have to be surpassed in order to question the bearish outlook.
        Weekly chart EUR/JPY trend: Bearish.
        Intraday EUR/CHF: Bulls remain on track for a minimum upside requirement target at 1.2247, signalled last Thursday's on the upward breach of 1.2225. The May 6 higher low at 1.2163 has been confirmed as a bull failure higher low, and a break above 1.2230 would bring the 200-day and 260-day falling moving averages at 1.2240 and 1.2244 respectively into view, shielding the 1.2247 objective. It would take a break below 1.2206 to question the near-term bullish outlook, exposing 1.2191.
        Weekly chart EUR/CHF trend: Range.
        Intraday AUD/USD: Action remains trapped in a range between support at 0.9315 and resistance at 0.9411. But the setback from 0.9411 last Wednesday won't overly concern AUD bulls just yet, as the May 2 bear failure low at 0.9202 indicates a lack of overall downside momentum. A push above 0.9411 would open the 0.9427 lower high and the Apr. 10 reaction high at 0.9463. Failure to hold onto support at 0.9315 would uncover backup at 0.9292 and 0.9271.
        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 19, 2014 02:21 ET (06:21 GMT)