USD on Its Knees; GBP/USD 1.70 in Sight

 
   By Francis Bray 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Tuesday's push above 1.3906 brings the focus onto the Mar. 13 reaction high at 1.3967. The push to the upside extends the advance from the Apr. 4 reaction low at 1.3672, and although there is room for a break into 30-month highs above 1.3967, the structure of the advance suggests the move could fall short of meeting its equality target at 1.4004. Weakness will attract support while above 1.3888.
        Weekly chart EUR/USD trend: Range.
        Intraday USD/JPY: The sharp selloff from last Friday's high at 103.02 is bound for the Apr. 11 reaction low at 101.32. Tuesday's weakness negated Monday's bull hammer candle, strengthening the 103.02 peak and threatening a deeper decline to the Mar. 17 reaction low at 101.15 that shields the Feb. 4 base at 100.75. Resistance at 101.91 and 102.10 severely hamper scope for corrective upside risk.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: The 1.70 level has come within striking distance for the first time since August 2009, as GBP bulls remain in control. Tuesday's push and close above 1.6919 brings minimum upside requirement targets at 1.7001 and 1.7024 into the immediate picture, which lie in front of the August 2009 peak at 1.7041. But the strong 1.70/1.7041 resistance area is not expected to break at the first time of asking. Support at 1.6881 is protected by the bull window between 1.6899 and 1.6913 on Tuesday's Market Profile chart.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: The Mar. 13 base at 0.8698 is vulnerable, following Tuesday's push lower. The bear wave from the Apr. 22 lower high at 0.8851 has been given impetus by the confirmation of a lower high at 0.8862 - a bull failure high - indicating downside scope to the 0.8698 base and a minimum downside requirement target at 0.8653. Resistance at 0.8770 and 0.8781 would have to be reclaimed just to provide respite, and corrective upside risk is extremely restricted.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: Tuesday's downward breach of 0.8195 signals weakness to the Feb. 17 long-term low at 0.8159. Tuesday's decline completed a four-day bear pennant continuation pattern on the daily chart, leaving the Apr. 29 bull failure high at 0.8258 stranded and exposing the 14-month low at 0.8159. Monday's high at 0.8232 would have to be exceeded in order to question the bearish outlook.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: The lower boundary of the recent 141.13/142.47 trading range is under threat. The two peaks just below 142.50 last week on the daily chart remain defiant, and a break below 141.13 would expose 140.99 and the Apr. 15 reaction lows at 140.24. But the broader-term picture shows a two-month bull pennant continuation pattern is developing on the daily chart, indicating limited downside risk to 140.35. Recapturing ground above 142.10 is required to re-open the 142.45/142.47 peaks.
        Weekly chart EUR/JPY trend: Range.
        Intraday EUR/CHF: Support at 1.2163 emerged on Tuesday to prevent a minimum downside requirement target at 1.2160 from being met. Tuesday's action also completed a bull hammer candle at the daily close, and only a concerted wave of fresh bear pressure would allow the 1.2160 objective to be met. The bull hammer candle would be confirmed on a break above 1.2187, re-opening last Friday's bull failure high at 1.2213. A clean break below 1.2163 would bring the Apr. 14 reaction low at 1.2141 into the immediate picture.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: Bulls have regained control on Tuesday's push and close above 0.9318, and further gains to 0.9427 have been signalled. Last Friday's low at 0.9202 has been strengthened considerably, and the 0.9427 lower high will come into view on a break above 0.9369. The Apr. 10 peak at 0.9463 would then come within striking distance. Former range highs at 0.9318 have reverted to support, limiting scope for corrective weakness.
        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 07, 2014 02:15 ET (06:15 GMT)