USD Rally to Struggle; AUD to Push Higher

 
   By Francis Bray 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: The corrective setback from Tuesday's eight-week high at 1.3952 will struggle to break beneath strong support at 1.3875. A minimum downside requirement target at 1.3898 and single print support at 1.3888 on this week's Market Profile chart also impedes EUR bear risk, and a base above 1.3875 should be anticipated. Regaining ground above 1.3927 would bring the 1.3952 high back into focus, and also open the Mar. 13 reaction high at 1.3967. The broader advance from the Apr. 4 base at 1.3672 indicates room to 1.4004 is on offer.
        Weekly chart EUR/USD trend: Range.
        Intraday USD/JPY: The recovery from Wednesday's three-week low at 101.43 would have to break above stiff resistance at 102.10 and 102.24, to make a lasting impression. But the sharp decline from last Friday's high at 103.02 suggests there is more weakness in store in the coming sessions. Support at 101.56 and the 101.43 low will remain vulnerable while 102.10/102.24 caps the upside, threatening a medium-term downtrend extension towards 101.15 and the key Feb. 4 reaction low at 100.75.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: The 1.70 level remains within striking distance, and will be breached in the coming sessions. The downside consolidation phase from Tuesday's near five-year high at 1.6996 is shallow, and strong support at 1.6881 is protected by the bull window between 1.6899 and 1.6913 on Tuesday's Market Profile chart. But resistance between 1.70 and the August 2009 peak at 1.7041 is also strong, and unlikely to break at the first time of asking.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: The Mar. 13 base at 0.8698 remains on alert, despite Wednesday's rally. The bear wave from the Apr. 22 lower high at 0.8851 has been strengthened by the confirmation of a lower high at 0.8862 - a bull failure high - and Tuesday's low at 0.8721 remains vulnerable while resistance at 0.8781 caps the upside. Loss of 0.8721 would expose the 0.8698 base, and a minimum downside requirement target has already been generated at 0.8653. Only a recovery above 0.8815 would question the bearish outlook.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: The threat of weakness to 0.8159 remains intact, and Wednesday's low at 0.8194 is vulnerable. It was Tuesday's downward breach of 0.8198 that signalled additional downside scope to the Feb. 17 long-term low at 0.8159, as the powerful bear wave from the Mar. 18 reaction high at 0.8399 extends. The Apr. 29 bull failure high at 0.8258 also exemplifies the dominant bear tone. Recapturing ground above 0.8232 is required to question the bearish outlook, opening 0.8258.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: Action remains trapped in a range between 141.13 and 142.47, following Wednesday's rally from 141.15. Internal resistance at 142.10 would have to be regained in order to re-open the two defiant recent peaks just below 142.50 on the daily chart. The broader-term picture is tracing out a bull pennant continuation pattern, indicating limited downside risk to 140.35 should the current range floor at 141.13 buckle.
        Weekly chart EUR/JPY trend: Range.
        Intraday EUR/CHF: Projected resistance at 1.2204 is targeted, as this week's low at 1.2163 survived a test on Wednesday. That 1.2163 low would become a pending bear failure on a break above 1.2204, and confirmation above 1.2213 would then be sought. But the two-week bear wave from the Apr. 23 high at 1.2225 would remain structurally intact while 1.2204 caps the upside, and a break below 1.2178 would re-expose the 1.2163 low. The Apr. 14 low at 1.2141 would then become vulnerable.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: A push up to 0.9427 is on the cards, as the break above 0.9318 earlier in the week has been corroborated. Last Friday's low at 0.9202 has been strengthened considerably, and a full retracement to the Apr. 10 peak at 0.9463 cannot be ruled out in the coming sessions. Strong support at 0.9335 on the current session's Market Profile chart suggests downside risk is limited, and support at 0.9318 is a pivotal level.
        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 08, 2014 02:25 ET (06:25 GMT)