EUR Volatility to Continue, AUD Weak

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Key resistance at 1.1680/90 capped Wednesday's volatile session, although a new minimum upside requirement target was generated at 1.1720. That objective will remain achievable while support at 1.1540 holds, and a push into new session highs above 1.1629 would re-open the 1.1680/90 resistance area. However, a solid resistance area at 1.1776/89 looms overhead on January's monthly Market Profile Chart. The 1.1540 higher low would become exposed on a break below 1.1568, and loss of 1.1511 would signal a return to last week's eleven-year low at 1.1459.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: Strength from Wednesday's low at 117.18 is on track to challenge Tuesday's 118.87 high. Bulls emerged to defend the Jan. 16 reaction low at 115.85, and a break above 118.87 would bolster that low, while offering additional upside scope to 120.20. However, notable resistance at 119.35 and 119.73 on the Market Profile charts would have to be broken in order to achieve that 120.20 objective. Bears would only regain control of the near-term on a break into new session lows below 117.80, threatening weakness back to the 117.18 low.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: Tuesday's bullish outside day relieves the pressure on the important Jan. 8 reaction low at 1.5035. That said, Wednesday's inside day tempers the positive intonation of Tuesday's outside day, and a break above 1.5201 and 1.5215 is required to increase the prospects for a return to the Jan. 15 reaction high at 1.5300. A reversal below this week's 1.5060/78 lows would drag the 1.5035 low back into the immediate picture, while threatening to test the 1.50 level - last traded in July 2013. Scope to the July 2013 reaction low at 1.4813 would be issued on a sustained break below 1.4995.
        Weekly chart GBP/USD trend: Bearish.
        Intraday USD/CHF: Support at 0.8501 is likely to come under pressure Thursday, following this week's sharp setback from 0.8835. Another wave of weakness is in store, to follow on from last week's plunge beneath parity, and a break below 0.8501 would expose 0.8452 and 0.8350. Recapturing ground above 0.8685 is required to provide respite, although only a move above 0.8730 would put bulls back in control of the near-term, opening 0.8800.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: Wednesday's decisive rejection of a four-day high at 0.7713 leaves Tuesday's low at 0.7614 vulnerable. Wednesday's high at 0.7713 is located just below the level where a 15-year rising support line was broken at 0.7730 last week, and a break below 0.7614 would expose last week's seven-year low at 0.7596. Broader-term bears have a downside objective at 0.7550 to meet, derived from the completion of the large bearish symmetrical triangle pattern in December, while also targeting the 0.75 level.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: Wednesday's bull hammer candle re-opens Tuesday's 137.64 high. The strong bounce from Wednesday's low at 135.81 provides a strong defence for last week's 134.70 reaction low, and a break into new session highs above 137.31 would bring Tuesday's 137.64 high into the immediate picture, while threatening to generate a minimum upside requirement target at 138.75 on a break above 137.64. Support levels at 136.65 and 136.30 would have to be broken in order to dampen the enthusiastic near-term bull tone, although only a move below 135.20 would re-expose the 134.70 reaction low.
        Weekly chart EUR/JPY trend: Bearish.
        Intraday EUR/CHF: Continues to skirt either side of parity, within the converging support and resistance lines of a symmetrical triangle pattern. Wednesday's low at 0.9846 is the level to break to produce a downside resolution, which would then expose the pattern's other lows at 0.9750 and 0.9715. Internal resistance a 1.0033 would have to be reclaimed, if near-term bulls are to acquire scope to 1.0095 and Wednesday's 1.0135 high.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: Wednesday's bearish outside day effectively destroys bullish hopes of re-testing last week's high at 0.8296. The emphatic push below 0.8155 created a 1.618 Fibonacci extension target at 0.8010, located beneath the early January double-bottom base at the 0.8035/33 lows. Loss of 0.8033 would not only expose that 0.8010 objective, but also extend the powerful long-term downtrend, creating additional downside scope to 0.7702. Solid resistance lies at 0.8155, which has protection at 0.8110 and 0.8090.
        Weekly chart AUD/USD trend: Bearish.
        * 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

        January 22, 2015 02:28 ET (07:28 GMT)

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