EUR/GBP to Extend Downtrend; JPY Strong

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Recovers from Tuesday's bear trap low at 1.1753, to extend the consolidation phase beneath resistance at 1.1886. However, internal resistance at 1.1825 and 1.1840 guard Monday's high at 1.1871, which indicates limited scope for corrective upside risk. A downside resolution below the marginal nine-year low at 1.1753 is expected in the coming sessions, exposing 1.1640 and the 1.15 area.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: Heads sharply into new four-week lows beneath 117, as part of a corrective bear wave from 120.82. Support at 116.60 is the next port of call, and a sustained push lower would bring the Dec. 16 reaction low at 115.56 back into focus. However, strong support at 114.50 and 115.00 suggests downside risk is limited. Recapturing ground above 117.42 is required just to provide respite, opening the current session high at 117.95.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: A fresh wave of GBP bull pressure is expected to burst through resistance at 1.5190. The strong bounce from 1.5079 is set to leave Tuesday's low as a higher low, extending the corrective rally from the Jan. 8 reaction low at 1.5035 towards a minimum upside requirement target at 1.5231. Scope to 1.5250 would also be signalled on a clean break above 1.5190/1.5205. Loss of support at 1.5133 would defer the near-term bullish outlook, leaving the 1.5079 low vulnerable.
        Weekly chart GBP/USD trend: Bearish.
        Intraday USD/CHF: Consolidates beneath Tuesday's marginal four-year high at 1.0217, although downside risk is corrective. Support at 1.0173 and 1.0157 provide the nearest downside barriers, designed to prevent the solid 1.0110 support area from exposure. The 1.0217 high would become the focus again on a break above 1.0198, opening 1.0316.
        Weekly chart USD/CHF trend: Bullish.
        Intraday EUR/GBP: Tuesday's low at 0.7757 remains under pressure, and the Jan. 2 reaction low at 0.7746 is on course to be broken. The bear wave from the Jan. 6 high at 0.7874 has generated a minimum downside requirement target at 0.7741, although the wave structure indicates scope beyond equality should be expected, exposing the 15-year rising support line at 0.7730. A 1.618 Fibonacci extension target lies at 0.7686. Failure to meet the 0.7741 downside target, combined with a recovery above 0.7797 would question the bearish outlook, opening strong resistance at 0.7830.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: Support for the euro has collapsed, prompting new ten-week lows below 139.45. This week's weakness has given EUR bears licence to upgrade the powerful downtrend from the Dec. 8 peak at 149.79, offering allowance to the Oct. 16 base at 134.15. The next downside target lies at 137.00. The former range low at 139.45 reverses polarity to become strong resistance, which has protection between 138.28 and 138.98.
        Weekly chart EUR/JPY trend: Bearish.
        Intraday EUR/CHF: Remains in a tight 1.2008 to 1.2015 range, while contemplating a downside breakout. The 1.20 level is the target, although the Swiss National Bank is expected to defend its 1.20 floor again, just as it did on Dec. 18, which prompted a rally to 1.2098. A break above 1.2039 is required to lift the tone, opening limited strength towards 1.2062 and possibly 1.2098.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: Weakness during Wednesday's Asian session drags the recent 0.8033/35 lows back into the immediate picture. The double-bottom base at 0.8033/35 did not manage to meet its validation objective at 0.8285 this week, and the bear wave from Monday's 0.8256 high has licence to set new five-and-a-half year lows below 0.8033 towards 0.80 and 0.7986. Wednesday's Market Profile chart indicates limited upside scope to 0.8164.
        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.
        This is a financial news and information service. It is provided in general terms and does not take account of or address any individual user's position. To the extent that this article includes suggestions as to various possible investment strategies which users might consider, it does so in only general terms without reference to the personal factors which should determine any user's investment decisions. Nothing contained in this service constitutes personalized investment advice. Dow Jones does not warrant the accuracy, completeness or timeliness of the information in this article, and any errors shall not be made the basis for any claim against Dow Jones. The author does not invest in the instruments or markets cited in this article. This article does not constitute or form part of any invitation or inducement to buy or sell any security.
        (END) Dow Jones Newswires

        January 14, 2015 02:33 ET (07:33 GMT)

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