EUR Strength is Counter Trend

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Tuesday's strength completed a bull pennant/symmetrical triangle pattern on the 60-minute chart, generating a minimum upside requirement target at 1.1608. The push higher extends the corrective recovery from the Jan. 25 reaction low at 1.1098, although resistance at 1.1534 and 1.1584 are obstacles that lie on the projected upward path. Single print support at 1.1405 and 1.1364 help to hamper downside risk, and only below 1.1355 would concern near-term EUR bulls.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: The upward breach of 117.88 during Wednesday's Asian session generated a minimum upside objective at 118.11. However, the structure of the bull wave from the Feb. 2 reaction low at 116.64 suggests meeting that 118.11 objective may be a difficult task, and tougher resistance at 118.50 looms overhead. Loss of support at 117.47 would enhance this view, beckoning additional weakness to 117.21, while threatening a return to the 116.87/116.64 lows.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: The successful defence of the Jan. 23 reaction low at 1.4953 on Tuesday re-opens the ceiling of the current short-term range at 1.5223. The counter-trend rally has scope to extend to 1.5260, where the projected resistance line of a bear flag continuation pattern lies guarding the Jan. 15 lower high at 1.5300. The midpoint of Tuesday's bullish outside day lies at 1.5093, offering support.
        Weekly chart GBP/USD trend: Bearish.
        Intraday USD/CHF: The 200-day moving average at 0.9367 continues to keep a lid on the two-week recovery. However, the rally from Tuesday's 0.9186 low will look to challenge resistance at 0.9275 and 0.9300, that protect the two-week recovery high at 0.9347. USD bears would only regain the ascendancy on a break below 0.9186, creating additional downside risk to 0.9110.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: Extends the corrective rally from last week's seven-year low at 0.7408, and further gains to 0.7610 are on offer. Tuesday's strength exceeded the rising resistance line of the bear flag continuation pattern, to open the 1.618 Fibonacci extension at 0.7610 that lies in the vicinity of former range lows that have reversed polarity. Tuesday's low at 0.7526 would have to be broken in order to question the near-term EUR bull dominance.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: The push above 134.37 is being sustained during Wednesday's Asian session, and a wave equality target has been generated at 136.21. The move higher extends the corrective recovery from the Jan. 26 reaction low at 130.16, although near-term EUR bulls would only become comfortable once the 136.21 objective has been met. Room for further gains to 136.95 would then be on offer. Weakness will attract support while above 133.50, protecting key backup at 133.00.
        Weekly chart EUR/JPY trend: Bearish.
        Intraday EUR/CHF: Stretches higher to bring resistance at 1.0650 within striking distance. The structure of the bull wave from the 0.9776 higher low has produced a minimum upside objective at 1.0820, which would become accessible on a concerted wave of bull pressure through 1.0650. Support at 1.0500/20 defines corrective downside risk.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: The strong bounce from Tuesday's five-and-a-half year low at 0.7626 is challenging resistance at 0.7853. That 0.7626 low would be significantly strengthened on a break above resistance at 0.7884, uncovering 0.7922 and threatening to re-open the 0.80 level, should 0.7922 crack. Intra-day support at 0.7784 defends Wednesday's Asian session low at 0.7754, and only below 0.7754 would create additional downside scope towards 0.7710.
        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

        February 04, 2015 02:37 ET (07:37 GMT)

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