EUR/GBP Targets 7-Yr Lows; JPY Weak

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: The successful defence of support at 1.1270 on Tuesday keeps the short-term action confined within a bear channel beneath last week's bull failure high at 1.1534. However, layers of resistance, starting from 1.1335, line up to defend the 1.1499/1.1534 highs, with notable internal resistance at 1.1409/22 and 1.1468 expected to cap the upside. Loss of 1.1270 would expose the bear channel's falling support line at 1.1240, threatening additional downside risk to 1.1170.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: Tuesday's surge through 119.23 has extended during Wednesday's Asian session, to meet the important 119.66 objective. However, the broader wave structure of the recovery from the mid-January low at 115.85 suggests the push higher is part of a corrective advance. Resistance at 119.72 stands in the way of further USD gains, ahead of 120.45. Single print support at 119.16 and 118.81 exist on Tuesday's Market Profile chart, guarding Tuesday's low at 118.40.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: Tuesday's bullish outside day enhances last week's completion of an imperfect inverse Head-and-Shoulders base pattern. The bounce from 1.5197 remains above the trend-reversal pattern's broken neckline, and a break above 1.5274 and 1.5315 is now sought, which would re-open Friday's 1.5352 high. GBP bulls are targeting a measured upside objective at 1.5454, and Market Profile charts indicate scope to 1.5510 is possible. Only a reversal below 1.5197 would prompt a fresh wave of weakness, exposing 1.5160 and potentially 1.5040.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: Edges higher towards the Feb. 2 reaction high at 0.9347. Friday's low at 0.9177 is set to become a USD bear failure, although resistance at 0.9289 and 0.9312 would have to be broken in order to drag the 0.9347 high into the immediate picture. For now, the 0.9177/0.9347 trading range is set to remain intact. Internal support at 0.9250 has become pivotal, and below 0.9232 would bring attention to the lower end of the trading range.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: Clings onto support at the Jan. 26 reaction low at 0.7408, although a push lower is expected. It was last week's push lower from 0.7591 that completed a seven-day bear flag continuation pattern on the daily chart, and a push below the base of the flag at 0.7408 would prompt new seven-year lows towards 0.7365, where the influential 260-period moving average lies on the monthly chart. Furthermore, the falling support line of a six-year bear channel lands at 0.7265 throughout February. Tuesday's high at 0.7458 would have to be regained just to provide respite, and only above 0.7510 would improve the outlook for EUR bulls.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: Probes above 135.35 into near three-week highs, signalling a stronger rally to 137.76 in the coming sessions. The upward breach of 135.35 strengthens the Feb. 4 higher low at 132.55 while extending the broader bull wave from the Jan. 26 base at 130.16, and the 137.76 objective is a wave equality target. Weakness will attract strong support while above 133.67, which has protection at 134.40 and 134.70.
        Weekly chart EUR/JPY trend: Range.
        Intraday EUR/CHF: Rises out of a bull pennant base pattern, signalling upside scope to 1.0597. The push through 1.0490 strengthens Monday's low at 1.0414, although the 1.0597 objective would only become accessible on a break above 1.0530 and 1.0550. Support at 1.0460 and 1.0433 guard the 1.0414 low.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: Projected support at 0.7714 needs to hold, in order to provide a strong defence for the Feb. 3 reaction low at 0.7626. That said, Friday's high at 0.7877 is a pending bull failure, and a break below support at 0.7748 and 0.7734 is the immediate threat. That makes the 0.7710/14 support area pivotal, and the 0.7626 low would become extremely vulnerable on a sustained break below 0.7710. Recapturing ground above 0.7796 would lift the tone, although the 0.7877 high would only become accessible on a break above 0.7812 and 0.7843.
        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

        February 11, 2015 02:28 ET (07:28 GMT)

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