USD Struggling to Build on Recent Gains

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Monday's recovery from 1.1270 keeps the short-term action confined within a bear channel beneath last week's bull failure high at 1.1534. Layers of resistance, starting from 1.1359, 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. Monday's marginal low at 1.1270 would become vulnerable on a break below 1.1317, and below 1.1270 would expose 1.1243 and 1.1170.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: Continues to edge lower from Friday's 119.23 high, to challenge support at 118.33. USD bulls are not in control of the short-term, in spite of Friday's surge to 119.23, because a wave equality target at 119.66 remains elusive. Furthermore, the wave structure of the broader recovery from the Jan. 16 low at 115.85 suggests USD bulls will struggle to meet that 119.66 objective. Loss of 118.33 would expose single print support at 118.00 on last week's Market Profile chart, and additional backup lies at 117.55.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: The setback from Friday's 1.5352 high is corrective, because the daily chart is dominated by the completion of an imperfect inverse Head-and-Shoulders base pattern last week. That trend-reversal pattern generated a measured upside objective at 1.5454, and support at 1.5200 and 1.5160 will look to prevent a deep corrective setback. Recapturing ground above 1.5315 is required to bring Friday's five-week high at 1.5352 back into the immediate picture, opening 1.5454 and potentially 1.5510.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: There is still the threat of weakness to 0.9150, especially after Monday's failure to break above resistance at 0.9312. Action from the Feb. 2 reaction high at 0.9347 is taking the shape of a bull flag continuation pattern, and a break into new session lows below 0.9195 would expose Friday's 0.9177 low and the downwave equality target at 0.9150. Recapturing ground above 0.9289 would significantly lift the tone, and above 0.9312 would prompt a swift return to the 0.9347 peak.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: The Jan. 26 reaction low at 0.7408 survived a test on Monday, although upside risk is restricted while 0.7510 caps. 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 is expected in the coming sessions, threatening new six-year lows towards 0.7350. Resistance at 0.7478 guards 0.7510, and only above 0.7510 would improve the outlook for EUR bulls.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: Last week's high at 135.35 continues to cap the recovery from the Jan. 25 reaction low at 130.16. The setback from Friday's 135.19 high highlights the importance of the pending bull failure at 135.35, although only a break below Monday's low at 133.67 would signal room for more weakness to the equally-important higher lows at 132.55 and 132.00. Regaining ground above 134.98 is required to re-open the 135.19/135.35 highs.
        Weekly chart EUR/JPY trend: Bearish.
        Intraday EUR/CHF: The setback from Friday's high at 1.0642 is struggling to meet its downwave equality target at 1.0350. The bounce from Monday's low at 1.0414 is looking to recapture ground above 1.0490, that would signal further gains to the wave's lower high at 1.0530. Monday's low at 1.0414 would then become a significant bear failure on a break above 1.0530, bringing the focus back onto 1.0550 and 1.0590. Only a reversal below 1.0414 would put EUR bears back in control, exposing 1.0380 and 1.0300.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: Two consecutive doji candles on the daily chart suggests an impasse has developed between Monday's 0.7748 low and Friday's 0.7877 high. Friday's 0.7877 high is a pending bull failure, and resistance at Tuesday's session high at 0.7843 is the last line of defence protecting the 0.7877 high. Such a move would upgrade the recovery from the Feb. 3 reaction low at 0.7626, generating new upside risk to the 0.8000 area. Loss of 0.7791 and 0.7769 would drag the 0.7748 low back into focus, and below the Feb. 5 higher low at 0.7734 would confirm the bull failure at 0.7877, uncovering 0.7710 and 0.7664 - the last lines of defence protecting the 0.7626 low.
        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 10, 2015 02:27 ET (07:27 GMT)

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