EUR Correcting Higher, GBP Vulnerable

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Corrects higher from Monday's Asian session low at 1.0822, but the 1.10 level has been lost. Friday's Volume Profile chart highlights two nodes of strong resistance at 1.0890 and 1.0969, and a single print vacuum up to 1.0929 on Friday's Market Profile chart lies in between, all indicating limited corrective upside risk. Loss of intra-day support at 1.0838 would drag the 1.0822 low back into the immediate picture, while threatening a downside break towards the September 2003 low at 1.0763.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: Powered to a new three-month high at 121.29 on Friday, and further gains are on the cards. Resistance levels at 121.29 and 121.54 are the last lines of defence protecting the December 2014 peak at 121.86, and the semi-annual Ichimoku chart indicates strong overhead resistance at 122.28. Weakness will attract support while above 120.14, which has protection at 120.41.
        Weekly chart USD/JPY trend: Bullish.
        Intraday GBP/USD: Monday's Asian session low at 1.5028 is all that guards the 2015 lows at 1.4990 and 1.4953. The five-week bear wave from the Feb. 26 peak at 1.5550 is raising serious doubts over the inverse Head-and-Shoulders base pattern that took most of January to complete, incorporating the 1.4990 and 1.4953 lows. Resistance levels at 1.5130 and 1.5195 would have to be broken in order to provide respite, and only a move above Friday's high at 1.5255 would lift the tone.
        Weekly chart GBP/USD trend: Bearish.
        Intraday USD/CHF: Upside momentum is on the increase, suggesting parity is not out of the question in the coming sessions. The broader bull wave from the Feb. 6 intra-wave higher low at 0.9177 has generated a wave equality target at 1.0090, and Monday's session high at 0.9874 is its highest since Jan. 15. Weakness will attract strong support while above 0.9783, and backup exists at 0.9738.
        Weekly chart USD/CHF trend: Bullish.
        Intraday EUR/GBP: Friday's push to a new seven-year low at 0.7182 met a key target at 0.7197 on the way. However, that 0.7182 low will remain vulnerable while the 0.7220/42 resistance cluster caps the upside, and the broader downtrend still has room to 0.7028. It would take a recovery above 0.7285 to create additional corrective upside risk, opening 0.7325 and 0.7430.
        Weekly chart EUR/GBP trend: Bearish.
        Intraday EUR/JPY: The Jan. 26 reaction low at 130.16 is within striking distance, following Friday's plunge. Last week's weakness consigned the Feb. 12 peak at 136.70 to bull failure status, and the 130.16 low would be exposed on a break below Monday's Asian session low at 130.71. Resistance levels at 132.00 and 132.30 severely hampers scope for corrective strength, and only a move above 132.30 would lift the tone.
        Weekly chart EUR/JPY trend: Bearish.
        Intraday EUR/CHF: Remains in a range between 1.0610 and 1.0811. The ability to limit Friday's weakness to 1.0640 should give bulls a lift though, and a break above 1.0705 would prompt further gains to 1.0730, threatening 1.0750 and 1.0760. The structure of the broader bull wave from the Jan. 23 higher low at 0.9776 has not yet been damaged, offering the chance of an eventual upside breakout above 1.0811. Only a move below 1.0640 and 1.0610 would put bears in control, exposing 1.0535.
        Weekly chart EUR/CHF trend: Bullish.
        Intraday AUD/USD: The corrective recovery from Monday's Asian session low at 0.7684 has limited scope to 0.7769/77. Friday's trend-defining bearish outside day extends the seven-day bear wave from the Feb. 26 peak at 0.7914, and the February lows at 0.7626/44 would become the focus on a break below 0.7684. Last week's Market Profile chart indicates solid resistance at 0.7819 is the level to break if bulls are to regain some control.
        Weekly chart AUD/USD trend: Range.
        * 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

        March 09, 2015 04:02 ET (08:02 GMT)

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