EUR on The Back Foot; USD Recovering

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: The setback from Thursday's ten-week high at 1.1392 is deepening, exposing last week's low at 1.1066. There is the potential of a Head-and-Shoulders top pattern developing on the daily chart, which suggests the 1.1066 low will attract some EUR bull defence, at least on a temporary basis. Failure to hold 1.1066 during Monday's session would expose backup support at 1.1037. Recapturing ground above 1.1192 is required to provide respite, but only above 1.1228 would lift the tone.
        Weekly chart EUR/USD trend: Bullish.
        Intraday USD/JPY: The successful defence of the 119 level last week drags the May 5 reaction high at 120.51 back into the picture. Friday's high at 120.24 is the last line of defence protecting that 120.51 high, and a push higher would signal further gains to the Apr. 13 lower high at 120.84. Monday's Asian session low at 119.40 has already been consigned to bear failure status, which has protection at 119.67.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: GBP counter-trend strength remains capped by the falling 200-day moving average at 1.5526. Friday's surge produced a large upside gap between 1.5274 and 1.5355 on the daily chart, and broader-term GBP bears will look to force a break below 1.5355, with the purpose of closing the gap at 1.5274. Failure to do so would then give GBP bulls licence to test the upside, where resistance at the Feb. 26 reaction high at 1.5550 is the main objective.
        Weekly chart GBP/USD trend: Range.
        Intraday USD/CHF: Extends the strong recovery from last week's three-month low at 0.9072, and scope to the May 5 intra-wave lower high at 0.9413 is on offer. It was Thursday's break above 0.9208 that left the 0.9072 low as a pending bear failure, and resistance at 0.9355 is all that stands on the path to the 0.9413 lower high. Weakness will attract strong support while above 0.9250 and 0.9160, and USD bulls will be comforted by last week's trend-neutralizing doji candle.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: Friday's low at 0.7226 is on the verge of breaking, leaving support at 0.7203 vulnerable. The downside threat is likely to extend to the Apr. 23 higher low at 0.7118, and Thursday's three-month high at 0.7482 would become a significant bull failure on a break above 0.7118. A large downside gap exists between 0.7381 and 0.7312 on the daily chart, which has protection at 0.7275.
        Weekly chart EUR/GBP trend: Range.
        Intraday EUR/JPY: Last week's low at 133.12 is braced for a test, following the deepening setback from Thursday's eleven-week high at 135.99. The bearish crossover on the daily Slow Stochastic indicator highlights waning upside momentum, and a break below 133.12 would create additional downside risk to 132.25. Congestive resistance between 134.40 and 134.80 indicates limited upside scope.
        Weekly chart EUR/JPY trend: Bullish.
        Intraday EUR/CHF: The strong bounce from a twelve-week low at 1.0305 marks the floor for the new trading range, and Friday's 1.0450 high marks the range ceiling. The 1.0305 low protects the April lows at 1.0235, and a concerted wave of bull pressure would manage to force a break above 1.0450, opening 1.0480 and the Apr. 30 peak at 1.0524. The 1.0370/90 support area hampers scope for downside risk.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: Support at 0.7859 is likely to be breached during Monday's session, leaving projected support at 0.7835 vulnerable. The setback from last week's high at 0.8031 protects the key Apr. 29 reaction high at 0.8076, and the May 5 reaction low at 0.7790 is also vulnerable. The broader-term picture is still defined by the three-month expanding symmetrical triangle trading range, which relies on the 0.8076 peak to remain intact. Loss of 0.7790 would then expose 0.7724. Resistance at 0.7931 and 0.7970 hampers scope for corrective upside risk.
        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.
        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

        May 11, 2015 02:35 ET (06:35 GMT)

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