EUR on Its Knees, USD to Extend Gains

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Pushes into new two-week lows below 1.1118, leaving the 1.10 level vulnerable. This week's EUR weakness puts significant distance from last Friday's three-month high at 1.1468, cementing a three-pronged bear divergence on the daily Slow Stochastic indicator that should prompt weakness to the 1.1037/66 support area. The 38.2% Fibonacci retracement level of the two-month 1.0457 to 1.1468 corrective rally also lies in the 1.1037/66 area. Layers of resistance highlight the limited scope for corrective gains, starting at 1.1121.
        Weekly chart EUR/USD trend: Bearish.
        Intraday USD/JPY: Surges through 120.51 into two-month highs, to challenge the 121 level. This week's USD strength bolsters the Apr. 30 reaction low at 118.50, and USD bulls have the Mar. 20 lower high at 121.20 in their sights. Above 121.20 lies resistance at 121.35 and 121.53, and this move is likely to bring the 2015 peak at 122.04 back into the overall picture further down the line. The 120 level has been secured, and layers of support start from 120.73.
        Weekly chart USD/JPY trend: Bullish.
        Intraday GBP/USD: Projected support at 1.5414 came a little too close for comfort for GBP bulls, following Tuesday's push to 1.5448. GBP bulls need to keep 1.5414 intact to maintain the robust wave structure of the five-week recovery from 1.4568, although resistance at 1.5535 would have to be regained in order to create additional recovery scope to 1.5625. A concerted wave of GBP bear pressure would manage to force a break below 1.5414, threatening to close the upside gap between 1.5274 and 1.5355 from May 8.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: An upside objective at 0.9648 has been generated by Tuesday's upward breach of 0.9360. That breach completed a double-bottom base at the recent 0.9072/78 lows, and the focus is now on the May 5 intra-wave lower high at 0.9413. Above 0.9413 would then open the 0.9485/0.95 area. The pattern's measured objective at 0.9648 would come into the immediate picture on a break above 0.9555. Congestive support between 0.9320 and 0.9300 on Tuesday's Market Profile chart hampers scope for downside risk.
        Weekly chart USD/CHF trend: Range.
        Intraday EUR/GBP: Tuesday's fall to 0.7150 came close to confirming a bull failure at Monday's marginal high at 0.7283. EUR bears remain in control of the near-term despite the subsequent recovery to 0.7233, and the 0.7150 is likely to come under fresh pressure during Wednesday's session. Loss of 0.7150 would then expose the key lows at 0.7118/23, which is the last major line of defence protecting the March base at 0.7015. Respite would be achieved on a break above 0.7194, offering additional EUR strength to 0.7220.
        Weekly chart EUR/GBP trend: Range.
        Intraday EUR/JPY: EUR bears are in control, and Monday's low at 133.95 remains vulnerable. This week's sharp decline from a near four-month high at 136.96 has just breached a two-week rising support line at 134.13, and a sustained push lower would expose 133.95, while threatening higher lows at 133.49 and 133.12. Corrective upside risk is hampered by resistance between 135.31 and 135.85.
        Weekly chart EUR/JPY trend: Range.
        Intraday EUR/CHF: Resistance around the 1.05 level has refused to budge, leaving the prospect of a potential truncated bull failure at last Friday's 1.0505 high. Tuesday's low at 1.0404 will remain vulnerable while intra-day resistance at 1.0465 caps, and a push below 1.0404 would uncover 1.0384 and 1.0370. It would require a push into new session highs above 1.0465 to make the 1.0505 high accessible.
        Weekly chart EUR/CHF trend: Range.
        Intraday AUD/USD: Extends the bear wave from the May 14 peak at 0.8163, and the 0.79 level has been breached. AUD bears have the May 8 orthodox higher low at 0.7863 in their sights, which is now a pivotal level. That 0.7863 low is the termination point of a bull pennant continuation pattern, whose measured upside objective at 0.8250 was not met. Therefore, broader-term AUD bulls will look to defend 0.7863 resolutely. Resistance at 0.7956 and 0.7995 suggest upside scope is severely restricted.
        Weekly chart AUD/USD trend: Bullish.
        * 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 20, 2015 02:42 ET (06:42 GMT)

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