EUR to Strengthen Further; GBP Vulnerable

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: Powered to a ten-week high at 1.1371 on Wednesday, and further gains are in store. The remarkably-resilient euro is on track for gains to the 1.15 area in the coming sessions, where two Fibonacci targets coincide with a major lower high at 1.1534 from early February. The monthly Market Profile charts indicate resistance at 1.1401, then the mid-February lower highs at 1.1450. The single print vacuum to 1.1296 on Wednesday's Market Profile chart offers support, and strong backup lies at 1.1270.
        Weekly chart EUR/USD trend: Bullish.
        Intraday USD/JPY: The 118.52/118.50 double-bottom base that dominates the daily chart has been further tempered, while support at 119.14 is under threat. This week's bear wave from Tuesday's bearish outside day high at 120.51 is threatening to nibble away at the 118.85/119.14 congestive support area on the weekly Market Profile charts, and 118.85 is the last line of defence protecting the 118.52/118.50 lows. Recapturing ground above 119.70 would provide respite, although only above 120.15 would offer additional room for upside risk.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: Enhances the recovery from Tuesday's bear trap low at 1.5091, to bring resistance at 1.5305 into the immediate picture. However, a break above 1.5335 is required to drag last week's 1.5496 reaction high out of the murky distance, and GBP has the occasion to be volatile in the coming sessions. Also, last week's long-shadow bear hammer candle indicates limited upside scope. This week's Market Profile chart identifies strong support at 1.5120, guarding the 1.5091 low. Backup support lies at 1.5025/40.
        Weekly chart GBP/USD trend: Range.
        Intraday USD/CHF: Sustains this week's push into 14-week lows, to put the 0.90 area on alert. Wednesday's push lower to 0.9114 increases downside momentum, and a downwave equality projection from Tuesday's bearish outside day intra-wave lower high at 0.9413 lands at 0.8985. Wednesday's Market Profile chart highlights resistance at 0.9195 and 0.9240, limiting scope for upside risk.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: Extends the bounce from 0.7316, to set twelve-week highs above 0.7450. It was last Friday's break above 0.7385 that upgraded the recovery from the Mar. 11 reaction low at 0.7015, and a new wave equality target has been generated at 0.7496. That 0.7496 objective would become the focus on a break above 0.7462 and 0.7479. Weakness will attract support while above 0.7399, and only below 0.7370 would concern EUR bulls.
        Weekly chart EUR/GBP trend: Bullish.
        Intraday EUR/JPY: Euro bulls retain control, following the push into ten-week highs during Thursday's Asian session. Wednesday's push and session close above 135.29 brings the influential 260-day falling moving average at 135.96 into focus, which defends lower highs at 136.22 and 136.70 that were set in February. The 134.88/135.03 support area suggests downside risk is limited, guarding 134.10.
        Weekly chart EUR/JPY trend: Bullish.
        Intraday EUR/CHF: The recovery from Tuesday's low at 1.0349 is struggling to secure a foothold above the 1.04 level. That's because the rally is correcting the impulsive bear wave from the Apr. 30 reaction high at 1.0524, and resistance at 1.0410 on Tuesday's Market Profile chart ties in with a wave equality projection from Wednesday's 1.0357 low. The 1.0349 low will become vulnerable again on a break below 1.0357, threatening 1.0324.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: The strong recovery from Thursday's Asian session low at 0.7925 targets a full retracement to Wednesday's 0.8031 high. That 0.8031 high is the last line of defence protecting last week's 0.8076 peak, and 0.8076 is a key resistance level because it defines the broader three-month expanding symmetrical triangle trading range. Failure to keep Thursday's buying tail on the Market Profile chart intact would concern AUD bulls, and a break into session lows below 0.7925 would spark a deeper setback towards 0.7835.
        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 07, 2015 02:30 ET (06:30 GMT)

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