USD Continues Its Descent; GBP Strong

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

        LONDON (Dow Jones)--Rolling 24-hour chart levels:
        Intraday EUR/USD: The May 7 peak at 1.1392 is within striking distance, and a push into new ten-week highs is on the cards. The powerful bull wave from Monday's 1.1131 low has a higher low in place at 1.1202, and a clean break above 1.1392 would open the mid-February highs at 1.1450. Also, a broader-term 1.618 Fibonacci extension target lands just above 1.15. Layers of support exist down to 1.1267, indicating limited scope for corrective weakness.
        Weekly chart EUR/USD trend: Bullish.
        Intraday USD/JPY: Wednesday's downward breach of 119.03 generates a new minimum downside requirement target at 118.83. Wednesday's USD selloff consigned Tuesday's bull trap high at 120.28 to bull failure status, and yet, the move lower is still regarded as consolidation of the broader 118.50 to 120.51 advance. Single print resistance at 119.40 and 119.69 on the Market Profile charts severely hampers scope for corrective upside risk, and only above 119.85 would lift the tone.
        Weekly chart USD/JPY trend: Range.
        Intraday GBP/USD: A new 2015 high of 1.5768 was set on Wednesday, and GBP bulls are showing no signs of fatigue. New highs above 1.5768 are expected on Thursday, targeting multiple resistance that coincides with the late November intra-wave lower high at 1.5824. Furthermore, the broader-term bull wave from the Apr. 13 reaction low at 1.4568 does suggest 1.6050 is possible. Weakness will attract support while above 1.5675, and strong backup lies at 1.5615, then 1.5570.
        Weekly chart GBP/USD trend: Bullish.
        Intraday USD/CHF: A full retracement to the May 7 reaction low at 0.9072 has been signalled, although a downside break is not yet on the cards. Wednesday's emphatic bearish marabuzo candle puts further distance from Tuesday's bull trap high at 0.9360, and the wave structure has a 1.618 Fibonacci extension target landing very close to the 0.9072 low. However, that 0.9072 low is a pending bear failure, suggesting USD bulls will be gathered in numbers in order to prevent a strong downside break. Recapturing ground above 0.9186 would provide respite, although only above 0.9250/70 would lift the tone.
        Weekly chart USD/CHF trend: Bearish.
        Intraday EUR/GBP: The successful defence of the key Apr. 23 higher low at 0.7118 on Wednesday re-opens resistance at 0.7227. Wednesday's rejection of a three-week low at 0.7123 sparks consolidation of the powerful bear wave from the May 7 peak at 0.7482, and a break above 0.7227 would open 0.7250 and 0.7275. However, the large downside gap between 0.7312 and 0.7381 continues to dominate the daily chart, and it should not be forgotten that the 0.7482 peak is a pending bull failure. Weakness will attract support while above 0.7162.
        Weekly chart EUR/GBP trend: Range.
        Intraday EUR/JPY: Negates the Head-and-Shoulders top pattern on the daily chart, bringing last week's 135.99 high into the immediate picture. Wednesday's strong bounce from 134.24 extends the bull wave from Monday's 133.49 low, and a wave equality target has been generated at 136.04. A clean break above 135.99 would also bring the Feb. 12 lower high at 136.70 into view. Strong support at 134.45 is guarded by 135.00.
        Weekly chart EUR/JPY trend: Bullish.
        Intraday EUR/CHF: Remains trapped in a range between 1.0385 and last Friday's 1.0450 high. The broader recovery from last week's low at 1.0305 wants to challenge the Apr. 30 peak at 1.0524, which makes the near-term range high at 1.0450 vulnerable to renewed pressure. Loss of the 1.0370/85 support area would bring the 1.0305 low back into the picture, threatening to retest the April reaction low at 1.0235.
        Weekly chart EUR/CHF trend: Bearish.
        Intraday AUD/USD: The decisive push to the upside above 0.8076 paves the way for further AUD gains to 0.8250. Wednesday's strength completed a two-week bull pennant continuation pattern on the daily chart, and the broader three-month expanding symmetrical triangle pattern has become a major base. A push above Thursday's Asian session high at 0.8163 would open the 200-day falling moving average at 0.8233, and the 0.8250 objective is derived from the bull pennant pattern. Support between 0.8050 and 0.7985 on both the Market Profile and Volume Profile charts indicate limited scope for corrective weakness.
        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.
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        (END) Dow Jones Newswires

        May 14, 2015 02:36 ET (06:36 GMT)