EUR/USD

Temporary rebound holds above 1.3000.

  • Early signs of basing continue to develop above the important 1.3000 psychological level. However, the potential multi-month reversal pattern still weighs.

  • A decisive close below 1.3000 is required to unlock the important multi-month reversal pattern into 1.2625 (16 Jan swing low).

  • Meanwhile, only a sustained daily close back above 1.3263 (26th April intraday high), puts this scenario on hold for a potential recovery into our upside target zone at 1.3460/86 (200-day average).

  • Inversely, the USD Index is testing the lower side of a multi-week triangle consolidation pattern. Support remains at 78.66 and 78.09.

  • Expect these levels to act as one of the last points of defence for a re-launch of the greenback’s recovery which is still part of the bullish cycle into 80.73 (15th March high) and 81.78 (13th Jan swing/12 month high).

STRATEGY: SHORT 1 at 1.3270, Obj: 1.2650, Stop: 1.3270


GBP/USD

Bulls retain control.

  • GBP/USD remains buoyant having broken through and settled above the previous swing high at 1.6063 as bulls retain overall control.

  • The breach of key resistance at 1.5985/1.6063 signalled an important breakout and we continue to look for 1.5985/1.6063 to hold for the next leg of the 1.5235 advance for minor resistance at 1.6455 then psychological 1.6500.

  • Failure to capitalise on the upside potential over the next few sessions and/or loss of 1.5985 would suggest bull exhaustion, although we would need to see the loss of 1.5603 (12th March low) to threaten a much deeper retracment of the 1.5235 advance.

STRATEGY: LONG 1 at 1.5915, Obj: 1.6290, Stop: 1.6030.


USD/JPY

Pullback targets key level at 80.00.

  • USD/JPY’s bearish pullback is capped beneath previous resistance/old support at 82.00. The move was originally triggered by a DeMark™ exhaustion signal that was activated in late February.

  • This has been followed by signs of strong psychological support near 80.00 from where a higher low may now form.

  • This may offer renewed buying opportunities in our model portfolio for USD/JPY’s major long-term 40-year cycle upside reversal.

  • Only a decisive confirmation above 83.40 and 84.18 will extend the bullish recovery which had already risen almost 10% in only 7 weeks! The key medium-term upside trigger level can be found at 85.50.

STRATEGY: Awaiting renewed buy trade setup.


USD/CHF

Pressure on the lows.

  • USD/CHF is back on the defensive again after seeing a brief respite after failure to sustain the break of support at 0.9091 on the first attempt, support now being re-tested.

  • While we could yet see a bounce as a range takes shape we remain bearish longer-term seeing the 0.9252 16th April high as the end of a bearish consolidation pattern threatening the 0.9002 swing low (2nd April) then key support at 0.8931 in an extension of the YTD bear phase.

  • We would need to see settlement back over 0.9222/0.9252 would revive the recovery from 0.9002 exposing 0.9252 then the 0.9335 March swing high as a potential base pattern builds.

STRATEGY: Sell Limit 3 at 0.9170, Objs: 0.9085/0.9005/0.8930, Stop: 0.9255


USD/CAD

Next support at 0.9776.

  • USD/CAD is continuing to push lower beneath its multi-week range and now approaches next support at 0.9776 (TD Risk Level).

  • Only a sustained break back beneath 0.9776 would resume the multi-month downtrend into next support at 0.9726.

  • Meanwhile, the bulls still need to push above the long-term 200-day moving average, then 1.0080 to signal a potential upside recovery.

  • Such a scenario would target resistance at 1.0160, then 1.0250 and resume the larger cycle recovery higher into 1.0424 (14th December high).

  • EUR/CAD, which tends to share a positive correlation with EUR/USD, is still range bound after the recent sharp drop which was triggered by a DeMark™ exhaustion signal. Watch for renewed downside pressure back into key support at 1.2877 (2012 low).

STRATEGY: Await new buy trade setup.


AUD/USD

Pushing back above the 200-day average.

  • AUD/USD has found support at 1.0230 and is now pushing back above its multi-week trend channel and 200-day average.

  • Only a sustained close above 1.0470/90 and 1.0670 would put this scenario on hold and target resistance at 1.0857 (29th Feb high).

  • Our cycle analysis continues to favour further weakness beneath 1.0230, into 1.0146 (09th Jan low) and thereafter will likely target the parity level.

  • Keep in mind that such a move would signal a break from the multi-month distribution pattern and its 3-year uptrend.

  • Elsewhere, the AUD/NZD is completing a counter-trend rally, which has recently triggered a DeMark™ exhaustion signal. Key support can be found at 1.2465 and 1.2360.

  • AUSD/JPY remains weak, weighed down by a multi-week double top pattern. Any further mean reversion targets the 200-day average and would signal more unwinding of global risk appetite capital flows.

STRATEGY: Await new sell trade setup


GBP/JPY

Bullish consolidation.

  • GBP/JPY is seeing some corrective activity as the powerful rebound from 127.10 to 131.80 unwinds.

  • The recovery signalled likely completion of a bull market correction and while we could see further side/down action over the short-term we look for 127.10/129.58 to contain dips prior to seeing an attack on the 133.50 swing high (21st March), above which opens 135.12 next as this year`s rally from 117.28 extends.

  • In the meantime, loss of 127.10 would warn that the structure from 116.84 was a large corrective phase, increasing the risk of seeing a return to 121.69 then psychological 120.00 as medium-term bears gain control.

STRATEGY: Buy Limit 3 at 128.50, Objs: 130.00/131.50/133.00, Stop: 127.00


EUR/JPY

Holding up well.

  • EUR/JPY has found good support just above 106.00 as bulls come back in after the pullback from 108.00.

  • With the pullback from 108.00 seen as a potentially complete correction of the 104.62 move and the the 111.44/104.62 March/April pullback seen as a potentially complete correction of the advance from 97.03 we look for the eventual re-capture of 111.44 in due course as the bull market extends.

  • Re-capture of 108.00 would suggest that scope for an acceleration higher, while loss of 104.62 would threaten an extension of the 111.44 decline towards the 101.83/102.21 congestion before a base can be attempted.

STRATEGY: Buy Limit 3 at 106.50, Objs: 107.90/109.60/111.10, Stop: 105.30.


EUR/GBP

Limit upside scope.

  • EUR/GBP has seen a bounce but broken support at 0.8222 (9th Jan swing low) continues to cap bears retain control.

  • While we could see some corrective activity over the short-term to unwind a temporary oversold condition the overall tone remains negative while resistance at 0.8222/0.8277 caps with the downtrend targeting major support at 0.8142 then 0.8067 in due course.

  • Settlement back above 0.8277 would suggest basing potential, with scope then for a re-test of 0.8424 then important 0.8506, above which would confirm a base pattern calling for sustained gains.

STRATEGY: Look to sell near 0.8222.


EUR/CHF

Key support at 1.2000 holds for now.

  • EUR/CHF has seen a breach of the 1.2000/1.2040 support zone but so far this area is holding as the threat of SNB intervention continues to loom.

  • While we could see further corrective upside activity the overall tone remains negative after breach of the February swing low at 1.2031 and while 1.2050/1.2070 caps we see risk of an attack on retracement support at 1.1905 initially as the major downtrend extends.

  • Settlement above 1.2050/1.2070 from here would suggest basing potential, while re-capture of 1.2147 would confirm a base pattern calling for a return to broken support at 1.2226 initially.

STRATEGY: Sell Limit 3 at 1.2030, Objs: 1.1950/1.1905/1.1850. Stop: 1.2060.


GOLD

Short-term bearish channel targets $1600.

  • Gold remains locked within a short-term bearish channel, beneath its long-term 200-day average as pressure continues to weigh into $1600.

  • It still worth remembering the dramatic $103 one-day drop will continue to offer psychological pressure for investors and traders.

  • Watch for a decisive break below $1600 (psychological) and $1567, thereby offering further setbacks into $1522 (29th Dec swing low).

  • A sustained confirmation beneath here would resume risk for a much larger decline that we have been anticipating. Keep in mind that our cycle analysis continues to highlight downside targets into $1460 and $1300.

  • This would likely trigger a temporary, but dramatic setback that would ultimately offer a unique tactical buying opportunity into the coming summer/autumn months of 2012.

  • Only a sustained confirmation above $1716 and $1810 will put the bearish scenario on hold and offer further extended recovery higher on gold.

STRATEGY: Await renewed sell trade setup.


SILVER

Minor unwinding recently testing key level at $30.0000.

  • Silver has triggered a minor unwinding today after recently testing psychological level at $30.0000.

  • A sustained close beneath here will extend the multi-month downtrend into $28.9525 (TDST Level) and 26.0700 (Sep 26th low).

  • Meanwhile, the bulls need to push back above the 200-day average to maintain any potential upside recovery into $37.4750 (29th Feb high).

STRATEGY: Await renewed sell trade setup.