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
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.
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.
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
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.
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 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
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.
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.
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.
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.
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.