USD/JPY
Chart Levels:
Support 90.00..89.45..89.00..88.00.
Resistance 91.00..92.25..92.55..93.25.
Likely to remain trapped between ‘channel’ resistance and pivotal support at 88.00 for the rest of this month. Random moves will probably become ever smaller, fading ahead of targets, as the yen looks for intermediate and long term direction. Note that the Lagging Span encounters resistance from the candles starting this week, so we feel that repeated downside testing is more likely than probing the upper edge. There is also a good chance that were we to trade sideways across the page the yen would break trendline resistance, but not in a meaningful or strong way. We remind that we are very close to critical support and the danger of interventionist comments and other moves by the authorities is high.
EUR/USD
Chart Levels:
Support 1.3585..1.3532..1.3433..1.3250.
Resistance 1.3700..1.3790..1.3840..1.3965.
Despite all the bad news the Euro has managed for a third consecutive week to hover above 61% Fibonacci retracement support, with weekly closes inside the growing Ichimoku ‘cloud’, forming impressive ‘spike lows’ along the way. This adds weight to our view that the Euro is trying to find a base for the corrective move of the last three months. Helped along by other major currencies, where CAD had been leading. We favour a cautious squeeze to 1.3800/1.3840. Note that it is still oversold, that bearish momentum has stalled (and might turn bullish on a sustained break above 1.3850), and the US Justice Department is looking into hedge fund activity regarding Euro sales. A short squeeze looks possible, here and in GBP.
EUR/JPY
Chart Levels:
Support 122.00..120.70..120.00..119.00.
Resistance 124.25..125.25..126.00..127.55
Probably the best we can hope for these coming four to six weeks is a series of messy random moves around current levels so that we move sideways across the page until we meet the flat-bottomed weekly Ichimoku ‘cloud’. Many will also be hoping that this pair will continue to hold above the psychological level of 120.00. However, note that all elements of this chart point to holding a medium term bearish position. Therefore further out we shall continue to allow for a drop to roughly the 118.00 area. Expect variations on this theme for other yen crosses. Moves in yen crosses will probably be caused by the currencies as the USD/JPY is also expected to move broadly sideways for the rest of this month.
GBP/JPY
Chart Levels:
Support 136.00..134.65..133.75..132.00.
Resistance 137.50..139.30..140.00..141.00.
Last week’s large ‘spike low’ ahead of 75% Fibonacci retracement support suggests an interim low has been found. Note that this is a pound phenomenon as something similar can be seen in many sterling pairs. We favour a strong bounce this week and maybe the following one too, back up to 50% Fibonacci retracement and the 9-week moving average at 141.00. Then watch for signs of topping as all aspects of this chart suggest a medium term short position. Later this year we still favour another move lower, most likely when the lower edge of the weekly Ichimoku ‘cloud’ drops sharply in early April. This should take the cross down to the 130.00 area. Note how this held much of the time in December 2008 and March 2009.
GBP/USD
Chart Levels:
Support 1.5100..1.5000..1.4781..1.4700.
Resistance 1.5240..1.5375..1.5575..1.5620.
Nail-biting as Cable dips below 61% Fibonacci retracement support as all and sundry write it off as a lost cause, then completes a strong ‘hammer’ on the weekly candle. This combination suggests that at last an interim low to the correction that started in August last year is over. Note also the very thin weekly Ichimoku ‘cloud’ mid-March which hints at a possible break above 1.6000 then. Open interest soared over the last month, on almost record volume, suggesting many have piled in recently; short-covering ought to get it back up to the 9-week moving average at 1.5620 sooner than many might think possible. Being terribly oversold, and bearish momentum stalling, are other factors that back up our view.
EUR/GBP
Chart Levels:
Support 0.8955..0.8875..0.8750..0.8635.
Resistance 0.9055..0.9155..0.9240..0.9300.
Another interesting, and almost unbelievably all too perfect-looking chart involving the pound. Last week’s powerful ‘shooting star’ against ‘channel’ resistance should mark another interim top maintaining the series of lower highs established since the beginning of last year. Over the coming week expect a drop to the 9-week average and ‘trendline’ at 0.8875. Because momentum is fairly neutral allow for a struggle above the top of the weekly Ichimoku ‘cloud’ until month-end prior to a re-test of the flat-bottomed ‘cloud’. Either very late this month or some time in April we favour another test of increasingly important support at 0.8635. On the Bank of England’s basis sterling should strengthen to 83.00.
