GBP/USD: Surge in selling pressure last Friday

EUR/USD

Challenging the resistance at 1.3699.

• EUR/USD made an intraday bearish reversal last Friday near the resistance at 1.3699, which favours short-term caution. Hourly supports stand at 1.3625 (intraday low) and 1.3583 (22/01/2014 high). Resistances can now be found at 1.3739 (24/01/2014 high) and 1.3819 (30/12/2013 high).

• In the longer term, the recent false breakout near the key resistance area defined by 1.3811 (11/12/2013 high) and the long-term declining trendline (around 1.3890) suggest a limited upside potential. We favour a gradual corrective phase towards the 200 day moving average (around 1.3360).

Await fresh signal.

GBP/USD

Surge in selling pressure last Friday.

• GBP/USD declined sharply last Friday, negating the positive implications of the recent new highs. Supports stand at 1.6451 (22/01/2014 low) and 1.6396 (20/01/2014 low). A resistance now lies at 1.6668 (24/01/2014 high).
  
• The break of the major resistance area between 1.6381 and 1.6466 favours a further long-term rise towards the major resistance at 1.7043 (05/08/2009 high). Given the overall overbought conditions, a break of this level is unlikely in the next weeks. A key support stands at 1.6305 (25/12/2014 low).

Await fresh signal.

USD/JPY

Monitor the test of the support at 101.63.

• USD/JPY extended its losses on Friday, breaking the supports at 102.86 and 102.50. Monitor the bounce attempt near the support at 101.53. Hourly resistances now stand at 102.98 (23/01/2014 low) and 103.59 (24/01/2014 low).

• The failure to break the resistance at 105.50 (61.8% retracement of the decline that started in June 2007) coupled with general overbought conditions favours a corrective phase towards the support at 101.63. A strong support lies at 99.57 (19/11/2013 low, see also the 200 day moving average), while a major resistance stands at 110.66 (15/08/2008 high).

Await fresh signal.

USD/CHF

The key support at 0.8988 has been broken.

• USD/CHF has broken the key support at 0.8988, opening the way for a full retrace from the rise that started at 0.8800 (27/12/2013). Hourly supports can be found at 0.8903 (24/01/2014 low) and 0.8860 (30/12/2013 low). The short-term technical structure is negative as long as prices remain below the resistance at 0.8992 (24/01/2014 high). Another resistance lies at 0.9039 (intraday high).

• From a longer term perspective, the structure present since 0.9972 (24/07/2012) is seen as a large corrective phase which has potentially reached completion. The support area defined by 0.8931 (24/02/2012 low) and 0.8833 favours a potential medium-term base formation. A key resistance stands at 0.9250.

Await fresh signal.

USD/CAD

Short-term weakness.

• USD/CAD made an intraday bearish reversal last Thursday near the resistance at 1.1125, suggesting a short-term fading buying interest. Hourly supports are given by 1.1052 and the short-term rising trendline (around 1.1000). A resistance now stands at 1.1174.

• In the longer term, the decisive break of the major resistance at 1.0870 validates a multi-year basing formation whose minimum upside potential is around 1.1910. Key resistances can be found at 1.1125 (17/08/2009 high) and 1.1725 (08/07/2009 high).

Await fresh signal.

AUD/USD

Trying to bounce.

• AUD/USD made new lows on Friday, confirming a persistent bearish trend. The technical structure is negative as long as prices remain below the resistance at 0.8888 (22/01/2014 high). An initial resistance lies at 0.8775 (24/01/2014 high). An hourly support can now be found at 0.8660.

• The long-term technical pattern remains negative and favours a further decline towards the key support at 0.8067 (25/05/2010 low). A support can be found at 0.8316 (01/07/2010 low). A significant resistance can be found at 0.9168 (02/12/2013 high).

Await fresh signal.

GBP/JPY

Short-term corrective phase underway.

• GBP/JPY is in a corrective phase, as can be seen by the declining channel. Monitor the potential bounce near the support at 168.35 (13/01/2014 low). Another support lies at 166.58 (17/12/2013 low). Hourly resistances can be found at 170.18 (17/01/2014 low) and 171.22 (23/01/2014 low).

• The break of the major resistance at 163.09 calls for further long-term strength towards the resistance at 179.17 (15/08/2002 low). However, the deep overbought conditions suggest some short-term caution. The long-term technical structure remains supportive as long as the key low at 154.73 (09/10/2013 low) holds. A first key support lies at 165.88 (05/12/2013 low).

Await fresh signal.

EUR/JPY

The support at 140.50 has been broken.

• EUR/JPY declined further on Friday, breaking the support area between 140.50 and 140.33 (20/01/2014 low). Supports can now be found at 139.20 and 138.43. Hourly resistances stand at 141.03 (23/01/2014 low) and 141.77 (24/01/2014 high, see also the declining trendline).

• The long-term technical structure remains positive as long as the support at 131.15 (08/10/2013 low) holds. However, the deep overbought conditions suggest some caution. A first key support stands at 138.43 (04/12/2013 low). A resistance lies at 147.04 (16/09/2008 low).

Buy limit 2 at 139.45, Obj: Sell 50% at 142.88 and the rest at 145.05, Stop: 138.36.

EUR/GBP

Bouncing.

• EUR/GBP continues to improve after Thursday's bullish engulfing pattern. The hourly resistance at 0.8264 has been broken and the steeper declining trendline is challenged. Another resistance stands at 0.8350. Hourly supports can now be found at 0.8248 (23/01/2014 high) and 0.8210 (24/01/2014 low).

• In the longer term, the technical structure remains negative as long as prices remain below the resistance at 0.8350 (13/01/2014 high). Monitor the support implied by the 61.8% retracement (of the 2012-2013 rise) at 0.8160. Another key support can be found at 0.8082 (01/01/2013 low).

Await fresh signal.

EUR/CHF

The key support at 1.2281 has been broken.

• EUR/CHF declined sharply again on Friday, breaking the key support at 1.2281. A support stands at 1.2221. However, the symmetrical triangle favours further short-term weakness towards 1.2192. An initial resistance lies at 1.2264 (intraday high). Another support can be found at 1.2301.

• In September 2011, the SNB put a floor at 1.2000 in EUR/CHF, which is expected to hold in the medium-term. We generally favour further longer term upside for EUR/CHF towards the psychological threshold at 1.30.

Long 3 at 1.2329, Objs: 1.2660/1.2985/1.3195, Stop: 1.1998 (Entered: 2013-01-23).

GOLD

Moving above the key resistance at 1268.

• Gold has moved above the key resistance area defined by its falling channel and 1268. However, the potential rising wedge and the lack of confirmation from silver favour some caution. Another resistance can be found at 1294. Hourly supports stand at 1257 (24/01/2014 low) and 1245 (22/01/2014 high, see also the rising trendline).

• Longer term, we continue to view the rise from 1181 (28/06/2013 low) as a counter-trend move within an underlying bearish trend. Therefore the test of the key support at 1181 is seen as the minimum downside risk. Another key support stands at 1045 (05/02/2010 low). A first key resistance is given by the medium-term declining channel (around 1268).

Await fresh signal.

SILVER

The declining channel remains intact.

• Silver has successfully tested the resistance area defined by 20.52 (see also the declining channel). Hourly support can be found at 19.66 and 19.35.

• In the longer term, the failure to break the key resistance area between 24.87 (26/04/2013 high) and 26.07 (26/09/2011 low) coupled with an underlying bearish trend call for lower prices. The break of the key support at 20.50 favours a move towards the next key support at 18.23 (28/06/2013 low).

Await fresh signal.