Currencies Remain Under Pressure into Early Week; Technical Outlook
By
Joel Kruger, Technical Strategist
The fallout from the
aggressive risk liquidation seen in Friday trade has rippled into the
early week and markets remain under pressure as fear of contagion in the
eurozone intensifies. The question of whether Greece will receive its
next tranche of Eur8B is the key focus, and the added news that the
country will miss budget deficit targets that were set out just a few
months ago, despite a wave of austerity, has not helped matters. With
markets once again on the move, we will get right into the technicals to
provide a quick update of the outlook for the major currencies.
ECONOMIC CALENDAR
TECHNICAL OUTLOOK
EUR/USD:
The market remains under intense pressure and the latest corrective
price action has now officially come to an end with a fresh lower top
confirmed at 1.3690 following the drop to multi-day lows below 1.3360.
This should open the door for a measured move downside extension towards
our next objective by 1.3000 over the coming sessions, with only a
break back above 1.3690 to delay outlook and give reason for pause.
USD/JPY:This
is a market that looks like it trying very hard to establish some form
of a base after recently setting fresh record lows just under 76.00.
Although the downtrend remains intact and has been fairly intense,
longer-term studies welcome the prospects of the formation of a material
base and shift in the overall structure. Price action over the past
several days has been confirming, with the market very well supported in
the 76.00’s and unable to extend the downtrend to fresh record lows.
From here, we look for the establishment back above the 50-Day SMA to reaffirm our recovery outlook and accelerate gains towards next key resistance by 80.25 further up. Ultimately, only a daily close back under 76.00 delays.
GBP/USD:
The latest corrective price action has stalled out by 1.5715, and it
looks as though the market could be in the process of carving a fresh
lower top ahead of the next downside extension back below 1.5325 over
the coming sessions. Below 1.5325 should then accelerate declines back
under 1.5000, but in the interim, look for any rallies to be well capped
ahead of 1.5700, with only a break back above to delay outlook and give
reason for pause.
USD/CHF:
Although daily studies are showing overbought and warn of the
potential for a short-term corrective pullback, the recent daily close
back above the 200-Day SMA is significant and now opens the door for the
next upside extension towards 0.9500 further up. Medium-term and
longer-term studies still show plenty of room for upside ahead, while
the short-term outlook also remains constructive above 0.8645.
Ultimately, only back under 0.8645 delays short-term outlook and would
open the door for a more sizeable corrective decline. Still, even at
that point, buying into dips would be the preferred strategy.
--- Written by Joel Kruger, Technical Currency Strategist
FROM Dailyfx.com
No comments:
Post a Comment