USDJPY and EURUSD Technical Analysis

• GBPUSD key weekly reversal
• AUDUSD decision time
• USDJPY volume details serves as warning for bulls

EUR/USD
Weekly




-“There is a long term level to be aware of. The line that extends off of the 2008 and 2010 lows is at about 1.0545 this week. The March 2003 low is at 1.0499. The next area of long term interest probable isn’t until about .96 (2001 high and Sep 2002 low). Above 1.08 would indicate a behavior change.” EURUSD finished the week above 1.08, indicating potential for a period of sideways trading in the coming months. The first important resistance stems from former slope support just below 1.13 over the next several weeks.

GBP/USD
Weekly



-“A breakout from a 1 month inverse head and shoulders pattern is valid above today’s low (breakout day) but GBPUSD does face channel resistance at this level. The reversal pattern’s objective is 1.5494, which is in line with the December low at 1.5485.”
-“GBPUSD met the target and traded into the mid-1.5500s this week. There is good resistance here from former lows and slopes on multiple time frames. A breakdown towards 1.4250-1.4350 may be underway.” The weekly reversal casts doubt on the call for 1.4350. Be aware of slope resistance that caught the February high near 1.55 over the next several weeks.

AUD/USD
Weekly



-“AUDUSD Focus remains on the lower end of the channel in the low .70s but channel resistance must hold. A push above would indicate an important behavior change.” It’s decision time for AUDUSD as the rate is pushing the limits of resistance that has contained the downtrend since September. A break higher opens up .8180 (former support line turned resistance in January).

NZD/USD
Weekly




-“NZDUSD traded to the 61.8% retracement of its 3 year range today (.7929) and the next level of interest probably isn’t until the 2013 Labor Day gap at .7722. One can’t help but notice that an epic double top is possible with a target of .5898. That would trigger on a drop below .7370.”
-If the major double top is going to prove successful, then the February high needs to remain in place. Risk of a double bottom has emerged that would yield an objective of .8038 although Kiwi would probably face pressure from longer term slope resistance near .7780.

USD/JPY
Weekly



-“Continue to favor a broad range as 119.80-120.70 as resistance and 116.40-117.10 as support. A move through either one of these zones would define target zones of 124-128 and 110-114.”
-“USDJPY is flirting with a breakout from the cited resistance zone (120.70). The next area of interest on the upside would be 123.16-124.13. A daily close below 119.50 would indicate a reversal.” The lack of volume on strength since January warns that all is not well with the USDJPY uptrend. A daily close below 119.50 would probably usher in 116.50 quickly.

USD/CAD
Weekly




-“The contracting range indicates potential for a triangle from the high. Typically, a triangle will lead to a thrust in the direction of the preceding trend.” Triangle targets are 1.3074 and 1.3245. If the path is still higher, then former triangle resistance should provide support if reached (about 1.2550).” The slight new high satisfies minimum requirements for a triangle thrust. USDCAD risks a return to 1.19 (old resistance line).

USD/CHF
Weekly




-“An upper parallel and long term trendline are possible resistance near 1.0180 before the January high.” 1.0180 is still a level to know for resistance but also be aware of 1.0021 as a level that could influence as resistance now. Support is estimated at .9288.


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Talking Points

• EUR/USD holds above key supports zone
• USD/JPY flirts with resistance
• GBP/USD testing important Gann level

USD/JPY

• USD/JPY has traded steadily higher since finding support near a key Gann level in the 118.40 area last week
• However, our near-term trend bias is negative while below 120.60
• Weakness under 119.50 is needed to re-instill downside momentum into the exchange rate
• A minor turn window is eyed on Thursday
• A close over the 61.8% retracement of the March range at 120.60 would turn us positive on USD/JPY

USD/JPY Strategy: Square

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	119.50	119.80	120.20	120.30	120.60

GBP/USD

• GBP/USD has come under modest pressure after repeated failures late last month at the 38% retracement of the February-March decline
• Our near-term trend bias is lower in Cable while below 1.5000
• A close below 1.4760 is needed to confirm that a new leg lower in the pound is underway
• A very minor turn window is eyed later this week
• A close over 1.5000 would turn us positive on GBP/USD

GBP/USD Strategy: Like the short side while under 1.5000

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
GBP/USD	1.4635	1.4760	1.4765	1.4875	1.5000

EUR/USD



Surveying the FX landscape this morning things looks a bit tricky (or more tricky than usual). We are coming off the end of the 1st quarter and the movements/flows that entails and following it up with a very illiquid few days as most of Europe is about to go on a 4-day weekend for Good Friday and Easter. Throw into the mix a major data event like US employment figures with the continuous overhang of Greece and we have quite the potential powder keg. With respect to EUR/USD we are of the view that as long as the exchange rate sits above the 61.8% and 78.6% retracements of the March range around 1.0685-1.0585 the door remains ajar to a further correction higher – potentially north of 1.1040. Traction under 1.0585 wouldn’t put the downtrend completely into the “free and clear”, but it would be a pretty clear negative development that further sets the stage for a broader downside resumption.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com


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Talking Points:

• USD/JPY Technical Strategy: Flat
• Support: 119.66, 118.93, 118.20
• Resistance: 120.68, 121.41, 122.13

The US Dollar continued to move higher against the Japanese Yen as expected after taking out the top of a Flag chart pattern. A daily close above the 38.2% Fibonacci expansion at 120.68 exposes the 50% level at 121.41. Alternatively, a reversal below 119.66 (38.2% Fib retracement, channel top resistance-turned-support) opens the door for a challenge of the 50% retracement at 118.93.

Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind, we will remain flat for now.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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• EURUSD largest weekly decline since September 2011
• GBPUSD 1.4350 back in play again
• USDJPY 121.10 looms large

EUR/USD
Weekly




-EURUSD rolled over at slope resistance but several longer term technical observations are worthy of note; the rate found low at an important long term level (line off of 2008 and 2010 lows) and the ownership profile (as per COT) is at a record. The speculative crowd has never been more bearish…ever. Such conditions typically precede important reversals…although not necessarily right away. A break above the resistance lines (old support) would indicate that behavior has changed. Until then, there is nothing bullish to work with.

GBP/USD
Weekly




-This week’s decline on high volume brings 1.4350 back into play. That level is represented by a slope confluence as well as the 1.4950-1.5551 range expansion. Only a move back above this week’s high would suggest that the rate is not headed lower.

AUD/USD
Weekly




-AUDUSD continues to trade between well-defined slope lines but beware of a possible broadening bottom (very difficult pattern to trade).
-Trade outside of the bearish upper parallel that has contained strength since late October would shift focus to a former support line (turned resistance in January) near .8180.

NZD/USD
Weekly



-“NZDUSD traded to the 61.8% retracement of its 3 year range today (.7929) and the next level of interest probably isn’t until the 2013 Labor Day gap at .7722. One can’t help but notice that an epic double top is possible with a target of .5898. That would trigger on a drop below .7370.”
-Near term, a failed double bottom triggered 2 weeks ago. Failed patterns can serve as triggers in the other direction (in this case down).

USD/JPY
Weekly



-“Continue to favor a broad range as 119.80-120.70 as resistance and 116.40-117.10 as support. A move through either one of these zones would define target zones of 124-128 and 110-114.”
-Near term, 120.60-121.10 looms as resistance. This zone is defined by late December highs, the January high, support in mid-March, and former slope support.

USD/CAD
Weekly



-USDCAD is either consolidating before another push higher or forming an important top. There is no way to know what the outcome will be ahead of time. A break higher would set targets at 1.3075 and 1.3246. A break lower would indicate an important reversal and set targets at 1.2074 and 1.1903.

USD/CHF
Weekly




-USDCHF has reversed from 9 year trendline resistance. Focus is on the median line (about .9300) that extends off of the 2012 high. This line crosses through highs in 2013 and the October 2014 low. The 52 week MA is near this line as well.



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Talking Points

• EUR/USD falls to lowest level in three weeks
• GBP/USD prints lowest level in almost 5 years
• USD/JPY stuck at a long-term crossroads

EUR/USD

• EUR/USD broke below the 78.6% retracement of the late-March range yesterday
• While below 1.0830 our near-term trend bias is lower in the euro
• The 127% extension of the 2005-2008 adavance around 1.0440 looks to be the next major pivot for the rate
• A minor turn window is eyed around the end of the week
• Interim resistance is seen around 1.0685, but only a move through 1.0830 would turn us positive on the single currency

EUR/USD Strategy: Square

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.0440	1.0520	1.0565	1.0585	1.0685

GBP/USD

• GBP/USD fell to its lowest level in almost 5 years on Monday before finding support near the 161.8% extension of the January to February advance near 1.4575
• Our near-term trend bias is lower in Cable while below 1.4760
• A move under 1.4575 is now needed to trigger the next leg lower in the rate
• A very minor turn window is eyed here
• A close back over 1.4760 would turn us positive on the pound

GBP/USD Strategy: Like the short side while below 1.4760

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
GBP/USD	1.4575	1.4600	1.4630	1.4700	1.4760

USD/JPY

Every now and again we like to step and take a look at where exchange rates stand in the longer-term scheme of things. USD/JPY remains an interesting chart in this context and partially explains the choppy range bound nature of trading in the pair since December. Looking at the monthly chart we can see clear sets of long-term Fibonacci clusters. Last year, for instance, the exchange rate started the year by stalling out around 105.50 which was a nice convergence of the 50% retracement of the 2002-2011 decline and the 61.8% retracement of the 2002-2011 decline. This led to more than two quarters of range trade before the rate finally broke free from the cluster on the back of the surprise BOJ QE announcement late last year. The coiled pent up nature of the market (all time low levels of vol in 2014) saw USD/JPY slice right through the confluence zone around 113.00 to trade to the next cluster between 118.60 and 122.40 where the trend has clearly stalled out over the past few months. Are we getting a repeat of consolidations past? It certainly seems so. As such we suspect USD/JPY will continue to be “dead money” until the 78.6% retracement of the 2002-2011 decline at 122.40 convincingly gives way.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Points:

• USD/JPY Technical Strategy: Flat
• Support: 118.93, 118.20, 117.30
• Resistance: 119.66, 120.68, 121.41

The US Dollar declined as expected against the Japanese Yen following the appearance of a bearish Dark Cloud Cover candlestick pattern. A daily close below the 50% Fibonacci retracementat 118.93 exposes the 61.8% level at 118.20. Alternatively, reversal above the 38.2% Fib at 119.66 opens the door for a challenge of the 38.2% Fib expansion at 120.68.

Prices are wedged too closely between near-term support and resistance levels to justify taking a trade on a long or short side from a risk/reward perspective. With that in mind, we will continue to stand aside until a more attractive opportunity presents itself.

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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I guess the chart will eventually go further down and feel like opening a sell right away. My target is at 118.50.

This pair broke my stop-loss at 119.55, but now it seems finally to start a down trend. I'm going to open a sell at 119.85 with the target at 118.60 and stop-loss at 119.95.

• EURUSD major resistance test
• USDJPY risk is lower after 120 rejection
• NZDUSD bearish wedge is possible

EURUSD Daily

-“EURUSD rolled over at slope resistance but several longer term technical observations are worthy of note; the rate found low at an important long term level (line off of 2008 and 2010 lows) and the ownership profile (as per COT) is at a record. The speculative crowd has never been more bearish…ever. Such conditions typically precede important reversals…although not necessarily right away. A break above the resistance lines (old support) would indicate that behavior has significantly changed and open up a run on 1.13.” It is decision time traders.

GBP/USD Weekly

-“The sharp turn higher (and pending weekly reversal) is promising for longer term bottoming prospects, especially in light of the mentioned divergence and 2 large range weekly reversals in the last 5 weeks.” Focus is now on the sliding parallel (lower red line) just shy of 1.55 over the next several weeks.

AUD/USD Weekly

-“AUDUSD continues to trade between well-defined slope lines but beware of a possible broadening bottom (very difficult pattern to trade).”
-“Trade outside of the bearish upper parallel that has contained strength since late October would shift focus to a former support line (turned resistance in January) near .8180.” AUDUSD is outside of the mentioned upper parallel. The behavior change indicates potential for a bullish outcome.

NZD/USD Weekly

-“NZDUSD traded to the 61.8% retracement of its 3 year range today (.7929) and the next level of interest probably isn’t until the 2013 Labor Day gap at .7722. One can’t help but notice that an epic double top is possible with a target of .5898. That would trigger on a drop below .7370.”
-“The NZDUSD double top has failed to this point but slope resistance comes into play more or less at the current level and near .7800.” Also, a wedge may be underway from the February low. The bearish pattern would complete on a break below the support line from that pattern.

USD/JPY Weekly

-“Continue to favor a broad range as 119.80-120.70 as resistance and 116.40-117.10 as support. A move through either one of these zones would define target zones of 124-128 and 110-114.”
-“Near term, watch for resistance now near 120.08. The next support on a break would be the median line just above 117.” The high this past week was 120.09. Risk is lower as long as USDJPY is below that price.

USD/CAD Weekly

-“The breakdown from a 2 and a half month topping pattern could ‘kick-off’ a much larger decline but near term focus is on early congestion from 1.1931 to 1.2046. There is slope support (former resistance) at the latter level next week. Volume of this magnitude can indicate near term capitulation. 1.23 is an important trading pivot.” USDCAD made high at 1.2305 this week, which keeps the rate pressured lower towards mentioned levels.


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Talking Points

• Euro sees highest volume in years
• USD/JPY volume starts to rise supporting advance

Daily Volume Chart: EUR/USD

• EUR/USD traded at its highest level in over two-months this past week
• FXCM volume rose to its highest level in years over the last couple of days which is supportive of the advance
• Daily OBV touched its highest level since early January
• A close under 1.0860 on above average volume is needed to turn the outlook negative on the euro

Daily Volume Chart: USD/JPY

• USD/JPY touched its lowest level in over a month before rebounding sharply this week
• The uptick in volume over the past few days is positive
• A divergence in daily OBV is also potsntially positive for the exchange rate
• A close under 118.00 on above average volume would turn us negative on the exchange rate

Daily Volume Chart: USD/CAD

• USD/CAD fell to its lowest level in three months this past week
• The general rise in volume during this decline is supportive of the downtrend
• The sharp decline in daily OBV is also supportive
• A daily close above 1.2300 on above average volume is needed to turn the outlook more positive for funds

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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