Daily Market Technicals

FX Outlook

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

EUR/USD back in middle of range

Todays outlook: Weekly outlook:
Daily EUR/USD Chart
Comment: EUR/USD has bounced from its near term support line at 1.4107 (redrawn). We are inclined to view the market as ranging/consolidating ahead of a break lower. Immediate resistance is offered by the 55 day ma at 1.4404 today, ahead of the May to June resistance line at 1.4549. While capped here our bias is negative. Targets remain the 200 week ma at 1.4017, the 1.3968 recent low and the 200 day ma at 1.3871. A close below this zone of support would be extremely negative and target the 1.3570/1.3620 region (55 week ma and the 2010-2011 uptrend) as a minimum. Key resistance remains 1.4732, the 78.6% retracement. We view this as an interim peak. Todays trade: Short 1.4500, move stops to 1.4550. Cover 1.4020. Shorter term (1-3 weeks): Risk shifted to downside, target 1.4010. Medium term (1-3 months): To remain below the 1.50/1.5145 region. Support line at 1.4107 Resistance line at 1.4549 Current Price: 1.4359

Support 1.4107* 1.4048 1.4021* 1.4017** 1.3968**

Reason Support line 16th May low th 28 Mar low 200 week ma May low

Resistance 1.4404 1.4442 1.4460 1.4500* 1.4520

Reason 55 day ma Last wk high Minor Fibo 14 June high Early April high

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

USD/CHF RSI is diverging

Todays outlook: Weekly outlook:
Daily USD/CHF Chart
Comment: USD/CHF has again sold off, but we note that the daily RSI did not, this divergence reflects a loss of downside momentum. However there is currently little signs of reversal and the market has tough near term resistance at .8547/54 (early May low and the 31st of May high) ahead of .8577, the top of the channel and while capped here the near term risk is for further weakness. The move below .8327 signals a slide to .8222/00. This is the location of TD support (Tom de Mark support) and point and figure target. Both imply that this is now the end stage of the down move. According to the Elliot wave count this is now a 5th of a 5th and if short we would tighten up the stops/consider lightening the position. Todays trade: Square, attempt minor shots .8350, .8400, stops .8415. Reverse shorts on dips to .8222/00 tight stops. Shorter term (1-3 weeks): .8351 target has been reached, reversal expected. Medium term (1-3 months): Target at .8400-.8351 has been met, look for signs of stabilisation, below here targets .8200/.8143.
Support .8327* .8309** .8222 .8200 .8000 Reason 7 June low Recent low TD support P&F target Psychological
th

Current Price: 0.8310

Resistance lies at .8577

Resistance .8423, .8554* .8577** .8641* .8852** .8895

Reason Early May low Downtrend chan. 55 dma March low th 24 May high

RSI diverging

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

GBP/USD Sitting on the 1.5957 May low

Todays outlook: Weekly outlook:
Daily GBP/USD Chart
Comment: GBP/USD has held the 1.5937 March low on a closing basis for the second time. We have a lot of divergence on the hourly chart and the daily RSI has yet to confirm the recent low, which leads us to suspect that the market is not quite ready to break lower. We need to see a CLOSE below 1.5957 to validate the break lower. Rallies will find intraday resistance at 1.6050, 1.6130 and should now be contained by 1.6265. Trend line resistance lies at 1.6356 and while capped here the outlook is bearish. Targets remain 1.5855, the 55 week moving average then 1.5510/00 (38.2% retracement of move up from 2010). Todays trade: Short average 1.6170, lower stops to 1.6265. Cover 1.5855. Shorter term (1-3 weeks): Market has failed at trend line, look for slide back to 1.6058/54. Medium term (1-3 months): Neutral to negative looking for 1.7050 to hold the topside. 1.5937 May low exposed
Support 1.5937** 1.5855** 1.5891* 1.5752** 1.5708/00** Reason March low 55 week ma Fibo th 25 January low Oct 2009 low Resistance 1.6037 1.6080 1.6130,1.6200 1.6260/62** 1.6328 Reason 200 day ma Minor Fibo Last wk high 55 dma

Current Price: 1.5972

Resistance line at 1.6356

Resistance line at 1.6113

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

USD/JPY Above last weeks high

Todays outlook: Weekly outlook:
Daily USD/JPY Chart
Comment: USD/JPY is well placed to break higher and has closed above last weeks high at 81.08. This suggests a run up towards 81.79/82.21, the 55 and 200 day ma, which in turn guards the 2007-2011 downtrend at 83.33. Support lies at 80.05/10 ahead of the 79.79/57 support area (61.8% Fibonacci retracement of the March-to-April advance and May low). Todays trade: Long 80.20, add 79.80 and place stops below 79.50. Partially cover 82.20 and cover the remainder 83.25. Shorter term (1-3 weeks): Looking for current correction lower to stabilise around the 80.00 level. Medium term (1-3 month): Look for a recovery to the downtrend at 84.02. This will act as the break point to the April high at 85.53, then 87.55 en route to 94.50 (inter-year target). Current Price: 81.08

Support 80.17 80.00* 79.92** 79.79* 79.57**

Reason Support line Psych. support 1995 low 61.8% Fibo May low

Resistance 81.79* 82.21/23** 82.21* 83.30** 83.98*

Reason 55 dma May high 200 dma March high February high

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

EUR/JPY resistance line exposed

Todays outlook: Weekly outlook:
Daily EUR/JPY Chart
Comment: EUR/JPY has seen a decent rebound from the 200 day ma at 114.00. It has to clear its downtrend and 55 day ma at 116.83/92 in order to confirm upside potential, but looks to be positioning itself to do so. This would target the June high at 117.90 en route to 123.33, the April high. Below the market lies key support namely the 200 day ma at 113.98, the 55 week moving average at 113.13 and the 61.8% Fibonacci retracement at 112.93. Only failure at 112.90 will target 110.10, the 78.6% retracement of the rally higher from the spike low. Todays trade: Shorts stopped. Attempt longs on dips to 116.00, 115.60, stops 113.40. Cover 123.00 Shorter term (1-3 weeks): 200 day ma holding Medium term (1-3 months): Based at 106.50/105.45. Targets 123.33, then 130.00. 200 day moving average is at 114.00 Current Price: 116.50

Resistance line at 116.83

Support 114.00** 113.40** 113.13** 112.93** 111.95

Reason 200 dma May low 55 wma 61.8% Fibonacci th 28 Feb low
th

Resistance 116.92** 116.83** 117.90** 118.36* 119.54*

Reason 55 dma Resistance line June high 50% retracement 61.8% Fibo
th

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

EUR/GBP probing 2 year channel at .8980

Todays outlook: Weekly outlook:
Weekly EUR/GBP Chart
Comment: EUR/GBP is probing the 2 year channel at .8980. This is now exposed. Dips are expected to hold .8821/.8790 (20 day ma and support line), for a break above .8780. A CLOSE above here will target initially .9042 and then .9140/48 (2010 high and long term Fibo). Longer term we would allow for .9414. The market will remain well placed to break higher while above .8723, the mid June low. Todays trade: For any remaining shorts from .8945 leave stops over .8980, and exit at .8900. Reattempt longs here, add .8850 and place stops below .8790. Shorter term (1-3 weeks): Neutral to positive above .8723. Medium term (1-3 months): Targets the .9042 May high. Then 9140/48. Current Price: .8977

Channel at .8980

Support .8821 .8790* .87235** .8675** .8681*

Reason 55 day ma Supp line Last wk low th 12 May low 4 month SL

Resistance .8977** .8980** .9000** .9042** .9148**

Reason 8 June high channel Psych. resistance May high March 2010 high
th

Break above channel will target .9440/48

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

EUR/CHF daily RSI has diverged

Todays outlook: Weekly outlook:
Daily EUR/CHF Chart
Comment: EUR/CHF charted an inside day yesterday which in conjunction with the divergence of daily RSI continues to reflect a loss of downside momentum. We would allow for a rebound to the top of the 2 month channel at 1.2075. This together with the 55 day ma at 1.2096 and the 3 month downtrend at 1.2197 offer formidable resistance. We have point and figure targets at 1.1790 and using the 1.24-1.32 consolidation to predict lower implies losses to 1.1600. Extreme caution is warranted however as we suspect this is the end stage of the down move. The market is at the base of a 9 month channel, the RSI has diverged and the Elliott wave count is a 5th of a 5th. Todays trade: Holding small longs 1.1885, add 1.1840 stops below 1.1800, cover and resell 1.2025/50 stop/reverse over 1.2200. Shorter term (1-3 weeks): Negative bias while capped by downtrend channel. Medium term (1-3 months): Targets 1.1795/00 then 1.1600. RSI has diverged 1.2075 Current Price 1.1935

Support 1.1808 1.1795* 1.1700 1.1600 1.1500

Reason Low P&F targets Meas target

Resistance 1.1960/65 1.2053 1.2113** 1.2096** 1.2215**

Reason Minor Fibo 55 day ma Channel RL downtr

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

Other technical analysis reports we publish are:

Monday: Tuesday: Wednesday: Thursday: Friday: FX Emerging Markets Technicals, Strategic Technical Themes; Bullion Weekly Technicals; Commodity Weekly & Commodity Currencies Weekly Technicals; technical contribution to the Emerging Markets Bi-Weekly; Fixed Income Weekly Technicals.

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

Explanation:

This technical analysis report is based primarily on Dow theory and is using bar and candlestick charts. Support and resistance levels with no asterisk denote minor levels. One asterisk denotes an area of reasonable support or resistance, two stars are for strong areas of support or resistance. Uptr = Uptrend, connecting 3 low points. SL = Support line. Support lines have only 2 points of contact and are not as important as uptrends. Dtr= Downtrend, connecting 3 high points. RL = Resistance line. Resistance lines connect only 2 high points and are not as important as downtrends. Fibo = Fibonacci retracement we use the 23.6%, 38.2%, 50%, 61.8% and 78.6% levels. Fibox = Fibonacci extension we use the 61.8%, 78.6%, 100%, 138.2%, 161.8% and 261.8% levels. Pivot point = an area on the chart which acts as both support and resistance. St = Short term level (for example St Fibonacci retracement refers to the nearest highs and lows) Lt = Long term level (for example Lt Fibonacci retracement refers to longer term highs and lows) 55 dma = 55 day (simple) moving average 200 wma = 200 week (simple) moving average

Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

Disclaimer
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Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

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Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011

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Karen Jones
Head of FICC Technical Analysis Tel. Mail +44 207 475 1425 karen.jones@commerzbank.com

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Karen Jones | Technical Analysis Research | Wednesday, 29 June 2011