Following is a selection of comments from analysts on important technical developments in the foreign exchange market.
EURO/DOLLAR: "Thinking rebound from $1.2120/25 is an "A-B-C correction" as discussed late on Thursday, the final "C wave" higher (following latest $1.2180-$1.2200 B wave consolidation) apparently complete at $1.2220/25 (13-14 Sep lows/Former key support). We see nice bearish divergence signals on the hourly MACD (moving average convergence/divergence) histogram and favour slide towards $1.2175-$1.2160. Loss there is needed to confirm thoughts of another try at the $1.2135-$1.2125 area and possible an eventual $1.2110-$1.2070. Above $1.2225-$1.2235 and potential improve for $1.2275/80.
Trade wise: We're short from $1.2210 and looking to take 50 percent profit at $1.2175-$1.2165 (if seen) and tighten our protective stop on the balance."
DOLLAR/YEN: "Continues to swing broadly in a 6-day 109.25-110.40 yen range, currently up through the 61.8 percent retracement of the latest 110.40-109.40 downleg at 110.00. A bit concerned with developing overbought reading on the hourly slow stochastic and need to clear 110.30 2-week falling resistance line to firm 110.40-50 yen and potentially 110.70-111.10 on a breach there, but that will be tough given the developing near-term overbought condition."
STERLING/DOLLAR: "Cable recovery from $1.7740 area extends to probe $1.7970. Hourly studies are starting to fade with a bearish divergence now seen on the slow stochastic, adding to thoughts of weakness. Loss of $1.7920/25 would confirm slide to initial $1.7885, possibly $1.7855-$1.7830 on a loss there.
EURO/DOLLAR: "Two key-reversal weeks down plus the break below $1.2334 delivered strong evidence that we are at least displaying a bigger fourth wave setback with a minimum target of $1.1179. The latest rebound has to be classified as a B-wave rally only as long as $1.2652 has not been broken decisively."
DOLLAR/YEN: "Breaking above the last top at 112.34 yen the overall negative picture has almost been neutralised. But unless neckline resistance has also been cleared we are still in danger of testing the last bottom at 101.25 yen or the head and shoulders target at 95.75."
STERLING/DOLLAR: "As long as the market remains below $1.8067 we have to expect lower prices towards $1.7375, $1.6958 and maybe even $1.6676 as a completing C-leg down of a bigger A-B-C correction pattern." Currency bid prices at 11:11 a.m. (1511 GMT). All data taken from Reuters calculated from the levels at 16:30 (2030 GMT) in the previous New York session.
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