Following is a selection of comments from analysts on important technical developments in the foreign exchange market.
EURO/DOLLAR: "Breaking above the old top at $1.2928, the market is now facing a pretty strong resistance zone that stretches all the way from $1.2978 up to $1.3160. Only a break above this resistance zone would open further upside potential to $1.3217/43, $1.3353 (back-adjusted top) or $1.3555 to $1.3650, what should be used to lock in profit.
Having said that, we reversed our longs towards $1.2978 just recently and gave it another shot on the long side towards the first strong support at $1.2866/59 (hourly/daily trend lines) with a reversal stop on a decisive hourly close below to repeat the same procedure towards $1.2666/16 (old low/38.2 percent) and $1.2497/59 (50 percent/old top).
A complete reversal though would only be indicated on a break below massive support between $1.2461 and $1.2377 (old tops/trend line/61.8 percent). On the upside, in case the market would manage to recover we'd reverse into strength towards $1.3039 with a reversal stop on a decisive hourly close above $1.3160."
DOLLAR/YEN: "Falling short of reaching the 76.4 percent retracement at 136.70 yen beginning of 2002, the market started a severe setback that looked to head for the head & shoulders target at 95.75 yen straight away. But reversing just above the old 101.25 yen bottom, the market broke the row of lower tops at 112.34 yen and re-tested the neckline at 114.72 yen as resistance where it failed. It would have taken a decisive break and close above to reverse the bear-trend of the last two years and to resume the former bull-trend (2000-2002).
This is still possible but starting to penetrate the last Fibonacci-support at 106.12 yen (76.4 percent of the latest advance) decisively the odds are definitely in favour of the bears now who are looking for an extension down to 103.42/101.25 yen (old lows) and ultimately 95.75 yen (head & shoulders target)."
EURO/DOLLAR: "(We) Think that a correction in the euro is still underway. Immediate resistance for today comes in at $1.2945...$1.2970 (Fibonacci) and more crucial resistance comes in at $1.3020...$1.3070 (Elliot targets). If the selloff from $1.3006 to $1.2858 yesterday was a wave 'a' then the euro is currently in a wave 'b' which ideally should stall ahead of $1.2970.
Once wave 'b' is over a selloff in wave 'c' should take the euro lower. Immediate support for today comes in at $1.2858 (yesterday's low) and more crucial support from daily mid-Bollinger comes in at $1.2830. Wave equality targets for the euro range from $1.2810 to 2780. Daily Stochastics are still in overbought territory & thus a further correction cannot be ruled out. Ideally daily mid-Bollinger support will hold on a closing basis for a resumption of the euro uptrend. Thus for today, look to buy the euro on dips to $1.2830 and $1.2800."
DOLLAR/YEN: "Yesterday we had said that the rally in the dollar was corrective and only a close above candle resistance in the 107.10 yen region will open the way for a rally towards 107.70 yen. The dollar failed to close above 107.10 yen and has fallen back below daily mid-Bollinger support at 106.15 yen.
Thus a close today below 106.15 yen today will confirm that the dollar downtrend has resumed. Immediate resistance for today comes in at 106.55 yen (Fibonacci) and crucial resistance comes in at 107.10 yen (candle). Immediate support for today comes in at 105.70 yen and then at 105.25 yen. A break below this latter level will confirm a sell-off towards a wave equality target set at 104.60 yen has begun. The dollar ended yesterday in a bearish harami candle pattern and daily momentum has turned once again. Thus for today, look to sell the dollar on upticks to 106.30 yen."
STERLING/DOLLAR: "Yesterday we had put $1.8370 as a rising channel breakout target. Cable has fallen in line with expectations to $1.8375 and then bounced sharply higher. It is possible that cable has ended a five-wave sell-off from the $1.8618 high yesterday at $1.8375 (wave 'a') and is now in a wave 'b'. Immediate resistance for today comes in at $1.8520 (Fibonacci & Elliot) and then from rising channel at $1.8600.
Immediate support for today comes in at $1.8445 (Elliot) & more crucial support for today comes in at $1.8350 (61.8 percent Fibonacci).
The selloff in cable found support on a closing basis at daily mid-Bollinger support at $1.8425 and thus a bounce higher towards $1.8520/8560 is very likely.
If the current rally is a wave 'b' then there is potential for one more selloff in a wave 'c' before the uptrend in cable resumes."
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