Selection of comments from analysts on important technical developments in the foreign exchange market.
EURO/DOLLAR: "Tiny signs of instability below the all-time high at $1.3834, but giving up very little room to the downside. The euro is still overbought and bullish momentum has eased. Immediate upside pressure is maintained while above $1.3700."
DOLLAR/YEN: "Nothing to add as we hold in a small band above the top of the Ichimoku 'cloud' (121.89 today). The moving averages have turned negative and the longer we hold below these the sooner we are likely to drop below 120.00 (last week's low). Expect more consolidation below 122.50 this morning, probably with yet more cautious downside probes at 121.50."
STERLING/DOLLAR: "Still overbought as we consolidate under $2.0550, yet giving up very little room to the downside. Expect more of the same today and we shall continue to allow for a dip below Wednesday's low at $2.0460 for a drop to $2.0400. After the spectacular rally of the last four weeks we are currently a lot more cautious short and medium term."
EURO/YEN: "Some other yen crosses have posted new recent highs yesterday and/or today. This one is consolidating neatly in a "triangle" under the all-time high at 168.95 and above the 9-day moving average at 167.73. If we can hold above 167.50 again today another upside probe is likely. The Euro is no longer overbought against the Yen and we maintain our target at 170.00 for some time this month."
EURO/DOLLAR: "The euro remains in an up trend. The market once again held above its 9 day moving average supporting the view that corrections remain shallow and the bias is still to form a new high above the previous $1.3833 high.
The daily DMI trend index continues to indicate the market is fully entrenched within its up trend also. We continue to look for further gains to initially test $1.3919 en route ultimately to challenging $1.4103 before any significant correction or reversal is forecast."
DOLLAR/YEN: "USD/JPY's corrective phase continues. The market remains dominated by its 1 month down channel parameters which are currently located at 120.70/123.28 today. With the market consolidating in a very narrow range yesterday, our neutral to negative bias persists for at least another 2 to 3 weeks.
Whilst we still cannot discount a rally towards 123.28 before lower it is looking less and less likely to be seen. The bias remains to test 120.70 as the falling 123.28 channel resistance favours to continue to hold."
EURO/STERLING: "Starting to show signs of bottoming out within its broad 67.10-68.48 pence coiling/contracting range. Upside progression is still indicated to be slow and choppy however as the DMI Trend Index remains below its downtrend which continues to indicate that the market is trendless/neutral.
Very near term the market is attempting to erode the upper end of its minor 67/10/43 range with a daily close above 67.43 required to conclusively confirm a range base is in place."
STERLING/DOLLAR: "Dipped lower yesterday but again held within its accelerated up trend. This continues to support the view that the market has separated away from the break of the $2.0135 and the market is unlikely to trade back down below there for at least 3 months.
The current parameters of the up trend are now located at $2.0482/2.0700 and with the daily DMI trend index confirming the market is still trending to the upside we continue to view dips will remain shallow and short lived as the bias is to again form another new high above the previous $2.0548 inter-week peak to test the next key resistance area of $2.0685/2.0700 before any correction is favoured to occur.