European Powder Keg?
Dailyfx | Apr 01, 2015 11:28AM ET
h2 Talking Points/h2
- EUR/USD holds above key supports zone
- USD/JPY flirts with resistance
- GBP/USD testing important Gann level
Charts Created using Marketscope – Prepared by Kristian Kerr
- 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 |
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USD/JPY |
*119.50 |
119.80 |
120.20 |
120.30 |
*120.60 |
Charts Created using Marketscope – Prepared by Kristian Kerr
- 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 |
|
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Get The App
GBP/USD |
1.4635 |
*1.4760 |
1.4765 |
1.4875 |
*1.5000 |
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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