USD/JPY - Breaking 89.90 simply means "continuation"

Euro – The price goes back to test an important trend line

The Euro’s rally halted just above 1.38, and fell back fast & strong. As we can see from the attached chart, the Euro fell towards a very important support which is the lower trend line in the triangle that we talked about in the past few days. And as we can see on the chart as well, the price has already touched this line as well. Holding above, or breaking this line is the single thing that will determine the direction of the day. Thus 1.3665 is the most important support, if the Euro continues its fall and breaks it, huge implication for the short & medium term will arise! The most important of which is that the chances to drop to a new bottom in this cycle, below the 9-month low 1.3434 will be huge. As for the short term, if 1.3665 is broken, we will see the price fall to 1.3550, and may be towards 1.3442 as well. But if the price holds above 1.3665, it will rise to challenge the resistance 1.3710. And if this level is broken, we expect a strong jump towards yesterday’s high 1.3816, and then it will try to reach 1.39.

Support:
• 1.3665: the rising trend line from 1.3434, and the lower line in the triangle formation.
• 1.3550: March 4th low.
• 1.3442: Feb 19th low.

Resistance:
• 1.3710: the falling trend line from yesterday’s high on intraday charts.
• 1.3816: yesterday’s high.
• 1.3901: Feb 4th high.



USD/JPY – Trapped!

IT seems as if the Dollar-Yen is trapped! And that it is stuck between the two limits we talked about in yesterday’s report, since we have not seen a break of either of them, as the price continued to trade marginally. Yesterday, we adjusted the lines that frame the current area, to make the upper limit at Monday’s top 90.78, which is very close to last Wednesday’s top 90.80. The lower limit is provided by the rising trend line from 89.61 on the hourly chart, which has been tested several times so far. We will adopt the support just below this line at 90.04 as short term support In case we broke the resistance 90.78 we will see the Dollar take control, and drive this pair higher, as we see it targeting the important 91.60 first, then 92.31 which is important as well. But in case we broke the rising trend line at 90.04, the price will start to fall, confirming the negative technical outlook which came after Friday’s price behaviour. This fall is expected to target 89.37 & 88.53. But before breaking any of these 2 important limits, the technical outlook will be mixed.

Support:
• 90.04: important support just below the rising trend line from 89.61 on the hourly chart.
• 89.37: Mar 2nd low
• 88.53: Feb 4th low.

Resistance:
• 90.78: Monday’s high.
• 91.60: Oct 29th high.
• 92.31: Oct 27th high.



GBP/USD – Large move before the weekend

The Pound broke the resistance specified in yesterday’s report 1.5237, and successfully reached the first suggested target 1.5297, but it did not come close enough to the second suggested target & the most important resistance of all for now 1.5419, (yesterday’s high 1.5380). And after more than 100 pips of falling from yesterday’s top, in what looks like a triple move (a corrective move according to Elliott), the price is required to survive above the support 1.5275. Holding above, or breaking this line is the single thing that will determine the direction of the day. Thus 1.3665 is the most important support, if the Pound continues its fall and breaks it, huge implication for the short & medium term will arise! The most important of which is a big probability of testing the rising channel from the 10-month low 1.4781. As for the short term, if 1.5275 is broken, we expect the Dollar to be cruel to the Pound, and to hit it violently, and to drag it towards the important support 1.5130, which if broken will open the way down to 1.5024. However, if the resistance at 1.5327 turns out to be the level which gives way, the Cable will get another chance to test the most important resistance of all 1.5419, which could be a direction changing point for hundreds of pips. But, if this extremely important  resistance is broken, the Pound will explode to 1.5556.

Support:
• 1.5275: important intraday support which formed after reaching yesterday’s top.
• 1.5130: Fibonacci 61.8% for the rise from 1.4975.
• 1.5024: Friday’s low.

Resistance:
• 1.5327: the falling trend line from yesterday’s top.
• 1.5419: Fibonacci 61.8% for the drop from 1.5813.
• 1.5556: Feb 5th low.