EUR USD
EUR/USD dropped to as low as 1.2485 last week and the breach of 1.2500 support indicates resumption of fall from 1.3993. Initial bias remains on the downside this week and deeper fall should be seen to 61.8% projection of 1.3700 to 1.2500 from 1.2886 at 1.2144. On the upside, above 1.2613 will turn bias neutral and bring consolidations. But outlook will stay bearish as long as 1.2886 resistance holds.
In the long term picture, EUR/USD turned into a long term consolidation pattern since reaching 1.6039 in 2008. Such consolidation is still in progress. And break of 1.2042 will likely pave the way to 61.8% retracement of 0.8223 to 1.6039 at 1.1209. Before that, EUR/USD would continue to engage in sideway trading between 1.1875 and 1.5143 in medium term.
GBP USD
GBP/USD’s recovery from 1.5876 should be completed at 1.6184 already. Initial bias is mildly on the downside this week for 1.5876 first. Break will extend the decline from 1.7190 and to 61.8% retracement of 1.4813 to 1.7190 at 1.5721 next. In any case, near term outlook stays bearish as long as 1.6226 resistance holds and downside breakout is expected. However, break of 1.6226 will bring stronger rebound back towards 1.6523 resistance instead.
In the longer term picture, we’re sticking on to the view that price actions from 1.3503 are forming the fourth wave of the five wave sequence from 2.1161. That means, firstly, 1.3503 shouldn’t be the end point of the downtrend yet and a new low is expected. However, secondly, as the next fall could be the fifth wave, the breach of 1.3503 could be shallow and brief from long term point of view and we’ll then see a more sustainable rebound.
USD JPY
USD/JPY surged to as high as 112.47 last week and the strong break of 110.08 resistance confirmed up trend resumption. Initial bias remains on the upside this week for 100% projection of 101.08 to 110.08 from 105.19 at 114.19. Break will target 161.8% projection at 119.75 next. On the downside, below 111.45 minor support will bring brief consolidations before staging another rise.
In the long term picture, the strong impulsive look of the rally from 75.56 suggests that USD/JPY is now in a long term up trend. Based on current momentum, such rally should at least take out 61.8% retracement of 147.68 to 75.56 at 120.13 and have a test on 124.13 resistance.
USD CHF
USD/CHF’s rebound suggests that pull back from 0.9688 has completed at 0.9359 already. Initial bias remains on the upside this week for 0.9688 first. Break will extend that larger rise from 0.8698 towards 0.9838/9971 key resistance zone. On the downside, below 0.9543 minor support will probably extend the correction from 0.9688 with another fall. . But in that case, we’d continue to expect strong support inside 0.9300/9395 support zone to complete the correction and bring rebound.
In the longer term picture, we’d maintain that price actions from 0.9971 are corrective in nature. That is, the up trend from 0.7065 should resume after finishing the correction. And, note that break of 0.9971 will also have 55 months EMA firmly taken out and would be a strong indication of completion of the down trend from 1.8305 (2000 high). In that case, USD/CHF should at least have a take of 1.1288 cluster resistance (38.2 % retracement of 1.8305 to 0.7065 at 1.1358).