Wednesday May 18, 2005 - 08:57:16 GMT
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FX Daily Technical Strategy
EURUSD: It is still holding levels around 1.2620; over the last 24h it has ranged 1.2580 to 1.2660. Favorite scenario remains for the Euro to drop further and we have more economic data out of the UK and out of the US today that may ignite a move. Presently neutral with resistance 1.2635 minor, 1.2660 strong, 1.2720 1st retracement level and 1.2770 medium-term resistance, bellow strong support 1.2580/85 with two daily lows in a row, a break leads to 1.2560 initially, next support 1.2525 and target level of 1.2450.
GBPUSD: Despite a high of 1.8410 in Europe yesterday morning, more sellers have appeared overnight and we have reached a new low of 1.8295. While the pace of the decline has slowed-down somewhat, it continues to look bearish, minor trend-line at 1.8365, key resistance 1.8410, initial support 1.8325, then 1.8290 and space to drop to 1.8180 if speed picks up. Target remains for 1.8050 by the end of the week, on the topside a break of the 1.8410 key carries the risk to bounce back to as high as 1.8610.
USDJPY: The dollar performed nicely, peaking at 107.80 once more this morning. Bullish trend remains in place, support-line at 107.20 today and strong support area of 106.60/80. Above, Japanese exporters are offering at 107.80, but a surge of the dollar against European currencies should spillover to give it a lift to the 108.10/30 target area. Resistance there is expected to be strong and once reached we may turn back lower once again.
USDCHF: Range trading has been the way to go in the last 24h, 1.2200 / 1.2270 continues to look strong. On my charts, USDCHF is forming a flag pattern, having made a ‘pole’ with the straight move up from 1.1960 to 1.2280 last week and consolidated within a triangle over the past 48h. Expectations are for a break to the upside, with a strong move some 200 to 300 pips. Initial bullish target remains 1.2350 today but expectations go for 1.25 or even 1.2650, risk on the downside is breaking 1.2160 and starting a correction to 1.2050.
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