The Risk Today:
EurUsd The short term downtrend is remains in place but once again the pair is facing strong positive divergence on the 60 minute chart. Even a look below 1.4100 was met with solid long interest and this now remains a key level intraday, bearing in mind that many of the stops have already been flushed out so the next look below 1.4080 / 4100 may be real money flow rather than synthetic stop triggers. The next support below is 1.4034 / 51 and 1.3938 is the lowest of the 5 month uptrend lines which must hold to keep the Euro in favor. Resistance above at 1.4178 and 1.4240 thereafter. An interesting few days ahead for sure.
GbpUsd We discussed yesterday the anticipated retest of the 2 year downtrend breakout and that a break of 96 would be a problem for the bulls. The retest failed and the pair is now back under the 2 year downtrend confirming that Friday's break higher on NFP numbers was not a particularly accurate reflection of the underlying fundamentals. In the process we have now broken the medium term uptrend so unless the pair can get back above 96.20 the bulls have their work cut out to say the least. Resistance at 95.85 and 96.15. To the downside 95.16 is key for the bulls to hold and a break lower targets major support at 94.78.
UsdJpy Still the easiest chart to play and, as noted yesterday, a pullback was needed to attract any attention from the 5 week uptrend players. The pair has found support at 96.57 where the uptrend mid channel has come into play but the big money will likely be patient waiting for a retest of the 2 year down trend breakout at 96.19 or 96.06. Either way, a break below 96 would spell disaster for the Yen bears and the whole risk aversion trade could be considered over. In the meantime however, the medium term USD JPY bulls are in charge with 97.541 as the major obstacle.
UsdChf Rangebound action from USD CHF between 1.0797 and 1.0844. Nothing much else to note on the pair with regards to momentum so keep an eye on a break of either side of those levels and expect intraday trading around those marks to continue until the markets find a volatility catalyst. A move below 1.0797 points towards 1.0739 and to the upside the first resistance after 1.0844 is 1.0891 with 1.0934 as a major hurdle.
