Simple Moving Average(SMA) 200-period (bold, gray)
RSI-14 with Simple Moving Average
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
After this week's price action and after today's NFP release, the euro is standing out as the most dominant currency. The Swiss Franc is still very strong and the EUR/CHF is still just off its record low. Other than that, the euro is showing some impressive strength. Let's take a look at the EUR/USD, EUR/JPY, EUR/CHF, and EUR/GBP pairs.
Also Refer to: Parties Closing in on Next Greece Aid Package (6/3)
When the NFP release came out disappointing forecast, an initial reaction to the downside amounted to just about 15 minutes of price action, before a sharp bullish continuation followed. The market then pushed the EUR/USD above 1.46 an important resistance cluster. This suggests it is going to push the market towards a 1.4750 pivot, then the 1.4940 high if that is broken. A swing projection in the daily chart shows wave 5=1 projection to 1.50, a more likely scenario now than the bearish attempt to test channel support. Note that the RSI in the daily maintains the bullish momentum as it remained above 40. It confirms this by breaking above 60, and confirms bullish continuation with a break back above 70.
In today's Forex Notes: Assessing Yen-Strength after the Poor NFP, we saw the euro resilient against yen-strength. the JPY did indeed gain across the board in a bout of risk aversion, but it is now looking vulnerable. The Euro's strength however remains, and is now pushing the EUR/JPY towards the upside short-term targets: 118.40-118.50, then 119.50.
- The EUR/CHF is still just coming off a record low at 1.2025. The market looks to be in a second correction rally see in the 4H chart, as it resolves a bullish divergence with the RSI.
- 1.2345 will be an important pivot to break for a chance to bottom. However, the Swiss Franc is very strong and a bullish EUR at best brings the pair to ranging mode. Resistance at 1.24, then 1.27-1.2750 area levels the market might fade the pair.
- If the market continues the downtrend, a break below the current low has 150% extension at 1.1940, and 161.8% extension at 1.1840.
The EUR/GBP has retraced more than 61.8% of the May decline, and in a hurry. This suggests a revival to the upside, to test the 0.9040 high. The 0.8845 level should be able to contain any bearish attempts in this bullish outlook. The RSI in the 4H chart confirms with strong a bullish momentum breakout. The RSI in the daily chart is maintained mostly above 40, and a break above 60 now also suggests bullish continuation.
Is this reprieve for the EUR going to last or is there still further headwind from the Eurozone debt crisis? Subscribe and become a member to share your views and join live discussions as well as webinars about the markets.
Fan Yang CMT
Chief Technical Strategist
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