Back
23 Feb 2015
EUR/USD odds remain in favour for a trend extension into 1.0072 – JPM
FXStreet (Barcelona) - Thomas Anthonj of J.P.Morgan, gives the technical outlook for EUR/USD and EUR/JPY, adding that the odds favour a bearish move for the single currency vs. the dollar.
Key Quotes
“Having basically been treading water for the last 4 weeks EUR/USD worked off most of the oversold readings without even scratching the broader downtrend.”
“That said and having not even come close to the first decisive resistance cluster at 1.1660/72/79 (minor 38.2 % on 2 scales/pivot), the main question currently is whether the internal 4th wave high could be in place at 1.1534. In order to answer this question the market would have to break below key-supports at 1.1281 (hourly neckline) and at 1.1224/01 (pivot/minor 76.4 %). Above the latter, another attempt to reach out for 1.1660/72/79 can’t be excluded, which would be indicated via a decisive hourly close above 1.1472 (minor 76.4 %, i.e. above 1.1490).”
“In the big picture though, it takes a breakout of the outer range between 1.1679 and 1.1091 (C = A) to indicate the next big move”
“Above 1.1679 we'd see the door open for a broader recovery to 1.2042/92 (pivot/int. 38.2 % on higher scale), whereas a break below 1.1091 would only leave minor support at 1.0765 and 1.0503 (pivots) in the way before the main bear market targets at 1.0072 (76.4 %) and at 0.9298 (wave 3 projection) would come into focus.”
“As for EUR/JPY we used last week's test of key-resistance at 136.67 (int. 38.2 %) to add to our core short position (new average entry now at 135.13) after having taken partial at 130.70 end of January.”
“That said and as long as 137.65 (pivot) is not taken out, we stick to our short strategy, looking for a re-test of 130.63/15 (int. 38.2 %/last low) and a potential extension to 121.94 (50 % on higher scale).”
Key Quotes
“Having basically been treading water for the last 4 weeks EUR/USD worked off most of the oversold readings without even scratching the broader downtrend.”
“That said and having not even come close to the first decisive resistance cluster at 1.1660/72/79 (minor 38.2 % on 2 scales/pivot), the main question currently is whether the internal 4th wave high could be in place at 1.1534. In order to answer this question the market would have to break below key-supports at 1.1281 (hourly neckline) and at 1.1224/01 (pivot/minor 76.4 %). Above the latter, another attempt to reach out for 1.1660/72/79 can’t be excluded, which would be indicated via a decisive hourly close above 1.1472 (minor 76.4 %, i.e. above 1.1490).”
“In the big picture though, it takes a breakout of the outer range between 1.1679 and 1.1091 (C = A) to indicate the next big move”
“Above 1.1679 we'd see the door open for a broader recovery to 1.2042/92 (pivot/int. 38.2 % on higher scale), whereas a break below 1.1091 would only leave minor support at 1.0765 and 1.0503 (pivots) in the way before the main bear market targets at 1.0072 (76.4 %) and at 0.9298 (wave 3 projection) would come into focus.”
“As for EUR/JPY we used last week's test of key-resistance at 136.67 (int. 38.2 %) to add to our core short position (new average entry now at 135.13) after having taken partial at 130.70 end of January.”
“That said and as long as 137.65 (pivot) is not taken out, we stick to our short strategy, looking for a re-test of 130.63/15 (int. 38.2 %/last low) and a potential extension to 121.94 (50 % on higher scale).”