EURUSD

EUR/USD eased lower to 1.3100 and is back in the gray area between 1.3170 resistance and 1.3080 or so support. The technicals call for further downside toward 1.2900 on a break of 1.3060 or so. Only a rally and hold above 1.3170 would offer hope for the EUR/USD bulls.

GBPUSD

GBP may hold its own against EUR and CHF, but looks to slip lower vs. the USD. 1.8800 is resistance. A break of 1.8700 to the downside could set in motion a further sell-off to the 1.8560 area. Watch out for the UK Trade Balance data announcement at 09:30 GMT today.

USDJPY

USD/JPY was knocked lower by Issing’s comments yesterday, and the break of 103.75 has wider implications that neutralize the recent rally at minimum. Further downside below 102.75, in fact, argues for a full scale test of the 101.90 lows and beyond to 100.00. The downside is preferred with 103.50 as resistance.

EURJPY

EUR/JPY was smashed lower by the Issing comments as the downside scenario plays out even sooner than expected. The ECB wants the JPY to strengthen against the EUR while it is strengthening against the USD. Yesterday showed that this is possible. The chart remains bearish, though EUR/JPY could pause for breath at the 134.00 area. 136.25 is resistance. Eventually, the chart may focus on 126.00.

USDCAD

CAD remains strong, though USD/CAD has so far survived the test of last-straw support at 1.2140. If that level can’t hold, the chart is thrown into disarray as this would neutralize the recent rally. Assuming the support holds, USD/CAD may head back higher toward 1.2220/30 resistance, a break of which may bring on a test higher to 1.2300.

USDCHF

The USD/CHF chart appears poised for further gains as CHF looks weak indeed. 1.1800 is support and a break of the 1.1885 top could spark a further rally towards 1.2000+.

AUDUSD

AUD/USD is losing steam again, and a break lower through 0.7580 encourages the lower targets of 0.7450 and then 0.7360. Only a strong move higher beyond 0.7700 resistance would help reverse this otherwise medium-term bearish chart.

NZDUSD

NZD/USD hasn’t yet followed through lower, but still looks bearish if it can’t pull higher than the 0.7000 level. First target to the downside is 0.6820 on a break below 0.6925. 

USDJPY

USD/JPY was knocked lower by Issing's comments yesterday, and the break of 103.75 has wider implications that neutralize the recent rally at minimum. Further downside below 102.75, in fact, argues for a full scale test of the 101.90 lows and beyond to 100.00. The downside is preferred with 103.50 as resistance.

EURUSD

EURUSD smashed higher on an immediate reaction to the Trade Balance news, which was dramatic indeed. 1.3170 resistance was quickly taken out, and if that level holds, the pair could power higher to 1.3300 if 1.3240 is also taken out. The longer term chart remains bearish, however, unless 1.3450 is taken out.

GBPUSD

GBPUSD launched a tremendous rally after surviving 1.8700 support and could make is all the way to 1.8900 for now, and even 1.8900 on an over-reaction to the US numbers. But downside back toward recent lows may rule the day further out.

USDJPY

USDJPY was knocked even lower by the US trade figure and could soon challenge the 101.90 low and beyond toward the psychologically key 100.00 level if the 103.00 level holds as resistance.

EURJPY

EURJPY enjoyed a brief respite from the huge sell-off, but could be headed for more pain toward 134.00 further out.  Resistance comes in at 136.25.

USDCAD

USDCAD moved impressively lower, and if the levels below 1.2100 hold, could even break below the recent 1.1975 low and head as low as 1.1900. The downside may be limited in the medium term, however, as the USD could strengthen again further out.

USDCAD Options

USDCAD volatility is trading at a higher level than EURUSD in the front end of the volatility curve, a very unusual situation. We do see value in selling USDCAD straddles in the 2 months date versus buying EURUSD likewise the 2 months date.

We emphasize however that we prefer to see a stronger confirmation and that this trade is for the experienced option trader.

USDCHF

USDCHF went over a cliff-face and could head as far as 1.1600 here in the short term. But the chart remains medium to long term bullish unless 1.1450 taken out to the downside. Resistance comes in at 1.1750 with 1.1775 the reversal area.

AUDUSD

AUDUSD has given traders whiplash today as it went all the way down to test 0.7550 support before blasting considerably higher to 0.7640 resistance. The upside could continue all the way to 0.7700.  A breach of that last level could actually neutralize the otherwise still bearish medium-term chart. Support now comes in at 0.7600.

NZDUSD

NZDUSD came back through 0.7000 resistance and could threaten as high as 0.7100 if this USD weakness continues. Support now comes in at the 0.7000 level. The chart remains bearish on a longer term scale, however.

EURUSD

EUR/USD has been all the way to 1.3290 and could pull back to the 1.3240/50  area, which now acts as support. One more surge higher toward perhaps 1.3340 may materialize in the short term, but we keep the longer term bearish outlook unless 1.3450 or higher is taken out.

GBPUSD

The GBP/USD top was around 1.8935 yesterday as all initial resistance was cleanly taken out. The pair may gain more on the momentum generated yesterday, but could top out around 1.9020/40. Support comes in around 1.8860.

USDJPY

USD/JPY move much lower to within striking distance of 102.00, taking out all near-term support levels along the way before retracing a bit overnight. The retracement could extend a bit toward 102.75, but the pair may find resistance there and go on for a challenge of the 101.90 base and on to 100.0 – a level not seen in over 9 years.

EURJPY

EUR/JPY found a bit of support yesterday as USD weakness came more into focus than JPY strength. The pair may actually see a small relief rally as EUR/JPY often rallies whenever EUR/USD rallies, so 137.00 again is not out of the question before the bearish trend reasserts itself further out and EUR/JPY heads toward the next target at 134.00 A hawkish Trichet could aid the upside argument for this pair.

USDCAD

USD/CAD sank like a lead weight yesterday, even briefly moving below the recent 1.1975 low and on to 1.1950 before finding support. The retracement could pull the pair higher toward 1.2060/80 again before USD/CAD heads lower toward a possible retest of the 1.1800 area in the coming sessions. 1.2140 is an important higher resistance area.

USDCAD Options

USDCAD volatility is trading at a higher level than EURUSD in the front end of the volatility curve, a very unusual situation. We do see value in selling USDCAD straddles in the 2 months date versus buying EURUSD likewise the 2 months date.

We emphasize however that we prefer to see a stronger confirmation and that this trade is for the experienced option trader.

USDCHF

USD/CHF saw as low as 1.1630 and could retry that area in the coming session and even push lower toward the key 1.1550 support area. Resistance comes in at 1.1700 Still, the downside may not last long as USD/CHF could right itself and rally toward 1.2000 further out.

AUDUSD

AUD/USD rallied to just short of the 0.7700 resistance. The pair may rally further toward 0.7770 where a descending trendline currently comes in. While a break of these areas would theoretically neutralize the recent sell-off, AUD/USD upside may not last for long. Support now comes in at 0.7640. 

NZDUSD

NZD/USD could pull higher toward 0.7125, but if the USD strengthens again further out, could begin a quick demise toward 0.6720.