FX TECHNICAL REPORT CURRENCY OUTLOOK MAJOR US DOLLAR RATES - FEATURED MARKET – EUR/USD
EUR/USD is undergoing the second leg to the recovery from the July 2012 slightly higher low at 1.2047 (compared to 1.1881 in June 2010). Close to 61.8% (1.3935) of the May 2011-July 2012 1.4940-1.2047 decline has so far been retraced and clearing this barrier (which is just above the 5 year (1.6039-1.4940) downtrend – now at 1.3925) will point towards 1.4257-1.4280 (76.4% retracement / former November 2010 top) and possibly 1.4416-1.4664 (100% of 1.2047-1.3709 measured from 1.2754 / 100% higher from 1.3709-1.2754 setback) over the coming
3-6 months. However, we then see the risk of a sub 1.4940 lower top being leſt for a partial retracement of the rise from 1.2047 & 1.2754, but successfully leaving a subsequent higher low at a maximum of the 1.3106-1.3231 area could set up a further advance towards the 2011 & 2009 highs at 1.4940-1.5144 over the course of the coming year. To weaken the long- term outlook, we will need to see a reversal under the 1.3106-1.3133 area, in which case a return towards the 201 / 2012 lows at 1.1881-1.2047 could commence.
MAJOR TRENDS AND TARGETS FOR US DOLLAR MAJORS As at 16 December
EUR/USD GBP/USD USD/JPY USD/CHF USD/CAD AUD/USD
Current level 1.3775 1.6290 103.05 .8860
1.0580 .8935
Major trend Up Up Up
Down Up
Down
Major targets
1.4257 / 1.4416 1.6745 / 1.7041 109.03 / 110.65 .8234 / .7726
1.1236 / 1.1725 .8546 / .8068
Trend change level 1.3106 1.5241 93.89 .9622
1.0014 1.0349
74 FX TRADER MAGAZINE January - March 2014
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