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Karen Jones | Technical Analysis Research | Monday, 01 August 2011

FX OutlookDaily Market Technicals

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1Karen Jones | Technical Analysis Research | Monday, 01 August 2011

Current Price: 1.4398Daily EUR/USD Chart

Todays outlook: Weekly outlook:

Comment: EUR/USD struggled last week to make much headway,stalling at 1.4537. However neither has the market broken down. The

market continues to hold over the 38.2% retracement support at 1.4270.

We require a close below here to alleviate upside pressure andconcentrate efforts on supports this would target 1.4185, then1.4020/00 en route to the 200 day ma at 1.3928.

While no close below 1.4270 is seen, we remain unable to rule out stabshigher. Intraday rallies are expected to find nearby resistance at 1.4440

and will remain slightly offered below here. Above here will re-focusattention on to the 1.4537 recent high then the 1.4580 early July high en

route to 1.4694/1.4704, where we look for the rally to fail.

Todays trade: Longs stopped. Reattempt small longs at market, add14270 and place stops below 1.4185. Cover 1.4690.

Shorter term (1-3 weeks): Downtrend eroded, target 1.4694/1.4704.

Medium term (1-3 months): To remain below the 1.5000/1.5145 region.Targets 1.3748/13 (2010-2011 uptrend and 55 week ma), then 1.20.

Support

1.43181.4270*1.4187*1.40151.3968*

Reason

55 day maFiboMinor FiboLow 18 JulyMa trou h

Resistance

1.4520/371.4580**1.46471.4696**1.4704**

Reason

Early July high

Recent high78.6% Fibo

EUR/USD consolidating at Fibo support

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USD/CHF new lows

Daily USD/CHF Chart

Todays outlook: Weekly outlook:Current Price: 0.7908

Comment: USD/CHF has broken below a 5 month support line andstarts this week under pressure. We have a point & figure target at .7700

However major support is not encountered until 0.7450, the 33 yearsupport line (connects lows from 1978). We also have additional pointand figure targets at .7540/10.

Extreme caution is warranted, the RSI continues to diverge on theweekly and daily charts, the Elliott wave counts indicate the end of move.

However the market has yet to break a single resistance level the firstof which is the accelerated downtrend at .8082 and while capped here

the market will remain offered.

Todays trade: Longs stopped. Sell rallies to .800, .8040, stops over.8085. Cover .7705.

Shorter term (1-3 weeks): offered below accelerated downtrend.

Medium term (1-3 months): Scope for 0.7700

Support

.7851

.7700*

.7692

.7540/10

.7500

Reason

New lowP & F targetsupportChannel PP & F targets ch su ort.

Resistance

.8082*

.8276/79**

.8327*

.8364

.8333**

Reason

Resistance lineJune lowEarly June low6

thJuly low

Downtrend

Downtrend at

.8332

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GBP/USD rebounding from support at 1.6260

Daily GBP/USD Chart

Todays outlook: Weekly outlook:Current Price: 1.6452

Comment: GBP/USDs recovery off the 1.6260 support keepsimmediate focus on the topside (this is the end of June high and lows for

end of July). While above here we maintain scope for gains to 1.6540/47,

the 78.6% retracement of the move down from the April peak and theMay peak.

This is considered to be the last defense for the 1..6740/48 April peakand 200 week ma..

Below 1.6260 we would allow for a slide back to the 55 day ma at 1.6204 only below here does the chart picture turn more negative and re-focus

attention on 1.6068 (200 day ma).

Todays trade: Long 1.6265, stops below 1.6260. Partially cover 1.6525,looking to reverse longs on rallies to 1.6740/50 tight stops

Shorter term (1-3 weeks): Break of near term resistance targets1.6740/48.

Medium term (1-3 months): Neutral to slightly positive allow for retest

of the 1.7050 pivot which is expected to provoke failure.

Support

1.6260/651.6208*1.6165/301.6072*1.6000*

Reason

End July high55 dmaMinor Fibo200 dmaPs ch su ort

Resistance

1.64721.6540/47**1.6740/45**1.6748**1.6877*

Reason

7 June highJune highApril peak200 week maSe t. 2009 hi h

Support at 1.6265/60

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USD/JPY approaching the 76.25 low, daily RSI is oversold

Daily USD/JPY Chart


Comment: USD/JPY has sold of towards and is reversing just ahead ofthe 76.25 February low. Ideally we would expect to see this hold the

initial test, the Elliott wave count tells us this is the end of the move, the

daily RSI is oversold and we should see 76.25 hold.

Minor resistance is found at 78.45/55 and between the May and June

lows and the 61.8% Fibonacci retracement at 79.57/88 and around thepsychological 80.00 mark and the market will need to regain this in orderto alleviate immediate downside pressure.

Below 76.25 targets 75.50 then 75.00.

Todays trade: Long 77.25, stop below 76.25.Cover 79.50.

Shorter term (1-3 weeks): Is focused on support.

Medium term (1-3 month): Neutral to negative. Must clear 4 yeardowntrend at 82.55 for any recovery to be viable.

Support

77.08, 76.7076.25**75.5075.00*74.73*

Reason

March low

Psych. support2009-2011 su

Resistance

79.57/88*80.00*80.2380.7581.04

Reason

May/Jun low&FibPsych. resistance55 dmaCloud100 dma

Current Price: 77.45

RSI is oversold at 16

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EUR/JPY negative bias below the 113.64/97 resistance.

Daily EUR/JPY Chart


Comment: EUR/JPY following last weeks rejection from the 113.60region, this together with the 200 day moving average at 113.97 is acting

as an effective short term ceiling to leave the market to drift lower short

term.

Key near term support is the 110.10/109.58 area, which represents the

78.6% retracement and the recent low and we suspect that this will againhold. This is seen as the last defense for the January and March106.83/50 troughs.

We would need to see a close above 114.00 to alleviate immediate

downside risk and signal a recovery to the 115.82 3 month resistance

line.

Todays trade: Shorts reinstated 112.25, add 112.85, stops over 113.65.Cover 110.70.

Shorter term (1-3 weeks): Break down from range targets 110.10, then

108.90.

Medium term (1-3 months): Based at 106.50/105.45.

Support

111.72110.66110.10**109.58108.90**

Reason

Low 18th

July78.6% FibonacciTuesdays lowMeasure tar et

Resistance

113.35113.40/50*113.64**113.97**114.92

Reason

55 week maMay & June lowsResist line200 dma50% retracement

Current Price: 111.52

Resistance line at

113.64

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Daily EUR/GBP Chart

Todays outlook: Weekly outlook:Current Price: .8749

EUR/GBP stalled at the 38.2% Fibo retracement at .8850

Comment: EUR/GBP eased lower last week, following its failure tosustain a break above the 38.2% retracement resistance at .8850 (of the

move down from the July peak). Further consolidation is likely but we

suspect that last weeks low at .8712/06, was an interim low and we lookfor further stabilisation here. We would allow for a move back towards.8977/.9000 (mid June high).

Only below .8700 will re-engage the 200 day moving average at .8666and introduce potential to .8612 then .8542, the four year uptrend line.

Todays trade: Attempt tiny longs at market, add .8712, stops below

.8706. Cover .8977.

Shorter term (1-3 weeks): Attempting to stabilise above .8700.

Medium term (1-3 months): View has been neutralised.

Support

.8723**

.8712/06**

.8675*

.8666*

.8655*

Reason

16th

June lowFibo + rec low12

thMay low

200 dma5 month SL

Resistance

.8850

.8890/95

.8941**

.8977

.9042**

Reason

Minor fiboOct 2010 highJune highMa hi h

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Todays outlook: Weekly outlook:Current Price 1.1408

EUR/CHF in new lows

Daily EUR/CHF Chart

Comment: EUR/CHF has charted a new low. The collapse lower wasunexpected. We have a Fibonacci extension at 1.1275, a April to July

support line at 1.11, Psychological support at 1.10, then nothing until

1.0775.

The daily RSI continues to not confirm the low, however neither has it

provoked reversal and while capped by the 20 day m.a. at 1.1721 we willassume a downside bias. Initial resistance is 1.1525, the 38.2%retracement of the last leg lower.

Todays trade: Longs stopped. Attempt tiny shorts 1.1525, add 1.1665,

stops over 1.1720. Cover 1.1300.

Shorter term (1-3 weeks): under pressure below the 20 day ma

Medium term (1-3 months): Scope for 1.10.

Support

1.1300/1.1297*1.12901.1000**1.0910*

Reason

New low240 min P+FPsych. support100% Fibo ext.

Resistance

1.1525*1.1665*, 1.1668**1.17211.1808**1.1946*

Reason

Resist line20 day maJune lowMid-June low

Resistance line at

1.1688

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Other technical analysis reports we publish are:

Monday: FX Emerging Markets Technicals, Strategic Technical Themes;

Tuesday: Bullion Weekly Technicals;

Wednesday: Commodity Weekly & Commodity Currencies Weekly Technicals;

Thursday: technical contribution to the Emerging Markets Bi-Weekly;

Friday: Fixed Income Weekly Technicals.

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Explanation:

This technical analysis report is based primarily on Dow theory and is using bar and candlestick charts.

Support and resistance levels with no asterisk denote minor levels. One asterisk denotes an area of reasonable support or

resistance, two stars are for strong areas of support or resistance.Uptr = Uptrend, connecting 3 low points.

SL = Support line. Support lines have only 2 points of contact and are not as important as uptrends.

Dtr= Downtrend, connecting 3 high points.

RL = Resistance line. Resistance lines connect only 2 high points and are not as important as downtrends.

Fibo = Fibonacci retracement we use the 23.6%, 38.2%, 50%, 61.8% and 78.6% levels.Fibox = Fibonacci extension we use the 61.8%, 78.6%, 100%, 138.2%, 161.8% and 261.8% levels.

Pivot point = an area on the chart which acts as both support and resistance.

St = Short term level (for example St Fibonacci retracement refers to the nearest highs and lows)

Lt = Long term level (for example Lt Fibonacci retracement refers to longer term highs and lows)

55 dma = 55 day (simple) moving average200 wma = 200 week (simple) moving average

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Karen JonesHead of FICC Technical Analysis

Tel. +44 207 475 1425

Mail [email protected]

ZentraleKaiserplatzFrankfurt am Mainwww.commerzbank.de

Postfachanschrift60261 Frankfurt am MainTel. +49 (0)69 / 136-20Mail [email protected]

Axel RudolphSenior Technical Analyst

Tel. +44 207 475 5721

Mail [email protected]

Z01082011

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