Daily Market Technicals

FX Outlook

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

EUR/USD rebound is viewed as corrective

Todays outlook: Weekly outlook:
Daily EUR/USD Chart
Comment: EUR/USD is inching higher, but we view these as corrective only, we look for these to remain capped by the 6 week resistance line at 1.4608. Rallies are expected to remain short lived and our outlook remains short to medium term negative. Intraday rebounds should find resistance at 1.4385, 1.4500. An overall negative bias will remain while capped by 1.4732, the 78.6% retracement. Directly below the market we have the 200 week ma at 1.4014, the 1.3968 recent low and the 200 day ma at 1.3834. A close below this triumvirate of support would be extremely negative and target the 1.3530/90 region (55 week ma and the 2010-2011 uptrend) as a minimum. Todays trade: Short 1.4500, lower stops to 1.4500. Cover 1.4015. Shorter term (1-3 weeks): Risk shifted to downside, target 1.4010. Medium term (1-3 months): To remain below the 1.50/1.5145 region. Resistance line at 1.4617 Current Price: 1.4345

Support 1.4200/1.4190 1.4130 1.4048 1.4021* 1.4014**

Reason Minor Fibo Minor Fibo 16th May low th 28 Mar low 200 week ma

Resistance 1.4386 1.4411 1.4500* 1.4520 1.4569

Reason 50% retracement 55 dma Tuesdays high Early April high 61.8% Fibonacci

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

USD/CHF the .8547/55 resistance area has again rejected price

Todays outlook: Weekly outlook:
Daily USD/CHF Chart
Comment: USD/CHF continues to struggle at the .8547/54 resistance area (early May low and the 31st of May high). This is likely to delay our positive outlook as we must allow for a retest of the .8348/27 supports. We look for these to again hold and signal a test of the channel at .8650. Longer term, in order to confirm that this market is basing (which we suspect it is trying to do), a close above the channel is needed. We note the divergence of the daily RSI and this does depict a loss of downside momentum. Todays trade: Long .8500, add on dips to .8350 and place stops below 8325. Cover .8650. Shorter term (1-3 weeks): .8351 target has been reached, reversal expected. Medium term (1-3 months): Target at .8400-.8351 has been met, look for signs of stabilisation, below here targets .8200/.8143. Resistance lies at .8650 Current Price: 0.8440

Support .8350** .8327** .8200 .8032* .8000**

Reason 8Y channel line Recent low P&F target 5 month channel Psych. support

Resistance .8554* .8650** .8723* .8852** .8895

Reason Early May low Downtrend chan. 55 dma March low th 24 May high

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

GBP/USD rebound corrective only

Todays outlook: Weekly outlook:
Daily GBP/USD Chart
Comment: GBP/USD is holding and currently trying to rebound from the 1.6056/54 support (the May low and Fibonacci support). The 200 day ma lies here also at 1.6023. We would not be surprised to see a near term rebound ahead of further losses. However rallies will find interim resistance at 1.6260 and should remain capped by 1.6410. Initial target is the 1.5831 55 week moving average then 1.5510/00. Todays trade: Short average 1.6170, add 1.6350, stops 1.6410. Cover 1.5835 Shorter term (1-3 weeks): Market has failed at trend line, look for slide back to 1.6058/46. Medium term (1-3 months): Neutral to negative looking for 1.7050 to hold the topside. Resistance line at 1.6410 Current Price: 1.6215

Fibo support at 1.6054

Support 1.6110 1.6046** 1.6023* 1.5937** 1.5831** Reason 50% retracement 200 dma March low 55 week ma Resistance 1.6260 1.6358/70 1.6410* 1.6546** 1.6598* Reason Minor Fibo 55 dma 2 month RL May high 78.6% Fibo

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

USD/JPY sidelined
Todays outlook: Weekly outlook:
Daily USD/JPY Chart
Comment: USD/JPY no change, the market charted an inside day. It really is unable to sustain a move higher currently. Support lies at 80.05 ahead of the 79.79/57 support area (61.8% Fibonacci retracement of the March-to-April advance and May low). While above here scope for recovery to 81.86/82.35, the 55 and 200 day ma remains. This in turn guards the 2007-2011 downtrend at 83.52. Failure to hold over 79.57 will target the 78.25/78.6% retracement of the move up from the March spike low. Todays trade: Long 80.20, add 79.80 and place stops below 79.50. Shorter term (1-3 weeks): Looking for current correction lower to stabilise around the 80.00 level. Medium term (1-3 month): Look for a recovery to the downtrend at 84.02. This will act as the break point to the April high at 85.53, then 87.55 en route to 94.50 (inter-year target). Current Price: 80.20

Support 80.00* 79.92** 79.79* 79.57** 78.24*

Reason Psych. support 1995 low 61.8% Fibo May low Fibo

Resistance 81.08* 81.86* 82.21 82.35* 83.30**

Reason Wednesday high 55 dma May high 200 dma March high

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

EUR/JPY continues to hold over the 200 day ma at 113.88

Todays outlook: Weekly outlook:
Daily EUR/JPY Chart
Comment: EUR/JPY again tested and held its 200 day moving average at 113.88 for the third time. We look for the currency pair to stabilise here, as here we find the 55 week moving average at 113.05 and the 61.8% Fibonacci retracement at 112.93. Failure at 112.90 will target 110.10, the 78.6% retracement of the rally higher from the spike low. Key resistance remains the 55 day ma and downtrend at 117.63/52, only above here would negate current downside pressure. Todays trade: Long 114.00/113.75, stops below 112.90. Cover 116.40/65 and resell stops over 117.55. Shorter term (1-3 weeks): Stalling at 55 dma low for retest of 200 dma. Medium term (1-3 months): Based at 106.50/105.45. Targets 123.33, then 130.00. Current Price: 115.05

Resistance line at 117.52

200 day moving average is at 113.88

Support 113.88** 113.40** 113.05** 112.93** 111.95

Reason 200 dma May low 55 wma 61.8% Fibonacci th 28 Feb low
th

Resistance 116.00 116.62 117.25 117.62* 117.52**

Reason Mar high 2 month line th 19 May high 55 dma Resistance line

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

EUR/GBP looks set to consolidate very near term

Todays outlook: Weekly outlook:
Daily EUR/GBP Chart
Comment: EUR/GBP remains choppy and in the middle of a large converging range we DO NOT have strong bias here. It looks in need of consolidation. The market has traded through but not closed above near tern resistance at .8846, leaving the immediate outlook unclear. We remain unable to rule out a drop towards the February-to-June support line at .8677. This is where we would expect to see the market attempt to stabilise and recover, though. Overall the current negative bias remains and we are inclined to view recent highs at .8977/.9042 as an interim top for the market. Todays trade: Square stand aside Shorter term (1-3 weeks): Key day reversal shifts risk to downside. Medium term (1-3 months): Targets the .9042 May high. Current Price: .8840

Support line is at .8677

Support .8809 .87235 .8675** .8677* .8609* Reason 55 day ma Last wk low th 12 May low 4 month SL May low Resistance .8846/54* .8878 .8923* .8950* .8977** Reason High misd May 61.8% Fibonacci Mid-April high 78.6% Fibo th 8 June high

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

EUR/CHF at base of the 3 year channel

Todays outlook: Weekly outlook:
Daily EUR/CHF Chart
Comment: EUR/CHF last week sold off to the base of its the 3 year channel at 1.1950/65 (see chart). This held the initial test, however the rebound has been relatively tepid and so far has made little impact on resistance. Key near term resistance resistance remains the 55 day ma and channel at 1.2184/97 while capped here the immediate outlook remains negative. Should a break below 1.1950 be seen. we have point and figure targets at 1.1790. Using the 1.24-1.32 consolidation to predict lower targets would imply losses to 1.1600. Todays trade: Attempt new shorts on rallies to 1.2125, add 1.2180, stops 1.2305. Cover 1.2000. Shorter term (1-3 weeks): Negative bias while capped by downtrend channel. Medium term (1-3 months): Targets 1.1950, scope for 1.1795/00. 1.1965/50 key support 1.2197 Current Price 1.2098

Support 1.2000/04** 1.1950/65** 1.1882/63* 1.1795* 1.1700

Reason Psych. support Base of channel P&F targets

Resistance 1.2200 1.2218** 1.2319 1.2398/1.2404* 1.2485*

Reason 55 day ma Channel RL Current June high Dec & March lows Early May low

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

Other technical analysis reports we publish are:

Monday: Tuesday: Wednesday: Thursday: Friday: Fixed Income Weekly Technicals. FX Emerging Markets Technicals, Strategic Technical Themes; Bullion Weekly Technicals; Commodity Weekly & Commodity Currencies Weekly Technicals;

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

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 average 200 wma = 200 week (simple) moving average

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

Disclaimer
This document has been created and published by the Corporates & Markets division of Commerzbank AG, Frankfurt/Main or Commerzbanks branch offices mentioned in the document. Commerzbank Corporates & Markets is the investment banking division of Commerzbank, integrating research, debt, equities, interest rates and foreign exchange. The author(s) of this report, certify that (a) the views expressed in this report accurately reflect their personal views; and (b) no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views expressed by them contained in this document. The analyst(s) named on this report are not registered / qualified as research analysts with FINRA and are not subject to NASD Rule 2711. Disclaimer This document is for information purposes only and does not take account of the specific circumstances of any recipient. The information contained herein does not constitute the provision of investment advice. It is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the financial instruments mentioned in this document and will not form the basis or a part of any contract or commitment whatsoever. The information in this document is based on data obtained from sources believed by Commerzbank to be reliable and in good faith, but no representations, guarantees or warranties are made by Commerzbank with regard to accuracy, completeness or suitability of the data. The opinions and estimates contained herein reflect the current judgement of the author(s) on the data of this document and are subject to change without notice. The opinions do not necessarily correspond to the opinions of Commerzbank. Commerzbank does not have an obligation to update, modify or amend this document or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. The past performance of financial instruments is not indicative of future results. No assurance can be given that any opinion described herein would yield favourable investment results. Any forecasts discussed in this document may not be achieved due to multiple risk factors including without limitation market volatility, sector volatility, corporate actions, the unavailability of complete and accurate information and/or the subsequent transpiration that underlying assumptions made by Commerzbank or by other sources relied upon in the document were inapposite. Neither Commerzbank nor any of its respective directors, officers or employees accepts any responsibility or liability whatsoever for any expense, loss or damages arising out of or in any way connected with the use of all or any part of this document. Commerzbank may provide hyperlinks to websites of entities mentioned in this document, however the inclusion of a link does not imply that Commerzbank endorses, recommends or approves any material on the linked page or accessible from it. Commerzbank does not accept responsibility whatsoever for any such material, nor for any consequences of its use. This document is for the use of the addressees only and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior, written consent of Commerzbank. The manner of distributing this document may be restricted by law or regulation in certain countries, including the United States. Persons into whose possession this document may come are required to inform themselves about and to observe such restrictions. By accepting this document, a recipient hereof agrees to be bound by the foregoing limitations.

Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

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Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011

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Karen Jones
Head of FICC Technical Analysis Tel. Mail +44 207 475 1425 karen.jones@commerzbank.com

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Karen Jones | Technical Analysis Research | Tuesday, 21 June 2011