Chart of the Day: USD/JPY
USD/JPY: The USD/JPY continues to near its highs for the year, after making a brief drop into the medium term support level at 95.80. This is now the critical line in the sand for the pair and we would need to see a downside break here in order to turn to a bearish bias. Now, the pair is clearly set on a test of 100 but prices are too close to major resistance levels to enter into new long positions. Breakout traders can get long on a break above 100. Swing traders should wait for a retracement back to support at 98.45 before buying the pair.
AUD/USD: The AUD/USD is proceeding lower in a staircase fashion after breaking critical Fib support in the 1.0280 area. This was the 61.8% Fib retracement of the rally from 1.0115, so now that most of the Fib support has been removed, we now expect a full retracement back into this area. Upside resistance can be found at 1.0360, so for those looking to sell into rallies this presents a good risk to reward level. To the downside, the next level of historical support can be found at 1.0220. A downside break here will accelerate losses back to 1.0115.
EUR/USD: The EUR/USD was beginning to show a head and shoulders in the last technical report, and prices have now broken the neckline, validating the pattern. The medium term bias is now clearly in bearish territory and we will need to see an upside break of 1.3030 in order to turn back to neutral. To the downside, the next target is seen at the spike low at 1.2950, a break here will accelerate losses as traders buying on dips will likely be forced to bail out on their positions.
GBP/USD: The GBP/USD is attempting a recovery after its massive declines to new yearly lows at 1.4830. Prices have now started to stall at the 38.2% retracement of that bear wave (at 1.54), so we will need to see a break here to accelerate gains. Bias remains moderately bearish for the short term (until 1.54 is broken).