Chart of the Day: USD/JPY
USD/JPY: The USD/JPY continues to push lower after failing at clearly defined Fib levels at 93.65. This area now marks the first major area of short term resistance, as it also coincides with downtrend lines and moving average levels on the hourly charts. Given the strength of the failure at resistance, the near term target is now clearly set at 92.50. Any rallies are expected to be met with selling pressure, so the first level to watch on the upside comes in at 93.30 (support turned resistance). Traders can look to these areas to establish shorts, with stops above the previous Fib resistance highs at 93.65. An upside break here would turn the bias to the bullish direction.
EUR/USD: The Euro is attempting to find a bottom, and the first indication that this has actually happened will be seen if we are able to break out of the long term downtrend channel that began in early February. On short term charts, we are starting to see higher lows (reversal indicator), and support is now seen at 1.2790. To the upside, resistance comes in (along with resistance from the downtrend channel) at 1.2875. Prudent move is to wait for a daily close above 1.2875 and then switch to a “buy on dips” strategy. Longer term, there is much more upside potential than downside risk, and this favors bullish strategies as long as 1.2750 holds.
AUD/USD: The AUD/USD is forming a range, with outside parameters now seen at 1.0490 to the upside, and 1.0380 to the downside. Current bias is tilted toward an upside break, given that prices are holding above their 100/200 EMAs on the 4-hour charts. A clear break of 1.0490 targets 1.0580.
USD/CHF: The USD/CHF is consolidating at the upper levels, after breaking through Fib resistance at 0.9495. This area was the 50% Fib retracement of the decline from 0.9970, so the next clear focus for a price target is found at the 61.8% retracement of the same move (which is seen at 96.05. At this stage, buying on dips is the preferred strategy but we will need to see a clear break of 96.05 in order to maintain a long term positive bias.