Contributed by: DailyFx

EUR/CHF: The market could finally have found a major base by the recently set record lows at 1.2765, with weekly and monthly studies starting to correct. The cross has finally managed a close back above some major falling trend-line resistance from May to further encourage the prospects for a shift in the trend and additional recovery over the coming weeks. Next key resistance comes in by 1.3925, while setbacks should be very well supported in the 1.3500 area.

Contributed by: DailyFx

AUD/USD: The market looks to have finally stalled out after reaching critical psychological barriers by parity. A bearish reversal week following 9 consecutive weekly positive closes gave us early warning signals for the onset of a major correction, and despite the latest surge above 0.9900, we remain encouraged with reversal prospects and continue to look to fade the rallies. Indeed the market stalled out ahead of the recently set post float record highs by parity, and from here, we look for a break back below 0.9650 to strengthen bearish outlook and accelerate declines. Any intraday rallies should be well capped below 0.9900 on a close basis.

Contributed by: DailyFx

EUR/JPY: The market has done a very good job of holding above the daily Ichimoku cloud to suggest that we could be on the verge of a material shift in the structure in favor of significant upside over the medium and longer-term. Daily studies are however in the process of unwinding from stretched levels, so the preferred strategy is to look to buy into dips rather than on upside breaks. A good level to look to establish a long position now comes in by previous resistance turned support in the form of the daily Ichimoku cloud top (currently by 111.00).

Contributed by: DailyFx

EUR/USD: The prospects for a head & shoulders top are fading following the latest break back above 1.4000, and the market is once again contemplating a fresh upside extension beyond 1.4160 and towards some major longer-term falling trend-line resistance by 1.4500 off of the record highs from 2008. For now, we will retain our bearish outlook and look for any rallies to be very well capped ahead of 1.4080, in favor of some renewed weakness. Key short-term support comes in by 1.3735 and a break below will be required to reaffirm outlook and accelerate declines.

Contributed by: DailyFx

GBP/JPY: A closer look at Ichimoku studies suggests that we are still very much in downtrend, with the market most recently breaking to fresh 2010 lows by 126.45. However, as mentioned in previous commentary, daily studies were looking quite stretched, and despite the break to fresh yearly lows, the latest sharp bounce suggests that overall, the market is very well supported in the 126.00’s on a medium-term basis. From here, we would not at all be surprised to see additional upside towards 135.00, but we prefer to remain sidelined given what is still an overwhelmingly bearish trend.

Contributed by: DailyFx

GBP/USD: Friday’s close back above 1.6000 is concerning for bears, with the market contemplating a fresh upside extension beyond 1.6100. Still, the market has been very well capped on rallies above 1.6000 in recent weeks, and will look for another topside failure in favor of a some renewed weakness and a continuation of a broader multi-week range trade. However, should the market manage a close above the 1.6100 figure for more than 2 days, it will force a shift in the outlook and expose fresh upside towards 1.6500 further up. For now we remain sidelined and await a clearer signal.

Contributed by: DailyFx

NZD/USD: A break to fresh yearly highs above 0.7650 seriously compromises our bearish outlook here, with the market now threatening a fresh upside extension back towards critical psychological barriers by 0.8000 over the coming days. However, while the market trades in he 0.7600’s and remains offered below 0.7700, we will hold onto our bearish bias and look for yet another topside failure ahead of some fresh downside. Back above 0.7700 negates, while below 0.7500 should confirm and accelerate declines.

Contributed by: DailyFx

USD/CAD: As expected, the market was very well supported on dips below parity, with the latest sharp bounce back above 1.0200 solidifying our constructive outlook and opening the door for significant gains over the coming weeks. Look for continued appreciation towards the multi-week highs by 1.0700 over the coming weeks, with only a break back below 0.9970 to ultimately negate outlook and give reason for concern. A higher low is now sought out in the 1.0100’s ahead of the next major upside extension to be confirmed on a break back above key short-term resistance at 1.0375.

Contributed by: DailyFx

USD/CHF: With daily studies finally crossing up from oversold and the market managing to close back above the 20-Day SMA for the first time since August, we are encouraged with the prospects for the formation of a major base by the recently established record lows at 0.9460. From here, look for any intraday setbacks to be well supported on dips towards 0.9700, with the market now eying a move towards next key resistance by 1.0000 over the coming sessions. Last week’s inability to extend declines to yet another record low below 0.9460, set up a strong bullish reversal week to end a sequence of 9 consecutive weekly lower highs. This further strengthens our constructive outlook and over the medium and longer-term we see significant upside risk. The market is now looking to establish back above the 50-Day SMA for the first time since mid-June.

Contributed by: DailyFx

USD/JPY: While we like the idea of the market establishing a major base by current levels over the medium and longer-term, short-term price action has still not confirmed any signs of a bottom, with the price action over the past few days more characteristic of a bearish consolidation ahead of the next drop towards the record lows. Ultimately, a close back above 82.00 will now be required to relieve downside pressures. However, we will be on the lookout for an opportunity to buy on dips below the 79.75 record lows.