FOREX MARKETS AUD/USD Bearish below 1.0015; bullish above 1.0200. In the big picture, the Aussie has the potential to move the entire distance of the 2008 correction (0.9850 – 0.6004) added to the 2008 highs (0.3846 + 0.9850) ie US$1.3696. That may sound unthinkable but the charts have an ability to open the door on outrageous possibility. But before anything so grand can be achieved the currency is likely to trade a meandering path higher, evidenced in the move since it surpassed US$1. Since early November a triangle pattern has been forming, with steadily rising base, implying a continuation of the gains. A break above the highs made earlier in the month at 1.0200 would suggest a test of the end of year highs at 1.0257, with next resistance at the halfway mark of the 1982 losses at 1.0450.

Cat Davey

A move below the February 17 low of 1.0015 would be a bearish signal. First support is at the two-week lows of 0.9866, then 0.9752, the 10-week lows.

RES: 1.0200 1.0257 1.0450
SUP: 1.0015 0.9866 0.9752

EUR/USD
Bullish above 1.3747; bearish below 1.3426.

The euro recovered last week to be just a few pips away from the previous rebound high of 1.3747. Further momentum this week is possible, potentially carrying the currency back to next resistance which is at the following rebound highs of February 2 at 1.3811, followed by the lows of November 5 at 1.4021.

Overall, the euro has been in correction mode since early February. The losses will resume if there is a move below the low of February 14 at 1.3426 with a first downside target at the lows of January 17 at 1.3240 then the lows of January 13 at 1.3085.

RES: 1.3474 1.3811 1.4021
SUP: 1.3426 1.3240 1.3085

GBP/USD
Bullish above 1.6299; bearish below 1.5949.

Sterling rebounded last week, coming within pips of the November highs of 1.6299 on a bullish hammer candle on Friday. It is the third attempt at these levels, and if there is a successful push above that level this week a strong rally could follow. First target on a break of 1.6299 is the high of January 18 at 1.6458, which also happens to coincide with the Fibonacci 38% retracement of the losses since May 2007. Next resistance is then at the November 2009 highs of 1.6878 followed by the highs of August 2009 at 1.7043. A move above this level would signal a major basing pattern that could potentially signal multi-year gains.

A move below Friday’s lows of 1.5949 would be a bearish signal. First support would then be at the lows of January 25 at 1.5746, followed by a Fibonacci 62% retracement of the gains since December at 1.5702.

RES: 1.6299 1.6458 1.6878
SUP: 1.5949 1.5746 1.5702

USD/JPY
Bullish unless below 82.33.

The yen closed above the January highs on Tuesday last week but could not sustain the gains. This week will confirm if the move was a false breakout or the trigger for a resumption of the gains. Therefore the outlook depends on a break of the range 82.33 to 83.68.

First target on a break of January’s highs of 83.68 is December’s highs of 84.51, followed by round number resistance of 85.00.

A move below Thursday’s lows of 82.33 would be a bearish signal. First support is then at the prior week’s lows of 81.77, then the low for the month at 81.10.

RES: 83.68 84.51 85.00
SUP: 82.23 81.77 81.10