The currently only steady factor is the permanent change on a day to day basis as markets are once more in the grip of political events, whether it is the aftermath of the German elections or the upcoming showdown in the US Congress concerning the budget, says JP Morgan.
"That said we keep a close eye on key-support between 80.053 and 79.58 (int. 76.4 %/weekly trend) in the USD Index as only a break below would open the door for a deeper USD setback. The same applies for EUR/USD and Cable where it would take breaks above the 1.3600 handle or above 1.6115 (minor 76.4 %) to support an extension of the latest USD decline," JPM notes.
"As long as these USD supports are not broken decisively though, we see the start window for a broader USD up-swing as open. To get the USD out of the danger zone it would take breaks below pivotal support at 1.3452 in EUR/USD or below internal 38.2 % retracements on different scale at 1.5883 and at 1.5758 in Cable," JPM projects.
"Above the latter, an extension to the upper triangle resistance at 1.6325/37 (weekly.-monthly) can’t be excluded yet. A weekly close above 1.3600 would on the other hand favour a potential extension to 1.3923 (monthly Ichimoku-lagging), to monthly trend line resistance at 1.4041 and possibly to the 76.4 % retracement on higher scale at 1.4259," JPM adds.
"That said we keep a close eye on key-support between 80.053 and 79.58 (int. 76.4 %/weekly trend) in the USD Index as only a break below would open the door for a deeper USD setback. The same applies for EUR/USD and Cable where it would take breaks above the 1.3600 handle or above 1.6115 (minor 76.4 %) to support an extension of the latest USD decline," JPM notes.
"As long as these USD supports are not broken decisively though, we see the start window for a broader USD up-swing as open. To get the USD out of the danger zone it would take breaks below pivotal support at 1.3452 in EUR/USD or below internal 38.2 % retracements on different scale at 1.5883 and at 1.5758 in Cable," JPM projects.
"Above the latter, an extension to the upper triangle resistance at 1.6325/37 (weekly.-monthly) can’t be excluded yet. A weekly close above 1.3600 would on the other hand favour a potential extension to 1.3923 (monthly Ichimoku-lagging), to monthly trend line resistance at 1.4041 and possibly to the 76.4 % retracement on higher scale at 1.4259," JPM adds.
regards,
oscarjp
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| chart 1, EUR/USD, 2013-09-27 |
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