Daily Market Technicals

FX Outlook

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

EUR/USD stalling at Fibo resistance

Todays outlook: Weekly outlook:
Daily EUR/USD Chart
Comment: EUR/USD is stalling very near term at the 61.8% retracement at 1.4570. We remain unable to rule out a test of resistance at 1.4696/1.4732, the recent high and 78.6% retracement. This has neutralised the immediate outlook. The market will find cloud support at 1.4454/1.4305 and this in turn guards the 1.4134 support line which is regarded as the break down point to the 200 week ma at 1.4021, the 1.3968 recent low and the 200 day ma at 1.3893. Last weeks price action was an outside week to the topside and this raises the risk of a break above 1.4732, which would imply a run up to the 1.4940/1.5145 major resistance, which if seen we would again expect failure. Todays trade: Attempt small longs 1.4460, 1.4440, stops below 1.4400. Reverse longs on rallies to 1.4695/1.4730 tight stops over 1.4735. Shorter term (1-3 weeks): attempting to higher from range Medium term (1-3 months): To remain below the 1.50/1.5145 region.
Support 1.4442 1.4454/1.4305 1.4134* 1.4048 1.4021* Reason Last week high Cloud Support line 16th May low th 28 Mar low Resistance 1.4569 1.4647 1.4696** 1.4732** 1.4845* Reason 61.8% Fibonacci Recent high 78.6% Fibo Sept. 09 high

Current Price: 1.4480

61.8% retracement at 1.4570.

Support line at 1.4134

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

USD/CHF approaching 4 month down trend

Todays outlook: Weekly outlook:
Daily USD/CHF Chart
Comment: USD/CHF the inside day leaves the view unchanged. It is correcting higher, following the recent divergence of the daily RSI. This is now a triple divergence and it increases the risk of a strong rebound. Rallies will find tough resistance at .8528/54 (early May low and the 31st of May high and channel) and only a close above here would negate extreme downside pressure, targeting initially .8604/30 (Fibo and 55 day ma) and then .8850 (38.2% retracement of the move lower seen this year). Dips will find interim support at .8412, ahead of .8327 then .8276, last weeks low. Todays trade: Short .8475, place a stop/reverse over .8455. Reverse shorts on dips to .8415/.8370 and place stops below .8330. Shorter term (1-3 weeks): .8351 target has been reached, reversal expected. Medium term (1-3 months): Target at .8400-.8351 has been met, look for signs of stabilisation, below here targets .8200/.8143. Current Price: 0.8489

Resistance lies at .8528

Support .8412 .8327* .8376** .8222 .8200

Reason 20 day ma th 7 June low Recent low TD support P&F target

Resistance .8530** .8554** .8604*, .8630 .8852** .8895

Reason Downtrend chan Early May low 55 dma March low th 24 May high

RSI diverging

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

GBP/USD failing at neckline resistance at 1.6144 today

Todays outlook: Weekly outlook:
Daily GBP/USD Chart
Comment: GBP/USD has failed on its initial test of neckline resistance today located at 1.6144 and ideally we would like to see direct failure here. We await a CLOSE below the 1.5957 to trigger further downside interest and preferably a break below the 1.5883 (the 55 week ma). Should 1.6144 be breached, we remain unable to rule out further rallies to tougher resistance in the 1.6230/65 region, which is expected to cap the advance. Our overall bias remains negative while capped by the downtrend at 1.6320. We need to see a CLOSE below 1.5957 to validate the break lower. Targets remain 1.5883, the 55 week moving average then 1.5510/00 (38.2% retracement of move up from 2010). Todays trade: Short average 1.6170, lower stops to 1.6265. Cover 1.5935. Shorter term (1-3 weeks): Negative below 2 month downtrend Medium term (1-3 months): Neutral to negative looking for 1.7050 to hold the topside.
Support 1.5937** 1.5912** 1.5886** 1.5891* 1.5752** Reason March low Last weeks low 55 week ma Fibo th 25 January low Resistance 1.6144*, 1.6230 1.6260/62** 1.6312 1.6320** Reason Neckline Minor Fibo High 22 June 55 dma 2 month RL

Current Price: 1.6049

Resistance line at 1.6320

Neckline at 1.6144

1.5937 May low has held on a closing basis

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

USD/JPY holds near term support line

Todays outlook: Weekly outlook:
Daily USD/JPY Chart
Comment: USD/JPY remains underpinned by its short term uptrend at 80.30. We favour recovery and the cloud resistance starts to lift on today (81.33/82.18) and we would expect the market to follow higher. We look for a run- up to 81.69/82.11, the 55 and 200 day ma, which in turn guards the 2007-2011 downtrend at 83.13. Support lies at initially at 80.30 and this guards the 79.72/57 support area (61.8% Fibonacci retracement of the March-to-April advance and May low). Todays trade: Long 80.20, add 79.80 and place stops below 79.50. Partially cover 82.10 and cover the remainder 83.00. Shorter term (1-3 weeks): Looking for market to stabilise around the 80.00 level. Medium term (1-3 month): Look for a recovery to the downtrend at 83.13. This will act as the break point to the April high at 85.53, then 87.55 en route to 94.50 (inter-year target). Current Price: 80.80

80.30

Support 80.30 80.00* 79.92** 79.79* 79.57**

Reason Support line Psych. support 1995 low 61.8% Fibo May low

Resistance 81.33 81.69* 82.21/23** 82.12* 83.30**

Reason Cloud 55 dma May high 200 dma March high

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

EUR/JPY resistance line and 55 day ma eroded

Todays outlook: Weekly outlook:
Daily EUR/JPY Chart
Comment: EUR/JPY is stalling just ahead of the 117.90 June peak. Having recently eroded its downtrend and 55 day ma at 116.72, we look for near term dips to remain shallow. We target the June high at 117.90 en route to 123.33, the April high. Intraday dips will find support at 115.75, however key support remains the 200 day ma at 114.08, the 55 week moving average at 113.25 and the 61.8% Fibonacci retracement at 112.93. While this holds we will assume the market holds upside potential. Todays trade: Longs reinstated 116.00, raise stops to 115.75. Cover 123.00 Shorter term (1-3 weeks): 200 day ma holding Medium term (1-3 months): Based at 106.50/105.45. Targets 123.33, then 130.00. Current Price: 117.28

200 day moving average is at 114.06

Support 116.80 115.85/75 115.13/114.93 114.08** 113.40** Reason Minor Fibo nd 22 June high 200 dma May low Resistance 117.90** 118.36* 119.54* 121.85** 122.62 Reason June high 50% retracement 61.8% Fibo th 28 April peak

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

EUR/GBP consolidating positive bias

Todays outlook: Weekly outlook:
Daily EUR/GBP Chart
Comment: EUR/GBP held steady yesterday consolidating its recent gains. The market has recently broken above a 2 year down channel (at .8980) and we would expect this breached trend line, now at .8973/78, to now offer near term support. We note the doji charted on Friday and would allow for some near tem consolidation. We target .9140/48 (2010 high and long term Fibo). Longer term we would allow for .9414. Todays trade: Buy .8980, .8967, stops .8858 Shorter term (1-3 weeks): Neutral to positive above .8723. Medium term (1-3 months): Targets the .9042 May high. Then 9140/48.Longer term target .9414. Current Price: .9032

Uptrend at .8978
Support .8978 .8850/70 .8835 .8820* .87235** Reason Acc uptr Minor Fibo 55 day ma Supp line Last wk low
th

Resistance .9082** .9148** .9153** .9239/42** .9299

Reason Friday high March 2010 high Nov 2009 high Oct 09 high Sept 09 peak

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

EUR/CHF market stalling ahead of key pivot 1.2400

Todays outlook: Weekly outlook:
Daily EUR/CHF Chart
Comment: EUR/CHF looks to be stalling just ahead of the 1.2400 pivot (December 2010 and the March 2011 low and the 55 day ma). This is key resistance and we would expect to see it hold the initial test This move looks directional and we suspect is part of a major turn. A close above 1.2400 is needed to confirm and see a target of 1.2865 engage (top of one year channel). Intraday dips should hold 1.2140/1.2075. Todays trade: Holding longs from 1.2180. Exit at market and reinstate shorts. Add on rallies to 1.2350 and place a stop/reverse over 1.2400. Reverse shorts on dips to 1.2140/1.2075 stops below 1.20. Shorter term (1-3 weeks): Downtrend breached, target 1.2400 Medium term (1-3 months): Market has based. Current Price 1.2286

Downtrend broken

RSI has diverged

Support 1.2140, 1.2108 1.2075 1.1946 1.1900 1.1808**

Reason 20 day ma Minor Fibo 16 June high Minor Fibo th 27 June Low

Resistance 1.2398/1.2404* 1.2400** 1.2485* 1.2500 1.2485

Reason Dec & March lows 55 day ma Early May low Psych. resistance th 9 May low
th

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

EUR/CHF weekly

Top of one year channel at 1.2894

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

Other technical analysis reports we publish are:

Monday: Tuesday: Wednesday: Thursday: Friday: FX Emerging Markets Technicals, Strategic Technical Themes; Bullion Weekly Technicals; Commodity Weekly & Commodity Currencies Weekly Technicals; technical contribution to the Emerging Markets Bi-Weekly; Fixed Income Weekly Technicals.

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

Explanation:

This technical analysis report is based primarily on Dow theory and is using bar and candlestick charts. Support and resistance levels with no asterisk denote minor levels. One asterisk denotes an area of reasonable support or resistance, two stars are for strong areas of support or resistance. Uptr = Uptrend, connecting 3 low points. SL = Support line. Support lines have only 2 points of contact and are not as important as uptrends. Dtr= Downtrend, connecting 3 high points. RL = Resistance line. Resistance lines connect only 2 high points and are not as important as downtrends. Fibo = Fibonacci retracement we use the 23.6%, 38.2%, 50%, 61.8% and 78.6% levels. Fibox = Fibonacci extension we use the 61.8%, 78.6%, 100%, 138.2%, 161.8% and 261.8% levels. Pivot point = an area on the chart which acts as both support and resistance. St = Short term level (for example St Fibonacci retracement refers to the nearest highs and lows) Lt = Long term level (for example Lt Fibonacci retracement refers to longer term highs and lows) 55 dma = 55 day (simple) moving average 200 wma = 200 week (simple) moving average

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

10

Disclaimer
This document has been created and published by the Corporates & Markets division of Commerzbank AG, Frankfurt/Main or Commerzbanks branch offices mentioned in the document. Commerzbank Corporates & Markets is the investment banking division of Commerzbank, integrating research, debt, equities, interest rates and foreign exchange. The author(s) of this report, certify that (a) the views expressed in this report accurately reflect their personal views; and (b) no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views expressed by them contained in this document. The analyst(s) named on this report are not registered / qualified as research analysts with FINRA and are not subject to NASD Rule 2711. Disclaimer This document is for information purposes only and does not take account of the specific circumstances of any recipient. The information contained herein does not constitute the provision of investment advice. It is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the financial instruments mentioned in this document and will not form the basis or a part of any contract or commitment whatsoever. The information in this document is based on data obtained from sources believed by Commerzbank to be reliable and in good faith, but no representations, guarantees or warranties are made by Commerzbank with regard to accuracy, completeness or suitability of the data. The opinions and estimates contained herein reflect the current judgement of the author(s) on the data of this document and are subject to change without notice. The opinions do not necessarily correspond to the opinions of Commerzbank. Commerzbank does not have an obligation to update, modify or amend this document or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. The past performance of financial instruments is not indicative of future results. No assurance can be given that any opinion described herein would yield favourable investment results. Any forecasts discussed in this document may not be achieved due to multiple risk factors including without limitation market volatility, sector volatility, corporate actions, the unavailability of complete and accurate information and/or the subsequent transpiration that underlying assumptions made by Commerzbank or by other sources relied upon in the document were inapposite. Neither Commerzbank nor any of its respective directors, officers or employees accepts any responsibility or liability whatsoever for any expense, loss or damages arising out of or in any way connected with the use of all or any part of this document. Commerzbank may provide hyperlinks to websites of entities mentioned in this document, however the inclusion of a link does not imply that Commerzbank endorses, recommends or approves any material on the linked page or accessible from it. Commerzbank does not accept responsibility whatsoever for any such material, nor for any consequences of its use. This document is for the use of the addressees only and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior, written consent of Commerzbank. The manner of distributing this document may be restricted by law or regulation in certain countries, including the United States. Persons into whose possession this document may come are required to inform themselves about and to observe such restrictions. By accepting this document, a recipient hereof agrees to be bound by the foregoing limitations.

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

11

Disclaimer (contd.)
Additional notes to readers in the following countries: Germany: Commerzbank AG is registered in the Commercial Register at Amtsgericht Frankfurt under the number HRB 32000. Commerzbank AG is supervised by the German regulator Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFin), Lurgiallee 12, 60439 Frankfurt am Main, Germany. United Kingdom: This document has been issued or approved for issue in the United Kingdom by Commerzbank AG London Branch. Commerzbank AG, London Branch is authorised by Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFin) and subject to limited regulation by the Financial Services Authority. Details on the extent of our regulation by the Financial Services Authority are available from us on request. This document is directed exclusively to eligible counterparties and professional clients. It is not directed to retail clients. No persons other than an eligible counterparty or a professional client should read or rely on any information in this document. Commerzbank AG, London Branch does not deal for or advise or otherwise offer any investment services to retail clients. United States: This document has been approved for distribution in the US under applicable US law by Commerz Markets LLC (Commerz Markets), a wholly owned subsidiary of Commerzbank AG and a US registered broker-dealer. Any securities transaction by US persons must be effected with Commerz Markets. Under applicable US law; information regarding clients of Commerz Markets may be distributed to other companies within the Commerzbank group. This report is intended for distribution in the United States solely to institutional investors and major U.S. institutional investors, as defined in Rule 15a-6 under the Securities Exchange Act of 1934. Commerz Markets is a member of FINRA and SIPC. European Economic Area: Where this document has been produced by a legal entity outside of the EEA, the document has been re-issued by Commerzbank AG, London Branch for distribution into the EEA. Singapore: This document is furnished in Singapore by Commerzbank AG, Singapore branch. It may only be received in Singapore by an institutional investor as defined in section 4A of the Securities and Futures Act, Chapter 289 of Singapore (SFA) pursuant to section 274 of the SFA. Hong Kong: This document is furnished in Hong Kong by Commerzbank AG, Hong Kong Branch, and may only be received in Hong Kong by professional investors within the meaning of Schedule 1 of the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made there under. Japan: Commerzbank AG, Tokyo Branch is responsible for the distribution of Research in Japan. Commerzbank AG, Tokyo Branch is regulated by the Japanese Financial Services Agency (FSA). Australia: Commerzbank AG does not hold an Australian financial services licence. This document is being distributed in Australia to wholesale customers pursuant to an Australian financial services licence exemption for Commerzbank AG under Class Order 04/1313. Commerzbank AG is regulated by Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFin) under the laws of Germany which differ from Australian laws. Commerzbank AG 2011. All rights reserved. Version 9.13
Comm erzbank Corpor ates & Markets Fr ankfurt London Commerzbank AG Commerzbank AG DLZ - Gebude 2, London Branch Hndlerhaus PO BOX 52715 Mainzer Landstrae 153 30 Gresham St reet 60327 Frankfurt London, EC2P 2XY Tel: + 49 69 136 21200 Tel: + 44 207 623 8000 New York Branch Commerzbank AG 2 World Financial Center, 31st floor New York, NY 10281 Tel: + 1 212 703 4000 Singapore Branch Commerzbank AG 8, Shenton W ay, #42-01 Singapore 068811 Hong Kong Branch Commerzbank AG 29/F, Two IFC 8 Finance S treet Central Hong K ong Tel: +852 3988 0988

Tel: + 65 63110000

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011

12

Karen Jones
Head of FICC Technical Analysis Tel. Mail +44 207 475 1425 karen.jones@commerzbank.com

Axel Rudolph
Senior Technical Analyst Tel. Mail +44 207 475 5721 axel.rudolph@commerzbank.com

Zentrale Kaiserplatz Frankfurt am Main www.commerzbank.de Postfachanschrift 60261 Frankfurt am Main Tel. +49 (0)69 / 136-20 Mail info@commerzbank.com

Karen Jones | Technical Analysis Research | Tuesday, 05 July 2011