I'm showing the weekly charts this week as the candles/bars may be very relevant.

USDindex - No real directional bias

EUR/USD - Will last weeks top hold?

GBP/USD - Indication of at least a potential temporary top

USD/CAD - Reversal still in vogue

EUR/JPY - last weeks rejection candle is hard to ignore

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; Fibonacci retracements in grey; 50-period simple moving average in light blue.)

7/02/2009 – AUD/USD – Dollar-strengthening price action on AUD/USD, a daily chart of which is shown, has once again descended back down to a key uptrend support line extending from the March lows. This line has already been touched three times since its inception, and the current bearishness has created a fourth. While this currency pair can certainly be considered to be in an overall uptrend situation, the last several weeks have been marked by a prolonged sideways consolidation, much like the price action on other key currency pairs. Currently, as of this writing, price is right above the noted uptrend support line. Any significant breakdown of this line should target further strong support in the 0.7700 price region. In the event that price respects the current trendline with a bounce, an uptrend continuation would be confirmed only on a breakout above the 0.8263 uptrend high, which could then target further resistance in the 0.8500 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

7/01/2009 – EUR/GBP – Price action on EUR/GBP, a daily chart of which is shown, has been consolidating in a triangle formation as it has retraced back up to a key downtrend resistance line extending from the 0.9500 double-top high in mid-March. Still currently entrenched in a strong downtrend, this pair has some key directional events to watch for as price action unfolds. The top of the triangle currently coincides with the noted downtrend resistance line. A strong breakout above both of these technical factors would be a substantially bullish indication that should target further immediate resistance in the 0.8650 and then 0.8720 price regions. If price ultimately respects the current general downtrend, the key event to watch for would be a breakdown below the triangle, in which case price could easily target strong support in the 0.8200 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

6/30/2009 – USD/CAD – Price action on USD/CAD, a daily chart of which is shown, has tentatively poked out above a key downtrend resistance line extending from the fourth test of the 1.30 price region back in March. This tentative break places the current downtrend in potential jeopardy, as this trendline has helped define a strong downtrend for more than three months. With any substantial follow-through on this potential bullish breakout, the next major resistance target to the upside resides around the key 1.1800 price region. In the event of a false break scenario, where price retreats back below the trendline, strong support continues to reside in the 1.450 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

6/29/2009 – GBP/USD – Price action on GBP/USD, a daily chart of which is shown, has continued progressing sideways within the converging triangle consolidation that has been in place since the beginning of the month. This continued consolidating price action occurs within the context of a steep uptrend (extending from the late April lows) that has not been broken as of yet. Therefore, the current technical bias, in line with the strong current trend, is leaning towards a potential breakout to the upside of the triangle pattern. In the event that this triangle breakout occurs, an uptrend continuation would still not be confirmed unless a further breakout above the 1.6660 uptrend high occurs as well. In this event, the next major resistance target immediately above that high resides around the 1.6800 region. And any breakout above that level should carry substantial bullish significance for the pair, potentially confirming a large rounded bottom pattern. To the downside, below the steep uptrend support line, strong further support resides around the 1.5800 region, the last major swing low within the current uptrend.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

With June coming to an end as the second quarter just prior to the 4th of July weekend, high volatility is certainly expected. Most traders and fund managers will be taking profit or cutting losses to close out the first half of the year on all markets. Bear in mind that the stock markets have put in an incredible performance in this second quarter and profit taking may trigger a sudden correction.

As far as currencies go; the ranges are getting tighter and should give way to some sort of break. The question still remains; will there be further USD weakness prior to some overdue strengthening.

USD Index - Door is still open to a double bottom suggesting fresh tops are possible on the EUR and GBP.

EUR/USD - New top is possible

GBP/USD - A break above 1.67 opens the door to 1.70

USD/CAD - The poor performing CAD may recover some but further upside in the chart is expected medium to long term

EUR/JPY - The pair appears to have topped however the short term suggest upside in the cards for now. A break above 1.3928 sends the pair higher. However the breach of the lower trend-line could send the pair to a new low.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

6/26/2009 – EUR/JPY – EUR/JPY, a daily chart of which is shown, has been consolidating right underneath the key 135.00 support/resistance level for the last week and a half, while still respecting a parallel uptrend channel that has been in place since late April. On a longer-term basis, a strong uptrend actually extends all the way back to the long-term extreme low hit in January. Currently, price has just made a bounce up off both the bottom of the parallel uptrend channel as well as a downtrend line (extending from the early April swing high) that price broke out above in late May. So the recent bearishness in this pair may be seen as corrective, with a good potential for more upside price action going forward. This bullishness should be triggered on any significant breakout above 135.00, which would confirm a continuation of the current overall uptrend. In that event, the major upside resistance target would be a re-test of the 139.20 uptrend high. In the event of a strong breakdown below the bottom of the current parallel uptrend channel, further key support immediately to the downside resides around the 131.00 support/resistance region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

6/25/2009 – USD/CHF – Price action on USD/CHF, a 4-hour chart of which is shown, has once again reached the top of a slightly-angled parallel uptrend channel (in green) with two primary touches on the bottom and three primary touches on the top. Currently languishing near the top of the channel after recent substantial dollar strengthening, this pair is also exhibiting clear price-oscillator divergence (in white, where price made a higher high while Stochastics, in this case, made a lower high). This could suggest a possible loss of upward momentum near the top of the channel. If this becomes the case, a key intermediate support target to the downside resides around 1.0760. In the event of a breakout to the upside of the current channel, a further key resistance target resides around the 1.1160 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

6/24/2009 – AUD/USD – Price action on AUD/USD, a daily chart of which is shown, has made a third bounce up off a key uptrend support line extending from the March lows. This occurs within the context of a continuing sideways consolidation that is also plaguing several other dollar-based currency pairs. Currently, after the noted trendline bounce, price has reached a short-term downtrend resistance line extending from the failed re-test of the 0.8260 high on 6/11/2009. Any strong breakout above this short-term downtrend line should target yet another re-test of that high, which is the top of the current consolidation. Downside support within the context of the current prevailing uptrend resides around the 0.7800 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

6/23/2009 – USDCAD – After breaking out cleanly above a key support/resistance level in the 1.1450 price region, USD/CAD (a daily chart of which is shown) has ascended further to approach an important downtrend resistance line extending from the fourth test of the 1.3000 region back in early March. This is an important trendline juncture, as it represents the strong overall downtrend that has been in place for the last three months. How price reacts to this line should help dictate future direction for the pair. Any breakout above this trendline should place the current downtrend in serious reversal jeopardy, with an initial further resistance target in the 1.1800 price region. If the trendline is ultimately respected, immediate downside support continues to reside in the noted 1.1450 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

6/22/2009 – GBP/USD – Price action on GBP/USD, a daily chart of which is shown, is currently entrenched in both a well-defined uptrend as well as a mature triangle formation. The uptrend is an accelerated one that began to get steeper in May, and has since been respected by at least four price touches. The triangle has three touches to the upside and two to the downside, and is quickly approaching the triangle apex. This pattern occurs after price hit a high in the current uptrend, retesting the 1.6660 price region that was last reached in late October 2008. Any strong downside break below the bottom border of the triangle, which would correspond approximately with a breakdown below the steep uptrend line, could eventually target further support around 1.5800, the lowest point in the current triangle. Any upside turn that results in a significant breakout above the triangle should meet immediate resistance around the noted 1.6660 high, and then further up around the 1.6800 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

This week is no different. Overall I still favor USD strength in the longer term, however in the short to medium term, momentum could shift either way.

Virtually all USD pairs have been moving in a choppy manner. In such cases this can equally signal the beginning of a trend or simply a final correction prior to a terminal thrust.

The last 10 days of the month should provide either a final thrust up or an accelerated continuation.

What I have attempted to do in this week's report is; identify where the reversal/break-outs should occur.

Cheers and good trading this week.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

6/19/2009 – USD/JPY – Price action on USD/JPY, a 4-hour chart of which is shown, has reached up to bounce down off of a significant support/resistance level in the 97.15 price region. This level corresponds approximately with the key 50% Fibonacci retracement level of the recent descent from 98.56 to 95.50. Continued bearishness in this pair should easily target the uptrend support line extending from the lows in late May. Directly below this trendline is strong support in the 95.50 price region, any breakdown of which should target further support around 94.50. Immediate upside resistance continues to reside in the 97.15 support/resistance region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

6/18/2009 – EUR/JPY – Price action on EUR/JPY, a daily chart of which is shown, has just bounced up off the bottom support trendline of a parallel uptrend channel extending from late April. This represents the third support touch within this channel, with two resistance touches on the top thus far. The current bounce within this channel corresponds approximately with a bounce up off a downtrend line that was broken out in late May, the previous resistance trendline having become a new support line after breakout. Currently, price is also at a critical resistance juncture, around the 134.80 region. A breakout above this level, which would lend strength to a continuation of the current uptrend, could carry the bullish momentum eventually to target resistance around the last high in the uptrend, just above 139.00. In the event of any breakdown below the current uptrend channel, immediate further support resides in the key 131.00 support/resistance region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

6/17/2009 – USD/CAD – Price action on USD/CAD, a daily chart of which is shown, has just hit and slightly retreated from a critical resistance juncture in the 1.1450 price region on substantial bullishness. This occurs after price broke out cleanly above an accelerated downtrend resistance line extending from the late April swing high. That strong breakout hinted at a potential bullish reversal for this previously very bearish pair. In the event of a substantial breakout above the current 1.1450 price region, the key dynamic resistance target to the upside resides around the original downtrend resistance line extending from the fourth test of the 1.3000 region back in early March. Downside support within the context of the new potential uptrend currently resides in the 1.1300 price region.

James Chen, CMT
Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1