Daily FX Commentary

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Daily FX Commentary: (Morning Report)

EUR/USD The single currency remains in a near-term corrective mode, easing further from last Friday’s fresh high at 1.2813. Initial support at 1.2750 comes under pressure, with further extension lower on weak hourly studies, to target strong support at 1.2700, where Fib 38.2% of 1.2500/1.2813 and trendline connecting 1.2500 and 1.2558, lies. Violation of this support would signal stronger reversal. On the upside, very strong resistance zone at 1.2820/40 zone is seen as a major obstacle and break here to accelerate gains towards 1.2900/1.3000. Res: 1.2800, 1.2813, 1.2823, 1.2832 Sup: 1.2751, 1.2739, 1.2700, 1.2656 GBP/USD Near-term price action moves in corrective/consolidative mode, as reversal from fresh high at 1.6033 has been contained by hourly 55 day EMA at 1.5958. Regain of 1.6000 handle and improving hourly conditions, see potential for fresh attack at 1.60333, to resume the uptrend and focus 1.6060 and 1.6100. Alternative scenario sees risk of losing initial support at 1.5950 to open more important support and breakpoint at 1.5900 zone that would signal stronger reversal. Res: 1.6017, 1.6033, 1.6050, 1.6060 Sup: 1.5981, 1.5951, 1.5930, 1.5911 USD/JPY Trades in near-term sideways mode, moving within very narrow range, following recent test of very important 78.00 base. As the upside remains capped by descending hourly 20 day EMA and initial resistance at 78.30, with negative tone dominating on lower timeframes, not much of bounce to be expected, unless key barriers at 78.80/79.00 are regained. Penetration of 78.00 to signal fresh weakness, with break below 77.65, required to confirm the continuation of larger downtrend from 84.17. Res: 78.32, 78.50, 78.60, 78.80 Sup: 78.17, 78.00, 77.65, 77.50 USD/CHF The downside came under pressure again, as brief corrective action and basing attempt of 0.9430 low, was short-lived. Break below 0.9430 opens very strong support zone at 0.9420/00, reinforced by 200 day MA, below which to signal resumption of short-term downtrend from 0.9970 and focus 0.9366/33 next. Any bounce above 0.9500 would provide temporary relief. Res: 0.9469, 0.9482, 0.9500, 0.9520 Sup: 0.9430, 0.9420, 0.9400, 0.9366