EUR/USD
Last week's report highlighted a lack of clear signals for EUR/USD, with the upside stalled but a Marabuzo line protecting the downside. This proved to be correct as, for a 2nd week in a row, there was little net movement. Prices are virtually unchanged after 10 trading days.
Nonetheless, last week saw the market build a base around the 13 day moving average and the top of the daily Ichimoku Cloud. Sentiment cannot be strong given the limited price action but is left positive.
Therefore, our call is Cautiously Bullish above 1.3737, Apr 8th low, targeting 1.3906, this month’s top, then 1.3967, this year’s peak, and 1.4019.
The risk is below 1.3737 to 1.3694 and 1.3664, a 62% pullback of this year’s rise.
USD/JPY
April’s USD/JPY rally from the 200 day average rate is positive for sentiment. This has occurred with the Dollar Index testing the neckline to a potential bearish Head & Shoulders reversal pattern.
However, the rally has stalled from close to the 100 day average, as well as close to 102.73, a 50% recovery to this month’s losses. Last week’s sequence of lower daily highs and lows is negative, but signals are not strong and the outlook for this week is just temporarily bearish, selling on the open and at 102.45, with a stop loss at 102.95, the 100 day average.
Targets are to 101.96, last week’s low, 101.20/32, the March and April low trades and then towards 100.75, this year’s base made in February.
USD/CAD
Although our bullish call for last week's sentiment proved correct, and a 2nd up week in a row was produced, price action was muted for USD/CAD. Net gains were small but the weekly range was the narrowest of 2014 so far.
Nonetheless the upside confirmed the relevance of Jan’s Marabuzo line and was supported throughout the last 5 trading days by the 13 day average. This keeps the focus on the topside and so our call is Bullish above 1.0978. The immediate target is 1.1070, the 4 week high, with a move above that level targeting 1.1118 or even towards 1.1219, the open from 5 weeks ago.
The risk is below 1.0978, 16th Apr open, targeting 1.0919 or even towards this month’s 1.0858 base.