Daily Technical Outlook

EURUSD

The euro reached a fresh low against the dollar last week - 50 points below earlier established multi-month low at 1.3585 on February 5. Although it found some bids, forming a temporary support and recovered 100 points of its recent losses - the recovery was short lived and downside pressure remains high as long as mid 1.37 to 1.38 will limit the upside.

Above the 1.38 handle, signs of a potential counter-trend move would be more obvious - 1.40-1.4050 coming in focus as targets on the corrective move. Meanwhile, 1.3450/80 - 61.8% of last year's full move, is in the cards. If the $1.35 region is to become a bottom before aiming North - what i'd prefer as confirmation would be either a pin bar (or other reversal pattern) forming around the 61.8% at 1.3480 or a sustained break above 1.38 - although such break would be dangerous to play as massive selling may emerge a bit higher into the 1.3860-1.39 region. Intra-day sentiment is bearish and minor resistance comes around 1.3640, followed by 1.3700 higher. Current quote is 1.3592 @07:20 GMT

Support: 1.3530/50, 1.3480/00 and 1.3400
Resistance: 1.3640/50, 1.3700, 1.3750/60 and 1.3800.
Market sentiment: long term - bullish, medium term - bearish, short term - bearish, intra-day - bearish

AUDJPY

Friday's breakout above the 80.00 handle was canceled by the news from China's central bank which surprised the markets by saying it is raising reserve requirements by 50 basis points, the 2nd such increase this year. Therefore my strategy to buy on break of 80.00 was affected and a good trade turned bad - from 30 points profit to the stop loss in few minutes. Upside is back in focus now and a re-test of Friday's top is likely. However, in case of extended gains - I expect solid selling within the 81.00-81.20 range. Short-term sentiment is slightly bullish but the whole upward move is, so far, corrective in nature. Current quote is 79.80 @07:20 GMT

Support: 79.50, 79.00 and 78.50/60
Resistance: 80.00/10, 80.50 and 81.00/20