€ EURUSD: Topping Pattern Awaits Confirmation

 Strategy: Short at 1.3073 (Avg), Targeting 1.2864
Floating Profit / Loss: -89 pips
We initially sold EURUSD at 1.3121 and added to the position at 1.3026. The pair continues to trace out a choppy Head and Shoulders topping chart formation, with a daily close below neckline support at 1.3025 confirming the setup. The appearance of a bullish Piercing Line candlestick pattern warns an upswing may be ahead however, with initial resistance marked by a falling trend line now at 1.3303. We will remain short for now, maintaining an initial downside objective at 1.2864. A stop-loss will be activated on a daily close above 1.3378.

Topping Process as Yen Crosses Near Significant Levels

Prepared by Jamie Saettele, CMT
The EURJPY is right back near the high following last week’s key reversal. As focused on yesterday during the market timing webinar, fading the trend into month end is usually not a great idea. The market is setting up for a short next week at the start of a new month though. Resistance extends from the last week’s high (which is right at the October intervention high) and the 61.8% retracement of the decline from 12331 (reinforced by long term trendline resistance this week and next week). Tuesday’s low is support at 11030.
Bottom line (next 5 days): topping
British Pound / Japanese Yen
Daily Bars
Prepared by Jamie Saettele, CMT
The GBPJPY is right back near the high following last week’s key reversal. As focused on yesterday during the market timing webinar, fading the trend into month end is usually not a great idea. The market is setting up for a short next week at the start of a new month though. Resistance extends from a Fibonacci extension in the mid 13400s to the 5/30/11 high at 13511. Tuesday’s low is support at 13200.
Bottom line (next 5 days): topping
Australian Dollar / Japanese Yen
Weekly Bars
Prepared by Jamie Saettele, CMT
The AUDJPY is pressing against long term trendline resistance and in general a zone that has acted as support and resistance for nearly 5 years (8800-9000 level). A strong reaction is likely near 9000 even if the larger trend is up. Near term pattern remains constructive above Monday’s low of 8615 and near term support is 8670. A short is more likely next week at the beginning of April.
Bottom line (next 5 days): topping
Canadian Dollar / Japanese Yen
Weekly Bars
Prepared by Jamie Saettele, CMT
The CADJPY is testing long term trendline resistance and is approaching the July 2011 high at 8505. A strong reaction is likely near this level even if the larger trend is up. Near term pattern remains constructive above Monday’s low of 8249 and near term support is 8300/30. A short is more likely next week at the beginning of April.
Bottom line (next 5 days): topping
New Zealand Dollar / Japanese Yen