Forex commentary – Euro approaching key support

The euro is approaching key support at 1.5590-1.5615 with minor support a bit higher at 1.5640. It is not clear which of the two will limit the dollar gains. The ifo came weak as expected, so that is now out of the way, while oil has already declined sharply, so we don’t expect more pressure there to help drive the euro further lower.
In fact, we plan to cover all our short euros possibly at 1.5640 and turn mildly long at 1.5590-1.5615 area.
On USDCHF, see the 1.0420 level as significant resistance, but we need a close below 1.0310 to signal that a top has been seen and call for a lower dollar.
USDJPY has also broken higher and may test 108.60, but the rate cut by New Zealand is forcing many speculative positions to trim, something that may help the yen recover on the crosses.
At last, sterling broke below the quadruple bottom of 1.9900 and is now on its way for minimum test of 1.9835 and subject to a clear break below 1.9835, the way will open for a massive decline to 1.9710 area.

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