Forex commentary

Euro turn sends mixed signals

The 100 basis point recovery of the euro against the dollar from the Thursday NY low of 1.5783 to 1.5888 on Friday morning has distorted the short term charts, sending mixed signals for traders looking for direction.
On the one hand, the low of 1.5783 has satisfied our main weekly objective, which called for a test of 1.5790, and if this level gives way, we expect the move to continue to 1.5650-1.5680 support zone. On the other hand, the inability of the euro to break through 1.5885 in early Friday trading indicates weakness, which may keep the ranges tight.
Our short term strategy is to sell euro at 1.5885 and 1.5910 with stops above 1.5955 break with the min objective to touch 1.5790 again, where we may trim some of the shorts and if the level holds, turn long.
Nothing much to report on USDCHF, USDJPY or GBPUSD which are all stuck in tight ranges and are not providing a clear direction.
On the crosses, EURGBP touched major support at 0.7920 and held and now should recover above 0.80 and head higher.
EURJPY is also recovering following the last session losses and should reach 169.20 while GBPJPY is seen meeting good resistance at 213, with more res seen at 214.15.

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