Weekly Outlook: AUDJPY, EURJPY, EURAUD, & EURGBP

AUDJPY: AudJpy performed well last week and finished just below its recent  trend highs of 102.83, where we now have a double top with the 22 April 2013 high. The weeklies look as though they are winding up for further gains down the track and if the tops at 102.85 are taken out, could take the cross on towards  the 11 April 2013 high at 105.42. That is a long way off and the shorter term bearish divergence hints at a correction, where we could see a run back towards 101.75 ) and possibly at 101.30. Below here would accelerate towards 100.80 and to the first Fib resistance of the current rally at 100.20 (23.6% of 96.76/102.83). Buying dips still seems to be the plan.

EURJPY: The cross has reversed sharply from its 149.13 trend high, seeing the biggest daily reversal in 12 months on Friday,  and has come back to sit at 145.80 just above minor Fibo support at 145.60, which ties in nicely with the Dec 2013 high (145.68) and should provide a degree of support early in the coming week. However, with the momentum indicators suggesting further downside potential  towards 144.70 (12 Nov high), 144.20 (6 Nov high) and eventually to 143.30 (38.2% of 134.13/149.13) I am not sure that we are yet done with this correction.

Rallies towards 146.50 and then 147.00 will see sellers, and for the time being would appear to be a decent opportunity to get short. Above 147.50 would suggest that I am wrong in looking for a deeper decline so keep stops on shorts in place above here.

EURAUD:  EurAud had a wild ride last week,  and after rallying sharply from 1.43 00 to a high of 1.4630,- where it ran into trouble , it fell like a stone on Friday to finish just above the weeks lows of 1.4245. It looks though this range could continue to cover the cross in the short term, and buying dips near the range low may not be a bad thing, with a SL (and possible reverse – to go short) placed below 1.4200. A break of this would head towards 1.4140 and possibly to 1.4000. The topside currently looks confined to 1.4370, but a break of which, would take us back above 1.4400 and back into the higher end of the range, and potentially for another look at 1.4600.

EURGBP: The cross traded very nicely last week in squeezing up to a high of 0.8038, before running into problems just ahead of the 200 DMA at 0.8050, (allowing us to get short above 0.8000 – without getting stopped out!) and then collapsing to finish the week at 0.7915. Having closed back at the 100 DMA (May 2012 low),  we may be in for some consolidation now, but further downside potential seems to exist for a move back towards minor support at 0.7870 and then on to the recent low at 0.7801. Below 0.7800 would target the recent trend low at 0.7766 and, beyond that, then the major target at 0.7753, and given the diverging outlook of the UK/EU economies this seems to be the obvious way to trade it. We could yet get further squeezes to the topside although I would be surprised to see us back at 0.8000 any time soon but if wrong, then look for a run back towards last week’s high, where I would again sell it with a SL once again placed above 0.8050.