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Talking Points

• EUR/USD holds above key supports zone

• USD/JPY flirts with resistance

• GBP/USD testing important Gann level

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/JPY has traded steadily higher since finding support near a key Gann level in the 118.40 area last week

• However, our near-term trend bias is negative while below 120.60

• Weakness under 119.50 is needed to re-instill downside momentum into the exchange rate

• A minor turn window is eyed on Thursday

• A close over the 61.8% retracement of the March range at 120.60 would turn us positive on USD/JPY

USD/JPY Strategy: Square.

Price & Time Analysis: GBP/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

• GBP/USD has come under modest pressure after repeated failures late last month at the 38% retracement of the February-March decline

• Our near-term trend bias is lower in Cable while below 1.5000

• A close below 1.4760 is needed to confirm that a new leg lower in the pound is underway

• A very minor turn window is eyed later this week

• A close over 1.5000 would turn us positive on GBP/USD

GBP/USD Strategy: Like the short side while under 1.5000.

Focus Chart of the Day: EUR/USD

Surveying the FX landscape this morning things looks a bit tricky (or more tricky than usual). We are coming off the end of the 1st quarter and the movements/flows that entails and following it up with a very illiquid few days as most of Europe is about to go on a 4-day weekend for Good Friday and Easter. Throw into the mix a major data event like US employment figures with the continuous overhang of Greece and we have quite the potential powder keg. With respect to EUR/USD we are of the view that as long as the exchange rate sits above the 61.8% and 78.6% retracements of the March range around 1.0685-1.0585 the door remains ajar to a further correction higher – potentially north of 1.1040. Traction under 1.0585 wouldn’t put the downtrend completely into the “free and clear”, but it would be a pretty clear negative development that further sets the stage for a broader downside resumption.

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