This text is from blog famous currency strategist Joel Kruger .
MAYBE A SESSION OR TWO OF USD WEAKNESS – Although the markets have been moving rather quietly this week, there have been some notable short-term developments which are worth attention. EUR/USD has put in a bullish doji-like close on Tuesday which could warn of a bit of a rebound over the coming sessions. While I wouldn’t expect these gains to extend too far, I also wouldn’t rule out the possibility for a bounce back towards the 1.2800 area. At this point, a break back and daily close back below 1.2660 would now be required to confirm a bearish continuation and extend declines. Elsewhere, AUD/USD remains well bid despite my bearish outlook, and any broader currency strength on Wednesday could take this pair back over 1.0500. Ultimately however, gains here should be well capped below 1.0600 in favor of an eventual bearish acceleration back under 1.0000 and towards 0.9000 over the coming weeks and months.
Daily forex technical analysis made by Joel :
SNB COULD BE ON THE WIRES REAL SOON– Moving on, EUR/CHF has popped back on radar screens, with the cross rate dropping back under 1.2050 and threatening a test of the highly publicized SNB 1.2000 defense barrier. There are unquestionably massive stops built up below 1.2000, and a break of the figure would likely open the door for a violent bout of stop tripping before any possibility for a bullish reversal. I currently have no position in EUR/CHF but would be very intrigued by an opportunity to pick some up on a jackknife dip below 1.2000. Despite a reduction in Euro exposure in recent months, the SNB still remains committed to the barrier defense, and until proven otherwise, buying around the barrier should still prove to be an effective strategy. Technically, the medium and longer-term outlook also favors EUR/CHF upside.
MAJOR INVERSE H&S FORMATION? – Finally, EUR/AUD is looking more and more interesting each day, with the market expected to reverse higher at any moment (over the coming sessions). Technically, daily studies are now tracking in oversold territory, while the weekly chart is showing the potential for the formation of a major inverse head & shoulders pattern. The market had previously been very well supported at current levels back in February 2012 (left shoulder), and could therefore once again find support over 1.2000, resulting in the formation of the right shoulder. The inverse H&S formation jives with my longer-term outlook which projects gains over the coming months to 1.4000. At the end of the day, only back under the critical lows at 1.1600 would negate the outlook.